‘(1) The Home Energy Conservation Act 1995—
(a) ceases to have effect in Scotland;
(b) ceases to apply in relation to energy conservation authorities in Wales.
(2) In section 1 of that Act (interpretation) in the definition of “energy conservation measures” after “promotion,” insert “any available financial assistance,”.
(3) In section 1 of the Sustainable Energy Act 2003 (annual report on the progress towards sustainable energy aims)—
(a) subsection (1)(e) and the “and” immediately preceding it cease to have effect, and
(b) subsection (1AA) ceases to have effect.
(4) In section 4 of that Act (energy efficiency of residential accommodation: energy conservation authorities) subsection (13)(b) ceases to have effect.’.
With this it will be convenient to discuss the following:
Government amendment 67.
That schedule 3 be the Third schedule to the Bill.
Government amendment 81.
Good morning, Mr Leigh. It is a pleasure to be serving under you on the last day of the Committee. With your permission, before turning to the Home Energy Conservation Act 1995, I will report to the Committee on matters arising from the last sitting.
I agreed to write to members of the Committee to set out the role of the energy company obligation in promoting innovation, and I have done so. I offered the hon. Member for Southampton, Test, the opportunity to engage, outside the Committee, with our work on the ECO brokerage concept, and I have instructed my officials to contact his office to arrange a mutually convenient date for that to begin. Following on from my original letter, the hon. Member for Brighton, Pavilion, raised another question about service charges in the private rented sector, and I have written to her with further information on that topic. Finally, by the end of the week, I will write to her again, copying in members of the Committee, about our current thinking on a strategy for a more ambitious approach to distributed energy.
Government amendments 66, 67, 75 and 81 relate to the Home Energy Conservation Act 1995. When I first turned my attention to HECA some time ago, I discovered that it was pretty moribund—dormant—with very little sign of a pulse: if not actually dead, it was doing a good impression of being so. There was certainly a logic in deleting it from the statute book as legislation that had never lived up to the hopes of its original proposers, and as such it seemed to be no longer needed. However, the more that we have considered it—certainly following the debate in the other place—and the more that I have listened to the views of colleagues and stakeholders, both inside and outside Parliament, which have been expressed during the passage of the Bill, the more I have been convinced that HECA can be resuscitated and revived. It can have an important, continuing role in the future, if it is handled in the right way and if there is a commitment from the Government to use it.
I will explain why. I am sure that hon. Members will agree that it is important that all local authorities play a role in addressing climate change. On energy efficiency, they play a role in delivering the green deal and the energy company obligations in their local communities. I am greatly encouraged by the enthusiasm that already exists among a great many local authorities. Some are actively looking to become early green deal providers themselves. Others are looking at how they can form partnerships to deliver programmes in their areas.
That enthusiasm is embodied in the memorandum of understanding between my Department and the Local Government Group. Yesterday, I addressed a conference at the Royal Society entitled “The green deal and the big society”. There were more than 300 people there, largely drawn from local government and local community action groups. That was very encouraging.
We listened to the concerns expressed during the passage of the Bill on the importance of ensuring that not only the keenest, but all local authorities take action. In particular, I recognise the contribution made to the debate by the Association for the Conservation of Energy. Having reflected on its contributions and other contributions more widely, the Government are persuaded that an appropriate provision should exist to explicitly encourage local authority action. HECA requires all authorities to report on practicable and cost-effective energy conservation measures that are likely to result in a significant improvement in the energy efficiency of residential accommodation in their areas. We have therefore decided to retain the Act in England.
The green deal will provide a cost-effective vehicle, enabling local authorities and other to make the improvements in housing stock that HECA was originally intended to drive. HECA never fulfilled its potential and never lived up to the promise of its original sponsors because it was typical of the sort of Bill that legislates for a certain outcome and makes no provision for the means to achieve it. With this Bill we are changing that and creating, with the green deal and the ECO, the means, the framework and the ability to drive that agenda on a scale that is commensurate with the challenge of retrofitting up to 14 million homes by 2020, with more in the following decade.
To help with that drive, HECA recognises the role of local authorities and requires local authorities to report accordingly. We propose a small amendment to the definition of an “energy conservation measure” in HECA to take account of the additional green deal proposition. The inclusion of the words “any available financial assistance” will encompass the types of green deal financial assistance that will be on offer, along with the potential financial assistance that the ECO might offer local residents.
