We don't just have a housing crisis, we have a green housing crisis

The need for 'low impact building', through both 'retrofitting' older properties with new technologies and new builds, is urgent.

The UK has some of the oldest and leakiest housing and property stock in the world. At the same time we have a stiff target of reducing carbon emissions (by 34% by 2020 from a 1990 base). Sounds gloomy, but this giant problem could also be a saviour in revivifying the UK economy. 'Greening' the world's buildings is going to mean big business for those firms with the right skills and knowledge. Not just builders but the whole supply chain, from architects and product designers to lawyers and plumbers. Estimates put the market for low carbon building technologies in our region, the West Midlands, at around £1.7 billion.

The need for "low impact building", through both "retrofitting" older properties with new technologies and new builds, is urgent. Those carbon targets, rising energy prices and some looming legislation (from 2016 all new housing needs to "zero carbon", and from 2018 the Energy Act makes it unlawful for landlords to lease residential or commercial buildings with an Energy Performance Certificate rating of an F or G), makes change inevitable. And yet the response from industry and landlords is still hesitant and limited.

A clear commitment is needed from Government. A coherent and consistent regulatory and legislative landscape for sustainable building needs to be in place to secure the issue, to reassure everyone involved that schemes like the Green Deal are not a fad but the new reality of property development and home ownership. UK industry in particular needs to be given the necessary confidence that demand for refurbishment products and renewable and low carbon technologies is ongoing, that all the investment in research and development is worthwhile, and that recruiting and training a new legion of experts and installers makes sense.

SMEs are a missing link. With the ongoing recession in construction you'd expect firms of all sizes to be chasing the new opportunities but instead smaller firms are reluctant to make any investment in new approaches and up skilling when budgets are tight; large contracts remain out of reach, and potential partners are put off by their lack of green technology know-how. But the potential remain huge for those firms willing to commit themselves to the low impact buildings market, and provide an important supply chain of innovative sustainable approaches and solutions for the big contractors. To make this happen firms need to get advice and support to make the change. For example, in the West Midlands - where construction and related firms have seen the biggest decline - Coventry University is running the Sustainable Building Futures (SBF) project for small to medium sized businesses to help them make themselves competitive for the future (until June 2015). Co-financing from the University and the European Regional Development Fund (ERDF) means the help is all provided free for eligible organisations.

There is still a skills and knowledge issue in the UK. There are question marks over whether the quality of installation of new technologies can be guaranteed, and with products available at reasonable cost and sourced from UK suppliers. Higher Education has a role in embedding the training requirements for these 'new' skills into existing programmes, as well as being a source of informed opinion on new technologies and their suitability.

The scale of the "greening" project facing us in the coming years means the UK is well-placed to become the expert. Learn some lessons and get the offering right and there's no reason we can't play an important role on a world stage.

Photograph: Getty Images

Professor Mark Gaterell is the director of the Low Impact Building Centre at Coventry University

Photo: Getty Images
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There are risks as well as opportunities ahead for George Osborne

The Chancellor is in a tight spot, but expect his political wiles to be on full display, says Spencer Thompson.

The most significant fiscal event of this parliament will take place in late November, when the Chancellor presents the spending review setting out his plans for funding government departments over the next four years. This week, across Whitehall and up and down the country, ministers, lobbyists, advocacy groups and town halls are busily finalising their pitches ahead of Friday’s deadline for submissions to the review

It is difficult to overstate the challenge faced by the Chancellor. Under his current spending forecast and planned protections for the NHS, schools, defence and international aid spending, other areas of government will need to be cut by 16.4 per cent in real terms between 2015/16 and 2019/20. Focusing on services spending outside of protected areas, the cumulative cut will reach 26.5 per cent. Despite this, the Chancellor nonetheless has significant room for manoeuvre.

Firstly, under plans unveiled at the budget, the government intends to expand capital investment significantly in both 2018-19 and 2019-20. Over the last parliament capital spending was cut by around a quarter, but between now and 2019-20 it will grow by almost 20 per cent. How this growth in spending should be distributed across departments and between investment projects should be at the heart of the spending review.

In a paper published on Monday, we highlighted three urgent priorities for any additional capital spending: re-balancing transport investment away from London and the greater South East towards the North of England, a £2bn per year boost in public spending on housebuilding, and £1bn of extra investment per year in energy efficiency improvements for fuel-poor households.

Secondly, despite the tough fiscal environment, the Chancellor has the scope to fund a range of areas of policy in dire need of extra resources. These include social care, where rising costs at a time of falling resources are set to generate a severe funding squeeze for local government, 16-19 education, where many 6th-form and FE colleges are at risk of great financial difficulty, and funding a guaranteed paid job for young people in long-term unemployment. Our paper suggests a range of options for how to put these and other areas of policy on a sustainable funding footing.

There is a political angle to this as well. The Conservatives are keen to be seen as a party representing all working people, as shown by the "blue-collar Conservatism" agenda. In addition, the spending review offers the Conservative party the opportunity to return to ‘Compassionate Conservatism’ as a going concern.  If they are truly serious about being seen in this light, this should be reflected in a social investment agenda pursued through the spending review that promotes employment and secures a future for public services outside the NHS and schools.

This will come at a cost, however. In our paper, we show how the Chancellor could fund our package of proposed policies without increasing the pain on other areas of government, while remaining consistent with the government’s fiscal rules that require him to reach a surplus on overall government borrowing by 2019-20. We do not agree that the Government needs to reach a surplus in that year. But given this target wont be scrapped ahead of the spending review, we suggest that he should target a slightly lower surplus in 2019/20 of £7bn, with the deficit the year before being £2bn higher. In addition, we propose several revenue-raising measures in line with recent government tax policy that together would unlock an additional £5bn of resource for government departments.

Make no mistake, this will be a tough settlement for government departments and for public services. But the Chancellor does have a range of options open as he plans the upcoming spending review. Expect his reputation as a highly political Chancellor to be on full display.

Spencer Thompson is economic analyst at IPPR