Written evidence submitted by Oxfordshire County Council and Cherwell District Council [PNZ 043]

Summary and reason for submitting evidence

Oxfordshire County Council and Cherwell District Council welcome the opportunity to respond to the Housing, Communities and Local Government Committee’s inquiry on ‘local government and the path to net zero’.

We believe local authorities will play an important role in the UK meeting the Climate Change Act 2008 target to be net zero by 2050, specifically within the area of new and existing buildings. This is due to:  Opportunity to set higher standards than building regulations, especially where viability is not an obstacle.  The ability to avoid the additional cost of retrofit and achieve higher energy efficiency by building to net zero from the outset. This is significant in Oxfordshire due a commitment to deliver 100,000 new houses by 2031.  Solutions to achieve net zero have become more localised and energy systems more decentralised. Oxfordshire have committed to be a leader in reducing countywide emissions and are already implementing ambitious and innovative schemes that reduce energy demand and increase energy efficiency for domestic, industrial, commercial buildings and transport.

However, further clarity is required from Government on division of power and financing structures, to enable both councils and the supply chain to build capacity for delivering their functions. A long-term funding strategy to support councils is required to give certainty to the market.

Introduction

1. We welcome the opportunity to provide evidence to the Housing, Communities and Local Government Committee inquiry on ‘local government and the path to net zero’. This response is on behalf of Oxfordshire County Council (OCC) and Cherwell District Council (CDC), who perform different statutory functions but operate with a Climate Action team working jointly across both councils in delivering their respective climate action programmes.

2. Oxfordshire is a diverse and dynamic county with nearly 700,000 residents. Along with the historic city of Oxford and large town of Banbury, the county has a thriving network of villages and market towns. They are home to around 40% of the population, making Oxfordshire the most rural county in the south- east1. Cherwell District’s population will approach over 180,000 by 2027, increasing 23% from 20172.

1 https://www.oxfordshire.gov.uk/sites/default/files/file/about-council/CorporatePlan2020.pdf 2 https://insight.oxfordshire.gov.uk/cms/sites/oxfordshireinsight/files/documents/Cherwell_JSNA_2020.p df 3. Both OCC and CDC adopted their Climate Action Frameworks in late 2020. These documents outline how each council will meet their respective climate targets.

4. Key strategic documents informing climate action at OCC and CDC: a. Oxfordshire County Council’s Climate Action Framework (2020) b. Cherwell District Council’s Climate Action Framework (2020) c. Oxfordshire Energy Strategy (2018) d. Oxfordshire’s Low Carbon Economy report (2014) - soon to be updated by the Pathway to A Zero Carbon Oxfordshire (PAZCO) report, to be published in June 2021.

New homes: the Future Homes Standard and Future Buildings Standards

Question: Do the government’s proposals for improving the energy efficiency of new homes by 2025 go far enough?

5. The energy efficiency improvements outlined in the Future Holmes Standard (FHS) and Future Building Standard (FBS) documents could go further and come into effect sooner. Constructing energy efficient buildings now reduces the need and additional cost to retrofit in future, and is required to meet our climate change targets. As highlighted in the MEES Impact Assessment (2018) the cost of retrofit is significantly higher, and there’s lack of incentives for landlords to take further actions to improve energy efficiency once the minimum EPC standards have been obtained.

6. The Oxfordshire Energy Strategy Objective 2 outlines the joint ambition for Oxfordshire to lead nationally to reduce countywide emissions by 50% compared with 2008 levels by 2030 and set a pathway to achieve zero carbon growth by 2050. This low carbon transition is to be delivered by ambitious and innovative clean generation projects across the county, both in urban and rural areas, and in growth locations, and projects that reduce energy demand and increase energy efficiency for domestic, industrial, commercial buildings and transport. In order to meet our targets, the strategy outlines how the county will be increasing local clean energy generation so that by 2030, at least 56% of our electricity demand – an additional 2,050 GWh – and 40% of our heat requirement needs, are to be met by renewables. Meeting this scale of demand will mean using multiple sources and technologies delivered at a strategic, community and household scale. Additionally, unlocking the electricity supply network - already at or close to capacity and limiting connections for local low carbon generation will need to be a priority.

7. We support the London Energy Transformation Initiative’s view that the Future Homes Standard should be based on operational performance (the actual energy a building consumes in operation measured at the meter including regulated and unregulated energy, rather than a percentage reduction over a notional building model)3.

