Energy efficiency in UK homes must become a “national infrastructure priority” – with Government committing to a target of retrofitting 1 million homes a year by 2020, says a major new coalition of 20 organisations from the construction, housing and environment sectors. In an open letter to Lord Deighton, Commercial Secretary to the Treasury, the heads of environmental groups, charities, membership organisations and trade associations warn that the UK’s homes are among the “coldest and draughtiest in Europe” resulting in high energy bills and “one of the worst records on fuel poverty and preventable winter deaths”.

They argue that Government should direct £3-4 billion a year in capital investment to fund a significant programme of energy efficiency to transform the UK’s aging housing stock. This investment would address market failures and leverage substantial additional private investment. Treasury estimates annual capital investment in infrastructure at £45billion per year (see notes to editors).

The leaders write: “Domestic energy efficiency is one of the most cost effective ways to achieve the Government’s three strategic priorities for energy infrastructure: controlling energy bills, tackling climate change and unlocking investment to support economic growth.”

“No other investment can achieve so much for individual householders and for UK Plc.”

The letter coincides with the publication of a short report, titled A housing stock fit for the future, setting out the strong economic benefits for improving home energy efficiency. These include:

Generating significant economic growth and doubling the number of jobs in the energy efficiency sector to 260,000.

Improving energy security and reducing the UK’s reliance on imported gas.
Reducing carbon emissions to meet carbon targets and combat climate change.
Permanently reducing energy bills by £300 a year and lifting nine out of 10 homes out of fuel poverty.
Improving health and wellbeing, reducing excess winter deaths and lowering NHS and social care costs.

Nigel Banks, Sustainability Director at Keepmoat who led the development of the report with the UKGBC, said “A cold winter this year would put this policy front and centre in the general election campaign given there are seven million voters living in fuel poverty, which we hope will help drive manifesto pledges.

“We believe that improving the energy efficiency of Britain's housing stock should become a key national infrastructure priority for the Government. The current national infrastructure plan admits that domestic energy efficiency is one of the most cost effective ways to secure the growth of green construction jobs, cut carbon emissions, reduce fuel poverty and improve the health of millions of people. It is clear that no other investment can achieve so much for individual householders across Britain as well as UK Plc.”

The cost estimate of £3-4bn per year is based upon fully funded installations for 500,000 low income households and the provision of low cost loans to 500,000 able-to-pay households. (Consumer Futures, Raising Standards, cutting bills, June 14)

The Government’s National Infrastructure Plan 2013 indicates annual infrastructure investment at £45billion per year.

As a national infrastructure priority, energy efficiency would be eligible for Government capital spending that could be used to overcome barriers to delivery. Capital investment could be used to subsidise low cost loans for householders and a programme of targeted installations for the fuel poor. Government could also provide an overarching strategy to give confidence to investors in the infrastructure pipeline and help facilitate a clear delivery plan.

The energy efficiency sector has enormous potential to attract investment and provide a major source of additional income for Government. For every €1 of public funds spent on the KfW Energy-efficient Construction and Refurbishment programme in Germany in 2010, over €15 were invested in construction and retrofit, and more than €4 went back to the public finances in taxes and reduced welfare spending.