We will work closely with the Local Government Association and a range of organisations to consider how we can best frame future guidance, which we will issue under HECA to local authorities, spelling out in greater detail what, in the early stages of the green deal, we expect of them, and how we propose to work with them to drive the programme forward at local level. There will be, as with other parts of the Bill, further detail in secondary legislation. We will come through with those details in due course. In the coming decades, however, HECA will have a positive role to play. It will finally be a vital tool in encouraging the engagement of all authorities—not just the usual suspects that we are familiar with—without imposing undue, unfunded burdens.
It is a pleasure to serve under your chairmanship, Mr Leigh, in the Committee’s penultimate sitting.
In his contribution, the Minister said that there was little sign of a pulse in HECA, which had become moribund. It is true that the HECA review of 2007 concluded that authorities had been reluctant to allocate funding for monitoring HECA progress. In fact, 62% of local authorities had not allocated any financial budgets to HECA officers for their annual reports.
Limited financial resources has resulted in limited monitoring methods. I am keen to know what the Minister foresees in secondary legislation that will ensure some budget for HECA officers, which is necessary to ensure that they fulfil their commitments to do produce HECA reports. Local authorities up and down the country are finding it very difficult, because their budgets have been considerably squeezed. Will they be able to fulfil the responsibilities in the amendment and under HECA?
Under the amendment, HECA will cease to have effect in Scotland and Wales. Why is there a different approach to Scotland and Wales? What are the implications of that change?
After we consulted the Scottish and Welsh Administrations, they asked that we continue with the repeal of HECA on their behalf, so it will not apply in Scotland and Wales. The devolved Administrations will, however, continue to work with their local authorities to progress the national energy saving initiatives that they already have in place. They will continue to ensure that they fully participate in the green deal and all it has to offer. Basically, they have alternative arrangements that come under the competence of the Welsh and Scottish Executives, which, they judge, make HECA superfluous. I guess that because HECA was not seen as being effective over the past decade, the Welsh and Scottish Executives introduced their own arrangements, which they will boost to drive forward the green deal. It is not that they reject the agenda, but that they have another means of delivering it.
On finance for local authorities to deliver on HECA, it is clear that many local authorities are already supporting activities on that agenda on a voluntary basis, because we have provided voluntary guidance on it. I would go further, however, and suggest that the measure is not only an opportunity for local authorities to save money by utilising officer time that they already devote to the issue; it is an opportunity for them to make money. They could go for the green deal localist max position; they could enter into arrangements with private sector partners to create energy service companies, and into partnerships with local businesses and enterprises; or they could create national partnerships. If they use the power of their brands as trusted organisations, they will play a very important role in working in partnership to offer programmes on a large scale in their areas with the private sector.
Whether Marks and Spencer or a local plumber, those in the private sector will make profits from such action. They will be gaining a market share and making a sensible return. The opportunity to work in partnership with local authorities is an attractive, commercial proposition. It bypasses the need to engage in lots of advertising and above and below the line marketing that would otherwise be required to gain customers. Clearly, we cannot spell out such matters in legislation, as it would be at the discretion of each local authority, but by being partners in the roll-out of local programmes, enterprising local authorities will have the opportunity to capture back their costs as well as the potential to raise more money to reinvest in the agenda.
Given the consequences that the Minister describes, there is no reason for local authorities, either directly or indirectly through organisations with which they go into partnership, to provide green deal assessor services. They would be trusted, and residents could then buy the GDA services from their local authority or subset organisation and take them into the private marketplace.
I am not absolutely clear about the point that my hon. Friend is making. Few local authorities would go into business by themselves, but they would as part of a co-operative, partnership or social enterprise, or even at the most basic level endorse the product of a chosen partner that best fitted their scope and criteria in offering the best to their residents. As such, that will have a value to the commercial partners with which they choose to align themselves, and it is not unreasonable that they should be compensated for that.
I do not anticipate that many local authorities will want to become exclusive green deal providers directly, but that is by no means impossible. However, all sorts of innovative ideas are springing up, and several social housing providers are entertaining ambitious plans to enter the green deal market by providing green deal measures not only to their own tenants, but the wider housing area. The beauty of the green deal is that it gives rise to all sorts of possibilities. I am sure that different local authorities and community groups will respond in different ways. Our job is to provide an overarching framework to enable them to flourish and to maximise the entrepreneurial potential of the programme. It is not a case of getting local authorities or local government out of the way, but seeing that they can be a real partner in the agenda.