Why doesn’t the government agree with greater ambition for the Future Homes Standard? – Inside track

This post is by Sue Riddlestone OBE, CEO of Bioregional.

Leading experts in sustainable housebuilding have sent a clear message to the government – the Future Homes Standard will not deliver the energy efficient homes that we need.

As the consultation on the proposed Future Homes Standard (FHS) closed last week, 250 industry and community leaders have publicly called for more ambition from the government in a joint letter to the Secretary of State Michael Gove, with others telling me that they will be saying so privately to ministers.

Our homes and buildings directly account for 17 per cent of UK carbon emissions, 23 per cent if you count indirect emissions.  This, together with the fact that the cost of living crisis has pushed energy bills to the forefront of the public’s minds, should surely make policies that reduce the carbon impact of new homes a no brainer.

This is what the Future Homes Standard was meant to deliver. To support the Department for Levelling Up, Housing and Communities to develop the standard, the housebuilding industry, led by the CEO of volume housebuilder Barratt as chair, established the Future Homes Hub. The hub worked collaboratively to propose a way forward, outlining five contender specifications (CSP) for the standard in the 2023 Ready for Zero report.  It was, therefore, with some disappointment that we saw the government propose the two weakest CSPs in its consultation, not the middle contender specification 3 (CSP3) we were all expecting, or the CSP4 that we hoped for. Confusingly, CSP1 is equivalent to the government’s option 2, and the higher, CSP2 is similar to option 1.  In both cases, the government’s proposals aren’t much different to the current building regulations in terms of energy efficiency. Not exactly a Future Homes Standard.

On the plus side, for both options, the government proposes the end of the use of gas boilers in new homes and commits England to electric heating, and technology such as heat pumps. It will start to require change of use building conversions, which provide a significant number of new homes these days, to meet the same standard. And it will bring in a replacement for the outdated Standard Assessment Procedure (SAP) method of estimating building energy performance, replacing it with the Home Energy Model.  The government says it prefers the higher of the two standards it has proposed: Option 1 which includes on-building photovoltaics, helping residents to cut the cost of energy bills.

The government wants ambitious local authorities to lower their standardsBut it isn’t good enough and, compounding this, on the same day that the consultation was released, a written ministerial statement told us that the government would ideally like local authorities to stop setting local energy efficiency standards higher than national building regulations and, if they do, they must use SAP methodology rather than absolute energy metrics, which more accurately measure a building’s true energy use.

At Bioregional, we have been working with local authorities who are taking a responsible approach to staying within their local carbon budget and have been helping them create evidence bases for where to build new homes and to what building standard, using absolute energy metrics. This evidence is being accepted by the Planning Inspectorate. And, I can tell you, it’s a higher standard than the proposed Future Homes Standard.

We had to do something to counter the two announcements of 13 December 2023 (the Future Homes Standard consultation and the written ministerial statement on local authority planning for energy standards). Bioregional started a campaign with the Good Homes Alliance to convene stakeholders, alongside LETI and the UK Green Building Council (UKGBC), to draw out one strong industry and community voice and a set of proposals, now contained in our letter.

Why the government’s arguments don’t stack upOur initial question was to ask why the government had gone for the least ambitious standards that the industry proposed. The government set out two justifications, and the influence of the prime minister’s climate culture wars stance is clear. But we found that their arguments didn’t stack up.

First, the consultation argues that the cost and complexity of building to higher standards will limit housing supply. In our letter we explain why that isn’t the case. We found no evidence that higher standards would constrain housing supply, in either the government commissioned Letwin Review, or in research compiled by the House of Commons library. The Future Homes Hub found that the additional cost of CSP4 for a one-off 200 home site, compared to Option 1, was £13.8k per plot and will be considerably less when delivered at scale. This cost would be absorbed through adjustments to land values, as with previous regulation changes, and would not limit housing supply.

Second, the government proposes it is cheaper to decarbonise the grid than to further improve the way we build our homes. In our letter we point out that “a lower building fabric standard would increase the pressure new homes place on the electricity grid at a time when the electrification of heat, transport, and industry means demand for electricity is expected to grow fourfold by 2050”. We found that improvements to building fabric and ventilation in line with CSP4 would save around £22.6bn in electricity generation investment over 20 years, compared to Option 1 and would result in a £190 a year reduction in bills for occupants.

In our letter we have made some light touch suggestions for Option 1, and propose that the government starts work now on a collaborative process with developers, local authorities and expert stakeholders, during the course of 2024, to create a voluntary higher standard and a common definition of higher levels of performance, which could be used from 2025 onwards, with all the learning that that would bring, allowing local authorities and developers to go further, where it is viable, and informing the next iteration of building regulations. I hope this government or the next will see what a good idea this is.