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Session 2001- 02 Publications on the internet Other Bills before Parliament Arrangement of Clauses (Contents)

Home Energy Conservation Bill

These notes refer to the Home Energy Conservation Bill as introduced in the House of Commons on 18th July 2001 [Bill 11] HOME ENERGY CONSERVATION BILL EXPLANATORY NOTES INTRODUCTION 1.     These explanatory notes relate to the Home Energy Conservation Bill that is set down for Second Reading in the House of Commons on 30th October 2001. They have been prepared by the sponsor of the Bill, Dr Desmond Turner MP, in order to assist the reader of the Bill and to help inform debate on it. They do not form part of the Bill and have not been endorsed by Parliament. 2.     The notes need to be read in conjunction will the Bill. They are not, and are not meant to be, a comprehensive description of the Bill. So where a clause does not seem to require any explanation or comment, none is given. SUMMARY AND BACKGROUND 3.     The Bill has three Parts all of which are interlinked as explained below. The general theme and overall purpose of the Bill is to help ensure the provision of a decent and safe standard of accommodation for all citizens - and in a way that will also assist with the achievement of environmental targets. THE BILL 4.     Part 1 of the Bill concerns the Home Energy Conservation Act 1995 ('the 1995 Act'). That Act gave energy conservation authorities (i.e. district, metropolitan district, London Borough and unitary councils) the target of achieving a 30% improvement in energy efficiency in residential accommodation in their area within 10-15 years - or by 2010 at the latest. 5.     But for a number of reasons which the Bill seeks to address, the strong indications are that this target will not be met, as follows: The requirement to achieve the target is only contained in Ministerial guidance; it is not a firm statutory duty. [Bill 11-EN]     53/1 Energy conservation authorities do not have the powers to monitor the activities of other bodies (e.g. registered social landlords) in their areas. Energy conservation authorities do not have the powers to co-ordinate the activities of other bodies that may own a large amount of housing stock in their areas, and involve them in the achievement of the targets. There are, currently, few powers to deal with energy inefficiency in the private rented sector, and especially in houses in multiple occupation. The reporting system under the 1995 Act is widely recognised as being both inadequate and unsatisfactory. The purpose of the Bill is to address these issues. 6.      Part 2 of the Bill deals specifically with fuel poverty. Under the Warm Homes and Energy Conservation Act, 2000, the Government has to implement a strategy to end fuel poverty within 15 years. This can be hampered by a lack of co-ordinated activity between local and central government which the Bill seeks to rectify. 7.     Part 3 of the Bill deals with the licensing of houses in multiple occupation. It amends the Housing Act 1985 by redefining which properties are and are not houses in multiple occupation (HMOs). The current definition is widely accepted as inadequate as a result of various court cases. The Bill also specifies which HMOs need to be registered and which do not. Local authorities are given a discretionary power to require the registrations of HMOs not covered by the mandatory scheme mentioned above. 8.     The Bill sets up a two-stage process. The first stage is the notification stage: the setting up of the register of HMOs by local housing authorities. The second stage is the control stage - the requirement for certain specified HMOs to comply with minimum standards. This is to be introduced by Order within one year. The Order will contain detailed provisions of the registrations scheme (e.g. relating to the serving of notices, appeals, powers of the court, offences fines and powers of entry). 9.     The Bill does set down some of the matters that will be dealt with in the Order - the minimum standards required to be met by HMOs. These include the normal 'decent housing' standards and also the achievement of basic standards of energy efficiency. 10.     Because the link between HMOs and these other issues may not be clear, the reasons are set out below: The historical case for licensing HMOs has concentrated on health and safety issues such as the need to ensure fire safety, proper amenities, control of overcrowding and the achievement of good management. HMOs contain very high fire risks - for example adults in bedsit houses are 6 times more likely to die from fires than comparable single occupancy dwellings. Energy efficiency requirements are designed to give a benchmark for the quality of the building as living accommodation, and attaching them to the licensing scheme provides a mechanism for enforcement. Secondly, energy efficiency standards in HMOs are required if energy conservation authorities are to achieve the targets under Part 1 of this Bill. As indicated above, energy conservation authorities have virtually no powers in relation to energy efficiency in HMOs. Thirdly, the licensing of HMOs will assist in the eradication of fuel poverty. The Government's strategy has now been published: but as with local so with central government - there are few powers to ensure (as is the duty under the Warm Homes Act) that measures to insulate HMOs are actually carried out. A licensing scheme to require those measures to be taken will assist the implementation of the strategy. There is a requirement for a reduction in carbon dioxide emissions by the United Kingdom of twenty per cent by 2010, based on 1990 levels. The introduction of energy efficiency requirements in the licensing of HMOs is expected to contribute to the reduction of those emissions. COMMENTARY ON CLAUSES Part 1 Functions relating to the Home Energy Conservation Act 1995 11. Clause 1(1) makes the requirement to achieve the targets in the reports complied by energy conservation authorities pursuant to the 1995 Act a duty 'as far is as reasonably practicable.' This caveat is intended to cover situations where an authority really tries to reach the target but may fail to do so for genuine reasons - e.g. they may have taken extensive steps to persuade homeowners to insulate their homes which may have initially looked liked succeeding - but a recession might make people more worried about paying their mortgages than about insulating their homes. The clause also sets out some of the ways in which authorities might seek to achieve their target, by placing the authorities in the role of community leaders, enablers and monitors as well as performers. 