By Jon Daley

Ladies and gentlemen of the jury, we’re facing a crisis of untold proportion. The culprit that we see before us is in the form of the cost-of-living crisis. According to ONS figures, nine in 10 adults believe that this is the most important issue we face today in the country. To put this in perspective, the NHS, our crown jewel within health and welfare, is eight out of 10 in the same field according to the same source. But why is this? Why is the cost of living such a big issue and why should it matter to our sector at a time when we have multiple agenda items that may be seen just as if not more important as others?

My name is Jon Daley, Asset Sustainability & Data Manager for Magenta Living, and today I will be your advocate for all things green. I will prove beyond reasonable doubt this morning that there’s a case to put forward to each and every person here: the case is for long-term sustainability projects against this heinous burden sitting opposite us known as the cost-of-living crisis. I believe it comes down to six key points: income, fuel poverty, funds, skills, corroborating projects and, of course, residents.

Income – ladies and gentlemen of the jury, my opening gambit as your green advocate is to ask yourself right here right now: who do we serve? Think not about your ‘stock’ and ‘assets’ and think of the most important asset of them all: the ones who live inside your homes; those that make the best of their lives; the ones who make your organisations sustainable via rental income amongst other things.

You see, residents are our most important assets, the jewel in our crown, our lifeblood as it were, and if it weren’t for them, we wouldn’t have organisations, a sector and, most importantly, a purpose. Quoting welfare state founder William Beveridge, social housing was one of the entities that protected against the five giants of want, disease, ignorance, squalor and idleness, in that we as a sector keep alive that protection today. We know that we help all walks of society, in that we help those who can contribute as well as those who are most vulnerable. As measured by the ONS in 2018, around 30% of all new social housing lettings are given to vulnerable households with a priority need (inclusive of homelessness, hardship, unsanitary environments or overcrowded homes).

Whilst numerous current and historical figures have attempted to secure an ideal for the UK as a ‘nation of homeowners’, we’re seeing hardship at an unprecedented level, to the point where terms like ‘heat or eat’ are becoming national slogans. But is homeownership realistic in our first point that’s all around income? The answer is ‘no’. The average house price in the UK as of November 2022 is £294,910, in which if a standard deposit of 10% is needed, that would equate to near £30,000, not taking account of inflation, may I add.

Whilst we’re proud of our work here at Magenta Living, we know that we work with some of the most deprived neighbourhoods in which some of our hardest-hit households have an average income of just over £17,000 a year but live in our properties till well past retirement age (not inclusive of the greying population issue). With these in mind, ladies and gentlemen of the jury, we have to protect our most important asset in our residents. We must make decisions of investing in homes to give our residents a sense of place over time or to generate new ones that will last longer than previously thought in order to aspire to sustainable communities, as well as guarantee future sustainable income for the services we provide.

Energy costs / fuel poverty – related to this is another burden, one that, personally, is the reason I get out of bed every morning, jury members, and that’s fuel poverty. Would anyone in the audience like to guess what percentage of people are currently in fuel poverty? As of Feb 22, it was 13.2% – that works out around 3.16m households in fuel poverty. Now, whilst that sounds like a low number, that doesn’t take account of recent energy cost rises. Whilst we’ve seen a fuel cap price for a standard home of around £2,500 a year (for an average home, may I add), we’ve seen gas prices rise long term (10 years) by 128.9% whilst electricity has increased by 65.4%. I’d make the argument that the high cost of energy has not been a recent issue one but a long-term one that will continue to worsen unless we take proactive action. This has also been exacerbated by my first point, ladies and gents, that with lower income, this is only adding to the aggregate fuel poverty gap of around £223/household, or in real terms £726m/year nationally.

Likewise, the figure I gave of 13.2% of households in the UK is representative of a national average. I’d ask everyone here: do you know your local fuel poverty metrics, as it will differ from those at a national level? For instance, at Magenta Living some of our neighbourhoods have the highest amount of fuel poverty in the country, with our highest being between Central Birkenhead and Northend – both of which have near DOUBLE the national average. It’s pretty scary to think that there could be so much variance in this story when you look at it from a local level and, of course, at the residents that we take care of.

Furthermore, whilst this is crazy to think about, what does this mean for sustainability and investment? Official statistics show that six in 10 adults are using less fuel in the winter, with 21% saying they were occasionally, hardly ever or never able to keep comfortably warm in the home in the past two weeks. Investment in this case is less about the financial (although it’s a factor) and more about the health element. Fuel poverty is estimated to cause nearly half of excess winter deaths (around 14,000), according to NICE, NCC and the NHS, with real world data from IoT companies showing homes causing respiratory problems below 15C, circulatory problems below 13C and hypothermia risk below 6C. As said before, nearly a third of our new resident lettings are given to vulnerable households with a priority need (homeless, medical, hardship) in which not investing in sustainable homes long term would effectively cause further illness.

With housing and health becoming more and more linked, as we explore sustainability, there’s also an opportunity to look at this long term in saving larger governmental spends on the NHS inclusive of both direct causes (with cold homes costing £1.4bn a year) and indirect causes (with air quality exacerbation projecting to cost £5.3bn to 2030). There’s no case NOT to divest in long-term sustainable projects for the health of our residents.

Funds – whilst this is so, it’s become apparent through organisational business plans, sector plans and official studies that there’s a need for additional funding in order to invest to achieve our net-zero aspirations. Savills says the sector needs around £100bn to hit its 2050 goals, with other sources quoting up to double that due to market rates. We’ve started to make headways with political pressure and policy movements as a sector, which has seen, since the turn of the decade, schemes such as the Social Housing Decarbonisation Fund, the extension of the Energy Company Obligation, the Green Homes Grant and the Home Upgrade Grant.

