Last week the National Housing Federation issued its decarbonisation guide. The guide includes an absolute zero target for scope 1 emissions (those caused directly by social housing) which is welcome. It recommends that associations should concentrate first on insulation measures, to make homes suitable for the new greener technologies that will need to be installed. It highlights the risks of adopting lower-carbon energy sources without first making homes suitable for them.
Delivering these improvements is going to be extremely challenging for associations. Alongside the guide, the NHF has published a report by Savills of the costs and funding options for this expenditure. The Savills report highlighted that the sector would not be able to finance the expenditure required without measures such as grants and reduced VAT.
An important aspect of the decarbonisation process will be the procurement and contract strategy adopted by each association for its properties. This includes questions on whether associations should employ and train their own workforce, partner with a large contractor or structure their contracts so they are attractive to small and medium enterprises. The guide encourages associations to form partnerships and consortia with other social landlords for funding applications and joint procurement.
Shortages of materials and labour in the construction sector seem set to continue for the foreseeable future, with costs rising faster than inflation. This makes the payment arrangements under the larger retrofit contracts extremely important. Will associations look to share in savings as work is done more efficiently with new techniques being developed and the workforce becomes more experienced in installing them? Are associations prepared to share in the delivery risks surrounding the availability of materials and labour or will they look to pass them onto contractors?
Associations will also need to decide what procurement methods to adopt. Will they let lots of contracts valued below the public procurement tendering thresholds or will they mainly use buying club frameworks?
All these issues are explored in the NHF Contract Management guide that we wrote alongside echelon and updated last year.
In the longer term, the guide encourages associations to take more control over their supply chain in terms of developing solar panels and batteries and new generation technologies. All this will take time to deliver, but the publication is a 'call to arms' for the sector. Decarbonisation needs to be on the agenda of every association alongside building safety.
But the scale of the challenge is so significant that it will require a huge programme of work at an unprecedented scale.