full 30560 - The Death of DECC and the Future of Retrofit, with comments from UCL’s Professor Paul Ruyssevelt

Josie Muncaster, 19th July 2016

On Thursday last week, the Department for Energy and Climate Change was abolished, and will now merge with the Department of Business Innovation and Skills (BIS) to create a completely new Department for Business Energy & Industrial Strategy (BEIS). Many of the carbon saving policies to date, including the 2008 Climate Change Act and financial support for retrofit through the Green Deal Communities Fund stemmed from DECC. So too the Bonfield Review, which was commissioned by the then Secretaries of State for DECC and DCLG, Amber Rudd and Greg Clark in 2015.

Reflecting the vast changes in our government over the last few weeks, there will most likely be some monumental changes ahead for the retrofitting industry. As the focus of the government has shifted away from the environment and climate change, it is likely that it will become harder to find retrofit champions in government. This could see retrofit slip further down the agenda, as policy areas such as Brexit and the economy take precedence. It is important to remember however, that the issues of Brexit, the economy and retrofit are intricately linked. At the moment, the EU still outlines a lot of the energy requirements for buildings, both domestic and non-domestic, but this could change dramatically in the next few years when the UK is no longer bound by the 80% EU carbon reduction target. The strength and focus of the economy also naturally dictate the amount of financial support that retrofit schemes will receive. The apparent lethargy of the retrofit market at the moment, it could therefore be argued, is because the finances don’t stack up in favour of deep or even light retrofitting. In order to revamp the market, BEIS will need to work with the industry to bring the cost of delivery right down, and provide a stable policy environment.

Professor Ruyssevelt’s thoughts on how the merger will impact:

Building Regulations

Building Regulations and the requirements for EPCs and DECs remain with the Department for Communities and Local Government and should be unaffected by the demise of DECC. However, many of the energy requirements relating to buildings stem from EU directives, so these may be further impacted by Brexit.

Minimum Energy Efficiency Standards (MEES)

MEES are an exception, and as they stem from the 2011 Energy Act it is to be hoped that the requirements to lift the performance of F and G rented properties will be maintained as an important component in the drive to meet the 5th Carbon Budget. In current plans, properties that do not meet at least E standard EPC by 2018 will become illegal to let.

Research funding  

DECC has funded a lot of research over recent years in the field of retrofit, both directly and indirectly via Innovate UK (TSB). This research does not now need to be repeated as a result of the change, but it is important that lessons are learnt from the extant research, enabling retrofitters to get on with the task of retrofitting our sub-standard building stock.

The Bonfield Review team released their newsletter as normal on Friday with no mention of DECC or the new Department for Business Energy and Industrial Strategy. There is still no formal release date for the findings and recommendations of the review yet. Although many of the functions of DECC will continue within their new departmental home, the act of removing the words ‘climate change’ from the title could have a significant impact on the focus and direction of the department, pushing it further away from limiting the effects of climate change and more towards energy and industry. ‘It is to be hoped that the Committee on Climate Change will continue to hold all relevant government departments to account when it comes to meeting the legal requirements of the Climate Change Act and the targets set out in the 5th Carbon Budget. On the other hand, merging DECC into Business, Energy and Industrial Strategy could also be a positive move because it allows for the alignment of the energy efficiency benefits from retrofit with the jobs and wealth creation benefits’ (Ruyssevelt, 2016). It also means that the stature of the department in which DECC issues are now addressed, is much larger and has much more political clout within Whitehall than it used to have. Greg Clarke’s appointment as Secretary of State for BEIS could also have positive implications for the future of retrofit and the fight to reduce the human impact on climate change. He was the former shadow minister for Energy and Climate Change, former Secretary of State for Communities and Local Government and in his statement about BEIS, indicated that he was ‘thrilled to be charged with…providing clean energy and tackling climate change’. All that we in the retrofitting industry can do for the moment though, is sit and wait and watch to see what his first move is going to be.