Celebrating Scottish Housing Day at Altair & ATFS

Posted: 14th September 2022 Patrick Goldie, Graduate Consultant

Today marks the seventh annual Scottish Housing Day.  Supported by the Scottish Federation of Housing Associations and the Chartered Institute for Housing Scotland, the event is an opportunity to highlight issues affecting the country’s housing sector.

Following last year’s event, which, ahead of COP26 in Glasgow, focussed on the climate emergency, this year’s Scottish Housing Day is themed around sustainability.

This issue goes beyond zero carbon and encompasses enhancing energy efficiency, build quality and affordability of homes. As in the rest of the UK, it is proving particularly salient for a growing number of households, with rampant inflation eating into disposable income and savings, and the record rises in energy prices.

Many are now having to choose between “heating or eating”.  It is estimated that one million Scottish households – or two-fifths of the country – will be pushed into fuel poverty by next month, and nearly all of these households – 920,000 – will be in “extreme” fuel poverty.

These figures assumed that there would be no major government intervention.  However, last Thursday, the new UK prime minister Liz Truss announced a plan to freeze household energy bills at £2,500 for two years, which will also apply to Scotland.  The governing Scottish National Party (SNP) have criticised Truss’ decision to fund the freeze via borrowing, debt which will ultimately be repaid by taxpayers, as opposed to a windfall tax targeted at energy companies.  Two days earlier, meanwhile, the SNP leader and Scottish first minister, Nicola Sturgeon, stated her intention to reduce cost pressures on households by introducing an emergency rent freeze and eviction ban, applying to both social housing tenants and private renters, which will last through the winter until at least the end of March next year.

Potential control on the rent increases anticipates that there will be a reduction in real rent income, which will make it harder for housing providers to invest in new homes or to undertake repairs, maintenance, and energy efficiency adaptations on existing stock.  Such works will be crucial for enhancing the affordability of Scottish homes in the long term, as well as increasing comfort for residents and shrinking the carbon footprint of buildings, which currently account for 20% of Scotland’s total greenhouse emissions.

Indeed, there are longstanding issues with both the build quality and energy efficiency of Scottish homes.  Around one-fifth are more than a century old, and the Scottish House Condition Survey 2019 revealed that roughly half of all housing stock has “some disrepair to critical elements, such as roof coverings”. While major progress has been made in enhancing the energy efficiency of social housing – following the introduction of the Energy Efficiency Standard for Social Housing (EESSH) in 2014, 89% of social rented homes now have Energy Performance Certificates (EPC) graded D or higher – much work needs to be done to meet the next EESSH target, of EPC B or above by 2032. The housing stock in the private sector, whether owned or rented, remains considerably behind.

State-led initiatives will be a major driver in this area.  The Clyde Mission Heat Decarbonisation Fund will see £25 million invested into “zero emission heat projects and communal heating systems along the Clyde” river. The Scottish Government also has plans to create a new “virtual Public Energy Agency, to drive forward increased investment in energy efficiency and zero emission heating”.  Later in this parliamentary term, a new Housing Standard will be introduced which applies uniformly to all tenure types, to reduce the performance gap between social housing and the private sector.

Examples of our work in Scotland for Scottish Housing Day

Rather than waiting for the central government to act, there is much that Registered Social Landlords (RSLs), local authorities, and other housing providers can do to for the long-term sustainability of their organisations and their stock.  Recent projects undertaken in Scotland by Altair, ATFS and partner organisations demonstrate just some of the possibilities:

Collaborating with Falkirk Council to design a new process for carbon budgeting 

Altair, working in partnership with Carbon Change, helped Falkirk Council to measure their 2020/21 carbon footprint, before using this data to:

  • set the year 1 carbon budget,
  • forecast the annual emissions reductions needed to reach net zero, and
  • create an effective, streamlined framework for carbon budgeting across all council departments, which is already being trialled.

Altair and Carbon Change worked hard to develop a sense of organisational commitment, or “buy-in”, to carbon budgeting.  In the words of the client, “their professional and collaborative approach meant our internal teams were actively engaged to ensure momentum throughout the project and encourage council-wide ownership.”  As a result of this work, Falkirk Council now places equal emphasis on carbon budgeting as financial budgeting, putting them in a strong position to meet their carbon reduction targets for 2030. Click to view the full case study.

Supporting Albyn Housing Association to raise £15m in funding

Albyn HA hired ATFS to provide treasury advice and assist in raising long-term funding to support its development and asset investment programmes.  After conducting a thorough review of the existing loan portfolio, financial experts from ATFS developed a funding strategy.  They invited proposals from lenders and then carried out a comprehensive review of the indicative terms, including tenor, pricing, financial covenants, asset cover requirements and other conditions.  This enabled ATFS to recommend a preferred lender to the Board of Albyn HA, which was able to offer a very competitive £59m restructured loan package that included a £15m 25-year term loan facility, as well as a £10m revolving credit facility which will provide liquidity throughout the development programme.  The package also included an ESG (Environmental, Social, and Governance) option, whereby a further discount on pricing will be offered upon Albyn HA meeting specific ESG parameters.

Conducting resident and stakeholder engagement to help Scottish Borders Council develop its next Local Housing Strategy

Customer engagement experts from Altair have recently been gathering and analysing local and stakeholder perspectives on the Scottish Borders Council’s upcoming Local Housing Strategy, which places a big focus on improving the energy efficiency and build quality of housing stock, as well as other issues such as homelessness, housing supply, planning, and the provision of care homes.  After conducting a series of quantitative surveys, Altair led a number of virtual discussion workshops open to the public and housing sector specialists.  This type of public engagement is vital to ensuring that housing policy is responsive to local needs.

Transforming the IT service and Digital Strategy of Berwickshire Housing Association

Altair conducted a comprehensive review of the existing IT service used by Berwickshire HA.  Leveraging their extensive knowledge of the housing sector’s digital landscape, technical specialists from Altair identified areas for improvement and recommended suitable changes in IT system usage.  In the words of the client: “As a result of the engagement, our IT systems are in a much more stable and secure position, mobile working has been further enabled for our customer-facing colleagues, and we have a clear road map and ambition for how IT and Digital can support BHA’s ambitions moving forward.”

Written by Patrick Goldie, based in Scotland.

To learn more about how we can support your organisation, please contact info@altairltd.co.uk

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