3 https://www.leti.london/part-l 8. The carbon factors that are used in Building Regulations are of date and does not reflect the developments to reduce in emissions associated with generating electricity. This has led to an inaccurate weighting towards gas boilers when assessing heating and hot water systems. It is important (and should be straight forward) that the carbon factors in modelling calculations are updated to be as close to the average carbon factor of the grid, such that the modelling methodology incentivises the systems that are most likely to reduce carbon emissions4.

9. In preparation of the Salt Cross AAP, West Oxfordshire District Council commissioned a consultant report to clarify and assess the implications associated with meeting net zero carbon for new buildings at the garden village development. The report concludes that the net zero carbon scenario be pursued as this is the only scenario that achieves the level of energy efficiency and low- and zero-carbon energy generation required to meet Government climate change targets. In achieving net zero for the site the report also highlights it is far more cost effective and simpler to achieve high performance and carbon standards in new build development than via retrofit and, particularly in the case of fabric energy efficiency it is likely to be prohibitively expensive from both a financial and embodied carbon perspective to attempt to upgrade from a ‘business as usual’ standard to an ultra-low energy standard.

Question: The government has acknowledged the need to clarify the role of local planning authorities in setting energy efficiency requirements for new homes that go beyond the minimum standards. What role should LPAs play in determining local energy efficiency standards?

10.Confirmation that local authorities can continue to adopt higher standards in local plan policy than those set out in the FHS is welcomed. This will be vital to enable councils to work towards their own net-zero carbon targets. Both councils remain concerned that this ability may be taken away in future wider reforms of the planning system.

11.In situations like Oxfordshire where viability can be demonstrated, higher energy performance standards than Buildings Regulations should be applied. High land values and high average house prices in Oxfordshire offer the opportunity for higher energy efficiency standards to be specified locally. The fact that over 50%5 of all local authorities already exceed national standards demonstrates local authority ambition, which should be supported by national government.

12.We strongly objected to the proposed restriction on LPAs, unless the standard set for new homes is zero carbon, as defined with metric for regulating 90%

4 https://www.westoxon.gov.uk/media/hdnjcnnf/trajectory-for-net-zero-buildings-for-the-oxfordshire- garden-village.pdf 5 Solar Trade Association (2019) Half of councils beating out national policy on building standards as Future Homes Standard slammed uplift against buildings regs, plus merton rule (a further 20%). Clarity is sought on whether the proposed restrictions on LPAs setting higher energy efficiency standards would prevent them from setting other policies to ensure developments achieve zero carbon, such as onsite renewables.

Question: Is the government right to anticipate that heat pumps will become the primary heating technology for new homes?

13.Yes, we see heat pumps playing a key role in the phasing out of gas heating. Direct electrical heating should be strongly discouraged over other technologies such as heat pumps which often have a co-efficient of performance (amount of electrical input to heat output) in excess of 3. However, in doing so the performance gap needs to be closed, as identified in the Future Homes Standard Consultation document.

14.This phasing out of gas boilers should occur earlier than 2025 to eliminate need to retrofit later. Further consideration must be given on how to stimulate the growth of the heat pump market and facilitating the necessary technical training. It is our understanding that the predominant plumbing training methods are still focussed on gas boilers, as opposed to alternative heating provisions. A long-term skills programme in tandem with long term retrofit financing is needed to address the skills gap6.

15.Further funding for continuing programmes such as Project Local Energy Oxfordshire (LEO) (see paragraphs 33-35) to support the development of business models for flexibility is needed to manage the impact of additional demand on the electricity grid.

Question: Will the proposals address the performance gap between design intent and build quality of new homes?

16.To address the performance gap, additional resourcing is needed for monitoring and enforcement.

Question: Is the government right to introduce revised transitional arrangements? In addition, the Committee seeks evidence on any other issues relating to either the Future Homes Standard or the Future Buildings Standards.

17.Rather than continuing to accept low-carbon heating and hot water systems in new buildings that are ‘zero carbon ready’, the future standard should require that they are zero carbon from the outset. The consultation aims for new buildings to be capable of becoming carbon neutral over time as the electricity grid and heat networks decarbonise. It is not clear whether the intent is to create buildings which gradually become carbon neutral as the national grid

6 https://publications.parliament.uk/pa/cm5801/cmselect/cmenvaud/347/34706.htm decarbonises or whether they can more easily become carbon neutral with further investment. Either way this does not go far enough and any reliance on future retrofit should be fundamentally avoided.

