Around 50 per cent of heat network customers in the UK are living in social housing , including council housing. It is critical that councils’ experiences and concerns about heat networks are taken fully into account as regulation is developed to make sure it works for those it is trying to support.
About the Local Government Association (LGA)
The Local Government Association (LGA) is the national voice of local government. We are a politically led, cross party membership organisation, representing councils from England and Wales.
Our role is to support, promote and improve local government, and raise national awareness of the work of councils. Our ultimate ambition is to support councils to deliver local solutions to national problems.
Consultation
As housing providers with social objectives, councils strongly welcome and support the principles of consumer protection, especially for their constituents living on heat networks managed by others where protections to date have in some cases been poorer than we would like to see.
Around 50 per cent of heat network customers in the UK are living in social housing, including council housing. It is critical that councils’ experiences and concerns about heat networks are taken fully into account as regulation is developed to make sure it works for those it is trying to support.
We would welcome the opportunity to work closely with DESNZ and Ofgem to raise awareness of the proposed regulations amongst the local authority housing sector. The proposed regulations represent a significant shift in the way heat networks are operated and will create additional financial and administrative burdens for local authority housing providers who run heat networks. This is particularly challenging at present given cost of living and inflationary pressures impacting Housing Revenue Accounts (HRA).
It is critical that DESNZ and Ofgem undertake further, sector-specific engagement ahead of regulation to raise awareness amongst the sector and to ensure the sector’s experiences and concerns about heat networks are considered as regulation is developed. This will ensure the proposed regulations work for registered local authority providers of social housing. We have been collaborating with The Heat Network and the National Housing Federation to amplify messaging across the social housing sector. We welcome all opportunities to engage directly with DESNZ and Ofgem.
Social housing is already regulated by the Regulator of Social Housing. It is critical that the heat network regulations compliment the ways in which councils are already evidencing consumer protection, and not create additional administrative burdens.
As a rule, councils run their heat networks on a not-for-profit basis. All the (very significant) costs of regulation will have to be passed through to the tenant in addition to any compensation payments. The alternative is that schemes will be run at a loss, which is not sustainable.
In most cases, councils do not have heat network teams. Responsibility for heat networks is often a small part of one person’s job, with different aspects dispersed across the council. The proposed timescales for implementation are short, and many councils are not equipped to respond to the proposed requirements. We need as much clarity as possible as soon as possible, especially for new heat networks which will require pre-authorisation ahead of the initial period, which is expected to be no more than one year from the commencement of the regulations.
Awareness of the regulations is still low in the housing sector and those who do know, often don’t appreciate the amount of work that will be required. Councils need a proportionate approach, reasonable timeframes, clear guidelines, and support. More needs to be done to streamline the process for social housing providers and enable us to ‘fast track’ some elements due to councils’ obligations under the Regulator of Social Housing.