The Great British Energy Swindle
Gambling with the future of our homes, streets and neighbourhoods.
This piece was co-authored by members of the Dark Matter Labs and CIVIC SQUARE teams to build upon the ideas explored at Retrofit Reimagined, a four day neighbourhood festival that took place 13th — 16th July 2022 in Ladywood, an inner-city neighbourhood in Birmingham, UK. Retrofit Reimagined brought together neighbours, practitioners, and organisers from across the country who are focused on retrofit, its role in the future of decarbonising our built environment and a just transition. The festival was hosted in partnership between ACAN, CIVIC SQUARE, Dark Matter Labs and zero carbon house.
This is the first of three blogs as part of the Retrofit Reimagined series. In this introductory blog we set out how the recent Energy Price Guarantee is a reflection of long-term systemic failures to invest, regulate and focus on our homes as essential infrastructure. Our second blog will unpack what we’ve learned together so far, amounting to a call for a Public-Civic Partnerships approach to the transition of our Homes, Streets and Neighbourhoods. Our final blog will outline our idea for a ‘Street Demonstrator’ that shows the possibilities of a Public-Civic Partnership and how it can respond to the age of poly-crisis.
Written in October 2022, this blog reflects our progress, learning and insights at that time.
If a long form read doesn’t suit how you would like to engage, here are a few shortcuts to different forms of media to explore the topics raised here:
Retrofit Reimagined Festival: Video Playlist — July 2022
The Great Energy Gamble: Visual Slides — October 2022
Estimated Read Time: 14 mins
The cascading impacts of the energy crisis in the midst of climate breakdown are converging on our homes, streets and neighbourhoods, affecting every aspect of our lives — from food prices, material prices, logistics resilience, and our collective wellbeing. How we live, and how we live together, is changing and will change radically over the coming years. This cascading reality demands a deep transition in how we live — in combination of material, energy-conscious futures and a new landscape of healing homes, streets and neighbourhood.
This is not a crisis that can be addressed individually, at the level of our homes alone. Nor can it be resolved through imposed and enforced top down solutions. It requires both civic organising and infrastructure, nested at the level of the street, neighbourhood and the city, alongside new state intervention at the scale of establishing the National Health Service or seeding the Social Housing Movement. This future requires a new Public-Civic Partnership.
Short Term Shocks & Long Term Trends
The UK is undergoing the biggest reduction in living standards since the Second World War with high levels of inflation, underinvestment in public services and growing inequality. The recent turbulence in financial markets is the latest in a series of long term trends: the ongoing downward valuation of the pound; increasing levels of government debt and rising costs of food and energy (even before the war in Ukraine); and extreme weather associated with climate change. We find ourselves in a polycrisis — where multiple globalised systems become entangled in ways that have cascading impacts on our lives and the natural world we rely on.
Amongst the economic, political and emotional tumult of the past few weeks, it is easy to lose track of the fact that a large part of the immediate cause of unrest in financial markets is the UK government’s decision to both cut taxes and commit an estimated £100–150bn of taxpayers’ money to fund an Energy Price Guarantee at the same time. The Guarantee will pay energy companies the difference between the wholesale energy market price and a maximum energy unit charge. This is perhaps the single biggest government spending announcement of the past few decades.
Clearly an emergency response was needed due to previous lack of bold action. Domestic electricity costs are pegged to gas prices which have been rising for some time and have spiked during Russia’s invasion of Ukraine. But the structure of the Energy Price Guarantee represents a huge transfer of wealth (amongst other subsidies) to the fossil fuel industry from the public purse — a sector that has historically been responsible for creating the climate emergency and one that has funded climate change denialism for decades. The approach is regressive and poorly targeted with those in the largest houses typically getting the most benefit and those already under-heating their homes standing to gain the least. The structure of the Guarantee also does little to incentivise energy saving and could make other approaches to funding energy efficiency harder to implement.
Because the Guarantee is funded by government borrowing against future tax income in a period of rising interest rates, it represents a massive financial cost on future generations already burdened by the climate crisis and decades of under-investment.