18.With a number of different initiatives that overlap it is challenging from a strategic market perspective to understand how they interlink. For example, the Minimum Energy Efficiency Standards (MEES) use a methodology that is based on the Trustmark PAS standards and EPC’s. The Building Regulations methodology is not integrated into this, and subsequently leaves the market disjointed with businesses and regulatory authorities needing expertise in both regulations to ensure compliance.

Existing homes

Question: The Committee also seeks evidence on plans for improving the energy efficiency of the existing housing stock, including: Local authorities’ progress towards reducing or eliminating the carbon footprint of their own building estate.

19.Both Oxfordshire County Council and Cherwell District Council have declared a climate emergency and subsequently adopted climate action frameworks to operate at net-zero by 2030.

20.Included in OCC’s Greenhouse Gas Report 2019/20, table 1 shows the comparison of emissions in 2019/20 against baseline year 2010/11. The council is in the process of reviewing its annual targets to meet this objective, and currently tracking progress against a 6% annual reduction target. Figure 1 below shows the boundary of our Carbon Neutrality 2030 target.

Table 1: Emissions Comparisons 2019/20 and 2010/11 Figure 1: OCC Carbon Neutrality 2030 Target Boundary

21.Included in CDC’s Greenhouse Gas Report 2019/20 table 2 shows the comparison of emissions in 2019/20 against baseline year 2008/09. The challenges for meeting the 2030 target include staff resourcing, alternative transport solution in HGV’s, substantial funding constraints, and technical challenges around heat density requirements for leisure centres.

Table 2: CDC Emissions Comparison 2008/09 and 2019/20 (tonnes CO2e)

22.We welcome the Public Sector Decarbonisation Scheme (PSDS) for funding upgrades that aren’t commercially investible.

23.The public sector and the market however need longer timescales for engagement and delivery. A long term, rather than start/stop programme, would help give certainty to the market.

Question: The Committee also seeks evidence on plans for improving the energy efficiency of the existing housing stock, including: The role of local authorities in improving the energy efficiency of non-council building stock, including through take- up of the Local Authority Delivery scheme and the setting and enforcing of energy efficiency standards.

24.We welcome the LAD programme having engaged with LAD1b and working with the Greater South East Energy Hub (GSEEH) on LAD2. We are very supportive of the BEIS approach, which has been to utilise the existing positive relationships Local Authorities already have with its local community to promote these schemes. There are further enhancements that can be made to the schemes, but this has already been noted in the Government’s removal of the Green Homes Grant voucher scheme and the reallocation of funding to the LAD and subsequent HUG grants.

25.The role of local authorise improving non-domestic buildings face a number of challenges including: a. CDC are currently only capable of enforcing MEES on clear breaches. b. Emerging Local Plan takes years to develop creating a difference between aspirational alignment and operational rollout. This can also lead to Local Planning policy becoming out of date, for example, CDC’s current plan was geared to comply with Code for Sustainable Homes before it was removed during its development. As a result, Local Authorities have to develop and operate policies at risk, with no clear opportunities for stability, and this can lead to operating in a grey area. c. Given the greater focus in this policy area, we would like to greater capacity within our planning teams to assess Energy Statements. d. When building regulations are set at national policy level and Local Authorities lose out on ability to tackle locally specific challenges and opportunities we face when meeting requirements.

26.We welcome the current BEIS approach to use Local Authorities to connect with households (as opposed to a centralised approach), though there are challenges: a. Oxfordshire Energy Strategy highlights a need to deliver 4000 retrofits per year. Local Authorities are currently not resourced and will need external finance and support to deliver this. Currently, the market is too disjointed, with an integrated approach only emerging recently in PAS2030/2035 standards. This has caused concerns around skills and depth in the supply chain. b. As outlined in the Committee on Climate Change’s (CCC) progress report, Growing back better: putting nature and net zero at the heart of the economic recovery, the Green Homes Grant voucher and LAD schemes are fundamentally flawed in not being able to increase installer numbers, limiting the deliverability of these schemes.

