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Council to approve final funding to deliver landmark £60m energy efficiency and decent homes programme

A report going to a meeting of the full Council in July will seek approval for the final funding required to deliver the largest sustainable homes investment programme in the city’s history over the next two years.
Beswick One Manchester Zero Carbon 2

More than 2,100 Manchester homes are set to receive energy efficiency works – alongside wider home upgrades – as part of the city’s target to become net zero carbon by 2038, while improving the health of residents and reducing the cost of running Manchester homes.

The Council has already successfully bid for two major funding pots from the Department for Energy Security and Net Zero (DESNZ), with one of the bids (Social Housing Decarbonisation Fund) being part of a consortia bid by Greater Manchester Combined Authority.

Social Housing Decarbonisation Fund (SHDF)

£49.7mn will be invested in 1,603 Council-owned homes to improve sustainability through a range of works, which include better property and roof insulation, solar paneling, new boilers or heating systems, and air and ground heat pumps

This includes £11.6mn from DESNZ’s Social Housing Decarbonisation Fund and a £38mn contribution from the Council’s capital programme. At the same time, part of this funding will be also used to deliver a range of decent homes investments in the same properties, including building safety and fire safety work, to limit disruption to the residents while work is taking place.

Currently, the grant funding is limited to properties rated EPC D or below with the expectation that the measures will improve most properties to EPC C rating – and to EPC B in some cases.

Retrofit surveys to inform the extent of the programme of work are already underway. The whole programme is expected to be completed in September 2025.

There are a further 1,538 social homes owned by the city’s Registered Providers that will be retrofitted through their own SHDF schemes. (Southway – 1,112; One Manchester – 150; and Wythenshawe Community Housing Group – 276)

Home Upgrade Grant (HUG phase 2) – private properties

This funding will be used to support low-income households in the private sector to improve the energy efficiency of their homes.

£10mn from DESNZ’s Home Upgrade Grant fund will be provided to help improve the EPC rating of 500 privately owned homes from D or below to C. The funding targets properties which do not currently use gas as their main heating fuel and those meeting other criteria set by DESNZ.

This programme of work will begin later in 2023 and will be completed by March 2025.

Manchester’s journey to Zero Carbon

The Council’s Housing Strategy that was agreed last year looks to retrofit a third of all social housing in the city to become EPC band B by 2032 as part of the journey to become a net zero carbon city by 2032.

Manchester has a high number of social homes compared to similar cities. Around 70,000 homes are for social rent and of these, circa 16,000 are owned by the Council.

The Council’s Housing Services team is leading the way in this work with a plan to retrofit 60% of the Council-owned properties by 2032.

The Council is committed to reducing the carbon impact of the city and will need to navigate a range of major challenges to meet these targets.

Manchester’s homes are dominated by pre-war and mid-century homes with a high number of uninsulated homes and low levels of roof insulation. Gas heating is also the most common heating system in 80% of our homes with new technologies such as heat pumps representing around only 2% of the housing stock.

Nationally, there is relatively little funding to invest in Council-owned homes at scale, which means Councils must pay for retrofitting works through their Capital Programme and Housing Revenue Accounts – competing for investment alongside wider capital projects and the need to deliver decent homes works alongside retrofit projects.

The Climate Change Framework 2022 document says that to reduce the city’s emissions by 50%, 84,000 properties need to be retrofitted with an estimated cost of £2.1bn – which means private sector homes will also need to take up the low carbon challenge, using all available opportunities available to the Council and homeowners in the city.

Private Sector Homes

There are currently 79,000 owner occupied homes in the city and 93,000 rented by private landlords. A key issue in this sector remains cost and some owners may be either unwilling or unable to afford retrofit works to their homes.

In addition to the HUG2 funding that the Council has secured to deliver energy efficiency improvements in private homes, a number of other initiatives are underway.

A management agent has been procured by GMCA (Your Home Better) to provide impartial advice to homeowners about how to retrofit their homes, along with recommended steps and likely costs.

The Council also offers interest free loans of up to £10,000 (administration fee payable) through the Home Energy Loan Plan (HELP) to help fund sustainable energy investment – mainly aimed at older people or those being discharged from hospital where poor quality heating might be a barrier to returning home.

A Warm Homes Manchester scheme will access some £150mn of available national funding. This will help to install low carbon central heating and improve insulation for an initial 50 homes.

Together with Greater Manchester Combined Authority, the Council are also working with organisations to maximise and deliver energy improvements to low-income eligible households under the government’s Energy Company Obligation 4 (ECO4) scheme.

Manchester’s zero carbon story so far:

To date, significant progress and investment has been made towards city-wide retrofitting projects.

£83mn has been spent on energy efficiency improvements to Council properties in north Manchester since 2005 leading to a 49% reduction in CO2 emissions (from 55,000 to 28,000 tonnes of CO2) in the homes that have received investment.

2,100 Residents received energy advice since 2013, saving them an estimated £370k and 500 tonnes of CO2.

Investment in the Council’s own stock to date includes:

External insulation to 1,600 solid wall properties and 14 high-rise blocks of flats

Cavity wall insulation to 5,100 homes and top-up loft insulation to 7,000 homes

Installation of 580 heat pumps and 2,350 solar photovoltaic (PV) systems

This investment has been supported by £12mn contribution in the form of external grants to since 2010.

Cllr Gavin White, Manchester City Council’s executive member for housing and development, said:  “Housing is a major source of carbon usage and therefore investing in energy efficiency measures is a key element of our journey to become a zero carbon city by 2038. This £60mn represents the biggest investment in low carbon retrofit works in our history and is testament to our commitment to reducing our collective carbon emissions.

“The challenge is significant but one we need to tackle head on. We have around 70,000 social rented homes in the city – 16,000 owned by the Council – and we have committed to retrofitting 60% of those that we own by 2032.

“We also need residents to come on this journey with us. These works will require us to work directly with Council tenants and private owners – and although inevitably there will be some short term disruption, the end product is warm, healthier, more efficient – and ultimately cheaper to run – homes for our residents.”

Cllr Tracey Rawlins, Manchester City Council’s executive member for environment and transport, said: “This is an incredibly ambitious investment by the Council helping to retrofit homes in the city that are in the most part dominated by pre-war and mid-century proeprties, many with lower standards of insulation and poor energy performance ratings.

“Retrofitting older housing is an emerging field that requires a broad range of works and is currently very expensive. We would urge for more national funding to be made available to support Councils to invest in our homes and support our journey to zero carbon.

“However, there is also opportunity here. A broad range of skills are required with significant opportunities for work in the coming years to meet the retrofit agenda. In the last year alone, 500 people across Greater Manchester had gained the skills to meet the retrofit challenge and we would encourage people to find out how they can get involved.”

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