The cost of the Guarantee is in effect uncapped, but current estimates put it in the same ballpark as the Banking Bailout of 2008/09 but, unlike in the bailout, this time the UK state won’t get any of this back in the future. The costs to the taxpayer will only stop increasing if the wholesale price of energy reduces (a factor largely beyond the control of the UK), if the government withdraws the support, or if there is fundamental market reform. And it does nothing to encourage retrofitting of homes which is a requirement for any path to net zero.
This Energy Price Guarantee is therefore a guarantee for fossil fuel companies, but also a massive gamble for current and future taxpayers more broadly. By not investing strategically in effective deep retrofit and neighbourhood resilience, we are gambling with our own prospects for a brighter future and perhaps equally critical, our ability to address the cascading impact of the energy crisis that are part of a wider polycrisis in the midst of climate breakdown.
How Did We Get Here?
We believe, this polycrisis is converging in our homes, streets, neighbourhoods and cities — and solutions needs to born there. It is a crisis not just of energy, but of materiality, of economic capacity, imagination and social resilience, affecting every part of our lives.
As a society we have failed to invest effectively in our homes and neighbourhoods. At the heart of this lies the challenge and opportunity of retrofit — improving the fabric of our homes to make them more comfortable, healthier and able to use less energy. CIVIC SQUARE and Dark Matter Labs, in partnership with Thirty Percy Foundation and Lankelly Chase, have been working together around retrofit for the past two years, understanding the barriers and exploring its potential at a neighbourhood and city scale. We have found that retrofit is linked to a wide range of positive outcomes that are not currently reflected in how it is being organised, financed or governed.
In the UK, political decisions were taken to reduce funding that led to a cut in rates of retrofit and insulation by around 95% compared to 2012. Yet, the issue lies as much with a fundamentally flawed delivery model as with the low level of financial investment. Currently only households that meet very strict criteria may be eligible for measures to be installed at rock bottom rates, typically by centrally procured contractors. Outcomes are mixed. For example, despite costing over £1bn a year, only 57% of recipients for grant-based insulation measures under one programme reported receiving some or significant benefits from the measures installed. In any case, most of the easiest measures have now been done, and a more holistic approach to improving our homes is required.
“Home is no place for profit.”
— Araceli Carmargo, Centric Lab
And what about the four fifths of households who don’t qualify or don’t live in a socially rented home with a responsible landlord? Apart from some high level advice and guidance, there is almost no support. A recent attempt to build a debt-funded approach for homeowners to implementation didn’t deliver and was scrapped.
As a country, we have mistakenly assumed that the way to deliver on our retrofitting needs is to enable individual action through market-based solutions, supported by extractive labour practices through standardised measures dictated by Whitehall. It relies on low cost single-use materials mainly made with, or using, fossil fuels, and simply isn’t fit for purpose.
Retrofit Reimagined
With the above backdrop, and green shoots of hopeful, holistic and systemic practice emerging across the country. In July 2022 as a partnership Dark Matters Labs, CIVIC SQUARE, zero carbon house, and ACAN hosted a coalescence of people and organisations in Ladywood — the neighbourhood that CIVIC SQUARE is proud to call home in inner city Birmingham, UK. Retrofit Reimagined was designed to bring together people from across the neighbourhood and wider field who were interested in reimagining retrofit and convened around the core question:
What if the climate transition and retrofit of our homes, streets and neighbourhoods were designed, owned and governed by the people who live there?
“With Retrofit Reimagined, architects were seen as valued members of communities first and that positioning amongst a plurality of voices and professions was a worthwhile reframing for everyone’s role in the climate emergency.”
— Sara Edmonds, ACAN
https://www.architectscan.org/post/report-from-retrofit-reimagined-2022
Here we heard from a whole range of people both from the built environment, and beyond technical experts, community organisers, architects, financiers, policy makers, philanthropists, activists, citizens and many others. From ideas around the foundational healing justice role of the place we call home to how we redesign the finance to go beyond a top down house by house approach. The attendance and feedback from across many spaces, experiences, and vantage points reoriented our collective goals away from merely an individual technical challenge, and towards a important and unique moment to invest and organise in a way towards retrofit as a moment of deep societal renewal, the scale which could be likened to the founding of the NHS, or seeding of the social housing movement. This wide spectrum of voices and perspectives showed that there is deep and broad support for civic and community-led retrofit, but few clear pathways that overcome the major barriers we face.