12. Clause 1(2) gives the Secretary of State the power to make regulations requiring registered social landlords (RSLs) and the managers of government energy efficiency schemes to provide the authorities with information as to the effects of their activities. This will establish a standard reporting format in place of the current system which often requires these bodies to report to different authorities in different ways. 13. Clause 1(3) gives powers to energy conservation authorities in their co-ordinating role by giving them to power to require registered social landlords to help them with their strategies under the 1995 Act in situations of stock transfer. By requiring the RSLs to include this in their transfer arrangements the clause will enable them to implement the action agreed. 14. Clause 1(4) will give the Secretary of State to power to set up a proper reporting system, after consultation, based on agreed methods. 15. Clause 2 requires energy conservation authorities to identify a specific officer to take responsibility for their responsibilities under the 1995 Act. 16. Clause 3 gives the Secretary of State the power to take action in cases of serious default by an energy conservation authority. This clause complies with the principle that where there is a duty there must be a method of enforcement. Part 2 Functions Relating to Fuel Poverty 17. Clause 4 gives the Secretary of State the power to issue guidance as to how energy conservation authorities may carry out their functions under Part 1 of this Act and the 1995 Act in such a way as to assist with his strategy for ending fuel poverty under the Warm Homes and Energy Conservation Act 2000. The power can be exercised in two situations: - If the Secretary of State thinks it will assist him in delivering the strategy or If energy conservation authorities think it will help them. 18. Clause 4(3) requires energy conservation authorities to carry out their functions 'in accordance with' such guidance. The aim here is to achieve a balance between central government direction and unfettered freedom for local authorities. Part 3 Houses in Multiple Occupation (Registration Scheme) 19. Clause 5 replaces the current definition of a house in multiple occupation in section 345 of the Housing Act 1985 ('a house which is occupied by persons who do not form a single household') with 'a house which is occupied by adult members of more than two families'. Houses occupied by full-time students of further or higher education during term-time and bed and breakfast establishments providing temporary accommodation for homeless people are specifically covered by the definition, but the following classes of house are not: hospitals, nursing homes, care homes, boarding schools, prisons, bail hostels; buildings occupied by religious communities; jointly owned houses or flats; and blocks of self-contained flats. 20. Clause 6 replaces the current power of local housing authorities in section 346A of the Housing Act 1985 to make a registration scheme and maintain a register of houses in multiple occupation in their district with a duty to do so. 21. Clause 7 requires the Secretary of State, within a year of this Act receiving Royal Assent, to revoke by Order all registration schemes made under the Housing Act 1985 and require local housing authorities to replace these with registration schemes containing controls over energy efficiency, housing, fire safety and amenity standards. The clause specifies the requirements to be included in such schemes. 22. Clause 8 specifies the houses that must registered under Clause 7, namely those consisting of more than two storeys and accommodating more than four adults, unless they are managed by a registered social landlord or a local housing authority. The clause also provides local housing authorities with a discretionary power to register other houses in multiple occupation, which are specified. 23. The regulations that the Secretary of State will make under this Part are wide ranging, and so to enable Parliament to retain effective powers of scrutiny, they have been made subject to the affirmative procedure so that Hon Members will have the opportunity to debate them and vote on them. COMMENCEMENT DATE 24. It is intended that the Bill will come into force on a day or days to be appointed by the Secretary of State - but that that day shall be no later than one year after Royal Assent. Different days may be appointed for different sections of the Act. FINANCIAL EFFECTS 25. The Bill does not make new national policy but provides further means of seeking to ensure that matters which are already national policy can be met. Therefore it can be argued that the Bill will have little overall financial effect on public spending - and indeed, for the reasons explained below, may even result in less. 26. It is already Government policy to achieve the targets under the 1995 Act by 2010; to eradicate fuel poverty by 2010 and to reduce CO2 emissions by 20% by 2010 - so the achievement of those objectives will already be included in the government's long-term financial assessments. By streamlining action, cutting bureaucracy and bringing in additional non-public finance the effect of the Bill could save money in achieving these objectives. For instance: Energy conservation authorities currently waste time in trying to get information from some RSLs. The requirement to report will save them time and money. Conversely, those RSLs and government scheme managers that do currently report properly will be saved time and money by having a standard format. The new power given to energy conservation authorities to require RSLs that take over council housing stock to include measures to assist the authority should mean that additional non-public finance will be available to help achieve the energy efficiency improvement targets. Licensing of HMOs will mean that over a period of years those properties will be brought up to minimum standards of energy efficiency in such a way that landlords will be able to write this into their business forecasts. This will bring additional money into plans to achieve the objectives of increasing energy efficiency and ending fuel poverty. In the longer term this will also help landlords as it will mean that the value of their properties will increase. Licensing HMOs will also help local authorities and landlords financially by establishing one clear and concise regime for dealing with these properties. This will replace the current plethora of laws and schemes that waste the time of authorities and landlords alike. There is efficiency in greater simplicity and clarity. 27. The new statutory duty on energy conservation authorities to achieve the targets, and the requirement to identify an officer for that purpose will certainly require them to take the achievement of the targets more seriously. This will mean that those authorities that have already pioneered innovative and long term plans can use their experience to help others. 28. In the longer term, therefore, this will enable local authority treasurers and the Chancellor to rely on more such savings, and take them into account in their overall assessments. a)1.1.1.1.1.1.1.