Oxford City Council is set to bid for government funding to help improve energy efficiency in up to 300 council homes in the next three years.
Next week, cabinet is expected to approve submission of a multimillion pound bid to the government’s Social Housing Decarbonisation Fund (SHDF) to help fund what would be its largest retrofit programme to date.
The council will seek government funding of around £3 million and provide match funding from the housing revenue account (HRA) of around a further £6 million to create a retrofit programme of around £9 million.
Retrofitting means adding new features to existing buildings and this programme would involve a ‘fabric first’ approach – minimising energy use through modifications like enhanced insulation, maximising air tightness and optimising natural ventilation and light.
Why this is needed
The council has a target of getting 95% of its 8,000 council homes to an EPC (energy performance certificate) C or above by 2030.
The new generation of council homes now being delivered by council housing company OX Place is highly energy efficient, with a typical EPC rating of at least B. This is not true for all council homes, most of which were built before the 1980s.
There are currently 2,466 council homes with an EPC D or below and achieving the 95% target will require substantial investment. There is a big variation in the degree of retrofit work needed across different property types, which independent consultants estimate could cost between £64 million and £151 million in total.
The current four year HRA business plan includes £8.7 million for retrofitting council homes, with another £37 million earmarked for capital spend in the following 10 years.
The SHDF bid targets 300 homes – around 12% of council homes with an EPC D or below. The council regards the bid as necessary to kickstart its retrofit programme but says that significant and sustained external funding will continue to be needed to achieve its targets.
Improving energy efficiency in council homes will benefit tenants, enabling them to reduce their energy usage against a backdrop of sharply higher gas and electricity prices. It will also support the council’s work towards a net zero carbon Oxford by 2040.
Initial modelling for the retrofit programme suggests it could deliver energy bill savings of up to £750 a year at current prices.
Residential buildings are the largest contributor to Oxford’s carbon emissions, making up 29% of total emissions. Social housing accounts for around a fifth of all emissions from housing.
The council has undertaken an analysis of its least energy efficient homes to target for SHDF retrofitting and the bid will identify particular groups of property types for inclusion in the programme. The bidding round for the £800m SHDF closes on 18 November, with successful applications due to be announced in February or March 2023.
Council officers have already started the process of discussion with tenant representatives over the proposed retrofit work and this will be stepped up over the coming months. Detailed engagement with individual tenants will be undertaken once the outcome of the bid is known.
If the council’s bid is successful it will procure contractors for the retrofit work, which must be completed by the end of September 2025.
“We’ve got a target of bringing 95% of council homes up to EPC C by 2030 and we still have 2,446 homes not up to that standard.
“If we’re successful, our SHDF funding bid will help us create a £9 million retrofit programme bringing 300 council homes up to EPC C or better. This will mean crucial energy bill savings for tenants of up to £750 a year and help us deliver on our strategic priorities of great homes for all and housing for a net zero carbon future.
“But SHDF can only be a start. While we plan substantial investment from our HRA to improve energy efficiency in council homes we still need to deliver on other priorities like building more affordable homes. The scale of the challenge is clear and we will need significant, sustained government funding to achieve our target.”
Councillor Linda Smith, cabinet member for housing