Source · Select Committees · Housing, Communities and Local Government Committee
Recommendation 3
3
Deferred
Paragraph: 37
Deliver sufficient grant funding and urgently release next Social Housing Decarbonisation Fund tranches.
Recommendation
Making social housing more energy efficient is crucial for the country’s decarbonisation goals, but, of course, it is also a significant cost for social housing providers. Because energy efficiency improvements do not return savings to social housing providers or private investors, there is little, if any, scope for borrowing to fund decarbonisation measures and private finance is not well developed. The Government must deliver grant funding to cover decarbonisation if these costs are not to be paid for by social housing providers or their residents. Although Government funding exists to cover a fraction of the costs it is insufficient, and therefore puts social housing providers under financial pressure. To mitigate this the Government must bring forward the next tranches of the Social Housing Decarbonisation Fund urgently.
Government response summary AI-generated
The government's response discusses the regulator's standards concerning tenant engagement, fairness, and security of tenure during regeneration projects. It does not address the recommendation for increased grant funding for social housing decarbonisation or the urgent release of Social Housing Decarbonisation Fund tranches.
Summary of the government's response below — read the verbatim text to verify.
Paragraph Reference:
37
Government Response
Deferred
HM Government · verbatim extract
Deferred
However, the sector also faces significant financial pressures, as the committee notes in its report. These include necessary expenditure on existing stock to ensure this meets safety, quality and energy efficiency expectations and the increasing cost of capital as a result of higher interest rates which impacts the sector’s ability to build new homes for future tenants... Investment by the sector in repairs and maintenance is at record levels with further significant increases forecast. Over the next five years, repairs and maintenance expenditure is forecast to amount to £50bn, 43% of social housing lettings turnover... Increasing expenditure on repairs at the same time that rents have been capped below inflation and interest rates have risen is the main reason that interest cover (ratio of surplus to debt repayment costs) has gone down and recently fell to its lowest level. The increased investment in existing stock is impacting on providers’ capacity to invest in new supply which is being reined in to meet the demand for spend on existing stock.
Read the full response on Parliament ↗