A cost-effective way of insulating solid wall homes in the Fens and north-west Norfolk.

Fenland District Council, in partnership with King's Lynn & West Norfolk Borough Council and a home improvement agency, has been managing an External Solid Wall Insulation pilot project for private sector housing. An objective was to see what efficiency savings could be achieved by procuring works on a relatively large scale, rather than for individual properties. From the outset it was designed so that lessons would be learnt about running such a project, so these could be shared with other authorities across the region.

The challenge

A high proportion of the housing stock in this area was solid walled – 29% in Fenland and 31% in King's Lynn & West Norfolk. These had a low thermal efficiency; up to 35% of heat is lost through the walls in this type of building. National policy initially focused on reducing CO2 emissions from new build housing, but it became apparent that the main issue was with existing stock. Moreover, the concern in Fenland was not social housing, which after a stock transfer had received significant investment to bring it above the Decent Homes Standard. It was with some private sector stock, including certain Right-to-Buy properties sold prior to the stock transfer.

Existing grant mechanisms to improve insulation in private housing were insufficient to cover the complexity and cost of works needed with solid walled housing. There was, therefore, a higher risk of fuel poverty amongst households owning these properties. The challenge was to design an approach for tackling the issue which would achieve cost-efficiencies with any public sector investment used.

The response

In 2008 Fenland District Council submitted a successful joint bid, along with King's Lynn & West Norfolk Borough Council and that borough's Care & Repair Home Improvement Agency, for funding from the Regional Housing Pot in the East of England. This was to fund an External Solid Wall Insulation (SWI) pilot project, which was expected to run for two years.

The idea was to use external insulation to tackle hard-to-treat solid wall properties and to do so in a way which brought down the unit cost. This would be achieved by having a single procurement contract for works undertaken across the two district council areas, instead of dealing with homes on an individual basis.

Care & Repair, which is a home improvement agency operating in these districts, undertakes the client liaison and administration. It visits applicant households, checks their eligibility, completes the paperwork and handles any queries. Fenland District Council procured the supplier for the installation works. That private sector input means the project has been able to tap into additional funding from the CERT scheme.

Within Fenland district the highest levels of unfit private sector housing and a large share of vulnerable households were to be found in the deprived rural area in-and-around Wisbech and Waterlees, which had been designated as a Rural Neighbourhood Management Pathfinder. The project, therefore, initially targeted that area (and a designated area in neighbouring King's Lynn & West Norfolk). Applications were open to all those living in hard-to-treat private sector homes who met the low income 'vulnerable households' definition i.e. those in receipt of specified income or disability benefits. As noted below, the geographic targeting was altered after the first year.

Payments to households – which were each 75% grant and 25% loan1 – were made to cover the cost of fitting the insulating product to their external walls. When Care & Repair visited applicants' homes they also assessed them for other Warmfront or CERT energy efficiency works which would bring them up to current building regulation standards. Indeed, in appropriate cases home owners were offered other types of assistance by Care & Repair, such as checking their benefit take-up.

Advantages of the external insulation approach include minimal disruption during works and there being no impact on the internal living space. It also helps to protect the fabric of the property. Insulation works are supervised and signed off by the Council's Property Services Team. They should require little maintenance, but in any case both products and installation work come with a lengthy guarantee (which would satisfy mortgage companies).

Benefits and outcomes

The pilot was extended to last for three years (for reasons explained below), so a final assessment of the benefits and lessons is yet to be conducted. However, the last monitoring report forecast that treatment works would be completed on 47 properties.

All of the treated properties will have reached the Decent Homes Standard. Data collected during the first two years of the pilot show the average energy efficiency level or SAP rating of the properties prior to installation of external wall insulation was low, at around 50. The work undertaken, on average, has raised that level to SAP 66 which is the optimum standard achievable in the targeted housing.

It is estimated that the carbon reduction per property has been about 1,150 kg per year. So the whole pilot should reduce carbon emissions by around 50,000 kg per year.

In addition to the external wall insulation a considerable amount of other assistance was provided to clients of the pilot, much of it to help them address wider disrepair issues with their homes.

It will only be possible to measure the impact on fuel poverty when the benefiting households have a year's worth of energy bills since the insulation work was undertaken. Nonetheless, early feedback from those households is very positive about the extra warmth. The aesthetic look of the external insulation has also attracted much positive comment.

The extent to which an area-wide procurement approach has achieved financial savings is yet to be properly analysed. It appears that issues which arose during the pilot have reduced the expected level of savings, though the learning gained about those issues should make it possible to generate greater efficiencies in future.

Resources used

The External SWI pilot project has accessed just over £1.1 million from the Regional Housing Pot for the East of England. This money initially came from the Regional Assembly, but now resides with the East of England Local Government Association. In the event, the funding has been drawn down over the three years from 2009/10 to 2011/12.

An additional £0.8 million or thereabouts of match-funding has come from the two district councils or from the CERT and Warmfront schemes, bringing the total budget for the pilot to £1.9 million. Some £20,000 of this was set aside to promote the project to householders.

Separate funding has been won for related works which were needed to bring ex-Council properties up to the Decent Homes Standard, though this is not accounted for within the SWI pilot.

It means that the cost of external solid wall insulation to reach the Decent Homes Standard has averaged around £14,000 per property (excluding project on-costs), compared with an average of £8,000 estimated at the commencement of the scheme.

Lessons for others

There have been two monitoring reports detailing 'lessons learnt" and a final report will be produced in 2013. These have been a key element, the idea being to see how such a scheme could best be designed and managed in future.

Early attempts to market the grants to households in the target areas were not very successful. Banners and local radio adverts were least useful. Direct marketing (leafleting) performed slightly better. However, the real "breakthrough" came with local newspaper coverage, which featured customer case studies. Enquiries then increased so quickly that no further marketing was needed in Fenland. External insulation is not well known and considerable effort to raise awareness is needed.

At the application stage many potential clients proved unable to say what proportion of their expenditure went on energy. This mattered because baseline data was needed to measure the cost savings for the assisted households. Rapidly rising fuel prices during the project lifetime have made such an assessment harder still. Any future schemes might address this by putting in place resources to work with the assisted households and utility companies so they can gain accurate data about energy spend and price increases.

The project also demonstrated that external wall insulation, whilst certainly important, was not enough on its own to bring the properties up to the SAP target level (65). In most cases some additional measures were needed, such as providing more efficient domestic heating systems.

Various technical issues were identified and resolved during the course of the pilot. These included: that certain external insulation products cannot be applied during cold weather; that property boundary/neighbour issues must be identified and resolved before work starts; and that prior building surveys must be thorough so any structural defects with implications for the works are spotted. Issues, such as these, added time and costs.

In the event the pilot project ran for three years and it was opened up to eligible households across the whole geography of the two districts.

Rural Services Network case study

Written May 2012