All of these funds require co-funding or have been designed to stimulate further thought as a sector and not to be a silver bullet for our investment ideas, although they have good intentions. For instance, whilst the Social Housing Decarbonisation Fund has increased funding allocations from its £61m Demonstrator to its £179m Wave 1 and upcoming £800m Wave 2, it’s spread so thinly and at lower levels BY DESIGN not by choice at a time when market rates are becoming higher, and the cost of living is becoming harder.

To quote modern day culture icon Joe Rogan, the harsh truth is that, currently, policy wise “no one is coming to save us” and that ultimately we have to “be the heroes of our own movies”. Whilst we have to be mindful of business plans, refinancing and organisational sustainability, we must as a sector aspire to keep our stock and serve our residents for the right reasons. Whilst challenging at times, we have to remember what expenditure means culturally. It’s an investment and not an overhead that will benefit our residents long term in terms of better living experience, which in theory would be recompensed via NPV analysis, rental income and, of course, sustainable tenancies.

Skills/jobs/partnerships – but whilst I say that there’s a need to spend, is there a way we can be intelligent about our spend, and what’s making spend so high? Can we make spend in itself sustainable? The answer I put to you today, ladies and gents, is ‘yes’ – and it’s through skills and jobs. One of our leading voices in the sector, David Pierpoint, who will be speaking later, has been quoted consistently for a need of sufficient skills in both installation and project management via PAS2035.

Both of these workstreams need in excess of 200,000 competent professionals just from his organisation the Retrofit Academy. Whilst we’re seeing an increase in projects and need for a workforce, we’re still seeing prices high for these services due to demand. According to Checkatrade, average rates for retrofit assessments are over double an EPC certification; likewise, retrofit project management is around £1,000 for the project, and popular forms of insulation such as EWI ranges anywhere from £15,000-£50,000 due to a lack of installers and building costs.

Not only is there a case for increasing supply to match demand at a lower cost through creation of skills and apprenticeships, new and sustainable jobs with an accessible workforce can be obtained, longer-term partnerships between contractors and academic institutions can be forged and, of course, a more sustainable way of working that alleviates cost over time by doing projects in house and to standard. This, however, can only be done with one mindset: long term. The more projects we can create and invest in, the more resident impact we can have over generations to 2050 and beyond.

Corroborating projects – with these benefits in mind, we must remember that this approach also creates benefits for other areas such as damp and mould. You see, ladies and gentlemen of the jury, housing in itself is not in a vacuum and we’re seeing the need for more and more holistic thinking in our solutions, which could also share both resources and welcome outcomes. As we know, recently the regulator has written to all social landlords asking for all to give assurance on addressing risks around damp and mould.

The Centre for Sustainable Energy breaks down how damp and mould is actually caused. It’s usually by poor ventilation, condensation, inadequate heating and resident behaviour. Notice that three of those four, ventilation, condensation and inadequate heating, are usually asset management issues that link towards investment, in which we’re starting to see housing associations take massive action. As an example, Clarion have committed to spend another £5m a year to deliver its damp and mould action plan, which includes investments in IoT equipment and visits by specialist teams, all of which corroborate with sustainability issues both short and long term as they usually end up in increasing insulation with ventilation as well as heating sources that also help with the cost of living. What I’m saying here, ladies and gentlemen, is that some projects are literally two sides of the same coin and by utilising a holistic mindset you can jointly solve issues over the long term as opposed to looking at it from two different perspectives.

Residents – but whilst this is so, our most important assets of all, our residents, are also a cause for concern within the holistic sphere of sustainability. It’s been proven that 20% of all energy usage and resource-driven activity is caused by our lifeblood itself: our residents and how they utilise behaviour.

As an example of this, over £2bn is spent each year on electrical goods. That has turned into excessive usage and costings on bills. Whilst there are both new and existing advertising for advice such as ‘Help for Households’ and an upcoming £18m energy information advice programme, we must take it on ourselves to be proactive in not just retrofitting the home for long-term advantage, but also to retrofit the resident.

Special roles within retrofit project management have been created for funded works in the form of PAS2035 retrofit advisers, resident engagement has never been more important in delivering works and even aftercare of contractors with residents inclusive of education is on EVERYONE’s contractor specifications. You see, to tackle the whole problem, we will need people power for our residents as it goes hand in hand with our physical homes, otherwise we will only ever tackle 80% of the problem – and 80% is never a whole solution.

In summary, and to end my opening gambit, it’s pretty simple. We’re currently at a hard time in our sector. Incomes are lower than ever, fuel poverty is at an all time high and corroborating factors are causing many issues both throughout this crisis and the long term. But, as the adage goes, hard times create hard people and hard people have the ability to create good times. It’s up to every one here, each and every single colleague, every single leader and every single friend, to face this hard time head on and remember why we do it.

Crises come and go; however, the striving for sustainability within our sector must be central to what we do, otherwise you need to ask you yourself: what is your purpose of being here today?

If you ask me, ladies and gentlemen of the jury, change is coming whether you like it or not, but it’s up to us how we see this change. Do we see it as a challenge or as an opportunity? For me, it’s always an opportunity. An opportunity to be ambitious, accountable and adaptable in the mission towards sustainably vibrant homes, sustainably vibrant neighbourhoods and, most of all, sustainably vibrant lives.

The defence rests, your honour.