What emerged was a consensus that retrofit is not just a technical exercise in optimising energy use or carbon emissions for each individual household, but a process of establishing a deeper relationship between residents, the homes they live in, the co-benefits possible and the communities they are part of in a way that supports mutual aid and social justice. Where talk of low demand and interest from communities for retrofit is loud in the national rhetoric, our work in Ladywood, the mix of participants at Retrofit Reimagined, the pioneering work happening across the country shows this story to be far from true. Our neighbourhoods are brimming with energy, insight, will, openness, imagination and deep hope. Our current organising, governance, and finance frameworks, or vision for national retrofit, aren’t close to unlocking this deep dividend.
Retrofit Reimagined was a demonstration of how convening and organising as a collective can broaden our incentive structures towards common goods and public-civic value — from investment in houses, to investment in places and the systems they depend on.
Whilst our national approach may be moving at a glacial pace, there are green shoots already demonstrating more equitable ways forward, generating hope, moving loudly and at pace. Collective and area-based models are starting to replace the piecemeal approach of consumer-led retrofit. Approaches like these that retrofit the home as part of a larger urban system must take priority, from the scale of the street to the social housing block. Providers are starting to develop one stop shops and services, neighbourhood labs and campaigns are ramping up the pressure for new models, and there is lots to draw energy and inspiration from.
Explore the Retrofit Reimagined video playlist to watch back the talks from the event, and find out more about how connect with those incredible practitioners we were honoured to have involved in this first festival.
“By prioritising community and care with programming, participation and production the festival felt revolutionary in comparison to the staid circuit of architecture events we’ve gotten used to and exactly what we need more of in a climate emergency.”
— Bobby Jewell, Architecture Today
https://architecturetoday.co.uk/retrofit-reimagined-festival/
The Expanding Sense Of Crisis
Since July, the cost of living and specifically energy costs have dramatically taken centre stage in our national political debate and in households and streets up and down the country. Strategic underinvestment, a broken market and failing regulations have and are increasingly tipping millions of households into real hardship, and making otherwise viable businesses fail through no fault of their own.
Most other countries and commentators have come up with better solutions that are implementable, for example, a universal basic energy allowance supplemented by changes to the benefits system, changes to the energy market structure and regulation. There are multiple variations where energy tariffs are stepped, with low energy users paying less per unit of gas or electricity than those who may use much more. The Labour Party has announced that, if elected, they would establish a publicly owned energy company alongside a major uplift in investment in insulation and a decarbonisation of the grid.
These policy responses are welcome, but the question of how best to deliver them over the coming years remains unanswered. Simply providing more resources in the form of short-term, nationally mandated, single-measure grant programmes using existing procurement approaches will not lead to the long term, increased local resilience that we need. We need to reimagine how to reconfigure the approach to unlock and augment the latent energy and capacity of the civic sector, and to realise the cascading benefits of doing so.
A New Pathway For Safe, Just Neighbourhood Transitions
So, what did we learn through the Retrofit Reimagined enquiry so far that can be applied to the situation we now find ourselves in? What would a different path look like that would be regenerative, progressive and long-term? How would this support building long term resilience, a green economy and energy independence?
Imagine if we allocated the £150bn set aside for the Energy Price Guarantee to support locally-led, place-based retrofit programmes. Imagine if they supported local training, low-cost or free home upgrades, and were designed to circulate money into the local economy, help build community pride and strength, while also generating massive positive impacts in health and wellbeing. There is strong evidence that a tailored approach would create major benefits and help to support the wider transition beyond retrofit by building distributed capacity and capability across our neighbourhoods, regions and nations. Another way to put it, is imagine spending tens of billions, for something that creates no improvements to energy security, housing quality or carbon pollution, whilst also barely lifting the most vulnerable out of deep crisis.
That is why we are calling for a new national energy and retrofit programme that draws upon the power of the state as well as the power of our streets and neighbourhoods. We need these Public-Civic Partnerships to not only deliver our collective retrofitting needs, but for citizens to become stewards of their local transitions towards fairer, greener futures.
The Retrofit Reimagined blog series will continue with part two: A Better Way To Spend £150bn, to follow shortly, describing a new approach to investment in our homes and neighbourhoods through a long term restructuring of how the state and civic society work together, through a new Public-Civic Partnership.