c. Due to previous national policy reversals, the current policies are only now moving the agenda further forward compared to the previous Carbon Emissions Target scheme in terms of wide market uptake, and still fails to understand the advantages of a stable market offering to those who are most vulnerable. 27.Because of the relationship between housing quality and public health, Local Authorities are also well placed to improve energy efficiency in domestic buildings, due to our role in public health and placemaking. Public Health England have published research into the cost of housing-related ill health, where poor housing conditions are a main contributor, estimating that the annual cost to the NHS is £2.5bn. This includes costs accrued by primary care services, treatment costs, hospital stays and outpatient visits. According to the Kings Fund, housing interventions to keep people warm, safe from cold and damp are an effective use of resources. Every £1 spent on improving homes save the NHS £70 over ten years7. The Report on Fuel Poverty and Poor Housing Conditions (2019) highlights the need to address fuel poverty within Oxfordshire where the average rate is 8.5%. The rate varies across the County with Cherwell, 7.8%, South Oxfordshire, 7.7%, Vale of the White Horse is 7.4%, West Oxfordshire 7.3% and Oxford City 11.7%, higher than the England average, 10.9%.

Question: The Committee also seeks evidence on plans for improving the energy efficiency of the existing housing stock, including: The role of local authorities in encouraging and enabling private owners to reduce or eliminate their carbon emissions, including through the development of loan schemes similar to the green deal and the delivery of existing grants, such as the Disabled Facilities Grant and Housing Renewal Assistance.

28.Neither OCC nor CDC currently operate loan schemes. There are some third party operators moving into this field, such as Cosy Homes Oxfordshire. This doesn’t negate the need for councils to act in the future, and councils need support from central government.

Question: The Committee also seeks evidence on plans for improving the energy efficiency of the existing housing stock, including: The role of MHCLG in making the existing housing stock more energy efficient, including through its review of the Decent Homes Standard.

29.In lieu of the Green Homes Grant, stronger legislative requirements, and clarity on what is the Government’s long-term strategy is required to enable and incentivise homeowners to fund retrofit.

30. Fundamentally we agree with BEIS that there is a market gap in the retrofit/ private rental sector of bringing properties up to a habitable standard and that properties which are F and G EPC rated are ‘substandard’ or effectively defective. Ultimately nothing short of legislation will enforce the necessary widespread change that is required, with the substantial health, wellbeing, fuel poverty, air quality and climate change benefits identified by BEIS being reached, and welcome the direction BEIS is taking.

7 https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/35 7409/Review7_Fuel_poverty_health_inequalities.pdf Local government’s path to net zero

Question: The Committee also seeks submissions on how else local government help the UK achieve “net zero” emissions by 2050, particularly in relation to improved and decarbonised public transport, waste management and decarbonising the electricity grid.

31.Oxfordshire is committed to deliver 100,000 houses by 2031, and to plan for further housing up to 2050. These homes must be low-carbon, energy and water efficient and climate resilient. The Oxfordshire Energy Strategy and Oxfordshire County Council’s Climate Action Framework sets a target to reduce countywide emissions by 50% by 2030 (compared with 2008 levels) and set a pathway to achieve a zero carbon county by 2050. CDC have set a more ambitious target within the Cherwell District Council’s Climate Action Framework, with a target to enable a zero carbon Cherwell by 2030.

32.In delivering these ambitions, there is a clear role for local authorities, as solutions become more localised and energy systems more decentralised. OCC and CDC have developed several projects and policy documents that support achieving net zero emissions by 2050.

The LEO Project 33.Project Local Energy Oxfordshire (LEO) is one of the most ambitious, wide- ranging, innovative, and holistic smart grid trials ever conducted in the UK. LEO will improve our understanding of how opportunities can be maximised and unlocked from the transition to a smarter, flexible electricity system and how households, businesses and communities can realise its benefits.

34.UK’s electricity system is changing. The increase in small-scale renewables and low-carbon technologies is creating opportunities for consumers to generate and sell electricity, store electricity using batteries, and even for electric vehicles (EVs) to alleviate demand on the electricity system by charging at periods of low demand. To ensure the benefits of this transition are realised, Distribution Network Operators (DNO) like Scottish and Southern Electricity Networks (SSEN) are becoming Distribution System Operators (DSO).

35.Project LEO seeks to create the conditions that replicate the electricity system of the future to better understand these relationships, and grow an evidence base that can inform how we manage the transition to a smarter electricity system. It will inform how DSOs function in the future, show how markets can be unlocked and supported, create new investment models for community engagement, and support the development of a skilled community positioned to thrive and benefit from a smarter, responsive and flexible electricity network.

Local Transport and Connectivity Plan 36.Oxfordshire County Council’s emerging Local Transport and Connectivity Plan has proposed climate be at the centre of its vision, “Our Local Transport Plan Vision is for a net-zero Oxfordshire transport system that enables the county to thrive as one of the world’s leading innovation economies, whilst supporting clean growth, protecting our rich and varied natural and historic environment and being better for health and wellbeing, social inclusivity and education. Our plan sets out to achieve this by reducing the need to travel, securing high quality gigabit connectivity, and by discouraging unnecessary individual private vehicle use through making active travel, public and shared transport the natural first choice.”

North West Bicester and Eco Business Centre 37.CDC in partnership with Bioregional and A2Dominion, delivered NW Bicester, the UK’s first eco-town, a 6,000-home extension to the market town of Bicester, with highly sustainable, true zero-carbon homes plus workplaces, schools, community facilities and abundant green space. It is the only development to be built to the original high sustainability standards outlined in the UK’s official government Eco Towns Planning Policy Statement (PPS) 2009. The policy was scrapped in 2015.

38.The work with Bioregional led directly to the development of a toolkit, known as BEPIT, which is proven to help housebuilders manage risk and improve the build quality of new-build developments. Bioregional led a £1.3 million, four-year research project, on the first phase of NW Bicester, to radically narrow the performance gap between the energy and carbon savings that new housing promises and what is actually achieved. This project, funded by the UK government agency Innovate UK, also aimed to reduce the cost premium for new homes meeting very high sustainability standards.

Hope Close, Banbury Passivhaus development 39. Within the historic town of Banbury CDC delivered 11 two- and three- bedroom terraced homes, all Passive certified. At inception, the Build! Team at CDC wanted to review a range of different procurement routes and construction methods. Building low cost in use homes that are sustainable to the environment as well as high quality are objectives of the Build! Team - Passivhaus was considered to be a building standard which helps to meet those objectives.8

Oxfordshire Greentech Partnership’s OxFutures Project 40.OxFutures is a £3.2m project to boost low carbon economic development in Oxfordshire. It is supported by the European Regional Development Fund and run through a collaborative partnership between the Low Carbon Hub, Oxford City Council, the University of Oxford, Oxford Brookes University, Cherwell District Council and Bioregional.

41.Cherwell District Council and Bioregional are developing a new, county-wide networking organisation, building on the new Eco Business Centre in Bicester. Oxfordshire GreenTech will run Special Interest Groups, open to any

8 https://beattiepassiveprojects.com/banbury/ interested SMEs, which will support knowledge transfer from Oxfordshire GreenLab to SMEs throughout the County. Special Interest Groups will focus on topics including: a. The Built Environment: small-scale building companies will be supported to learn about new generation and demand reduction technologies and how to sell these products and services to their existing market of SME and domestic clients b. Electric vehicles (EVs): SMEs will be supported to learn about how EVs and charging infrastructure can help their business to become more energy efficient c. Social enterprise: SMEs and potential entrepreneurs will be supported to learn about the opportunities for social enterprise arising from the learning generated in Oxfordshire GreenLab

Park and Charge Oxfordshire 42.Although there is an increasing number of electric vehicles on the roads, one of the main barriers currently preventing Oxfordshire residents making the switch to electric vehicles is a perception of a lack of charging infrastructure. Park and Charge Oxfordshire aims to change this perception by giving residents and visitors access to well positioned car parks, charging hubs and all wealth of resources and real-life experiences to give confidence and encourage others to make the switch. In 24 car parks across the county electric vehicle chargers will be installed, giving residents with no off-street parking the ability to park for free overnight and charge their electric vehicles with competitive prices.

43.Park and Charge Oxfordshire is an initiative funded by The Office for Zero Emission Vehicles and Innovate UK, and delivered by Oxfordshire County Council, SSE Enterprise, Zeta Specialist Lighting, Urban Integrated UK, EZ Charge and University of Oxford. The project team also works closely with Cherwell District Council, West Oxfordshire District Council, South Oxfordshire District Council and the Vale of the White Horse District Council as hosts of the Park and Charge EV hubs.

April 2020