Select Committee on Environmental Audit Minutes of Evidence


Memorandum submitted by Crest Nicholson

ENQUIRY ISSUES—WRITTEN ANSWERS TO QUESTIONS PROVIDED

1.   Additional question

How did Crest Nicholson achieve it leading position on sustainable development (CSR)

(PND)

  Crest Nicholson started to differentiate itself in the home building sector before 2000 with a business strategy that included core values of building communities, quality construction and high standards of customer service. ODPM Gold and Silver "Building for life awards" at flagship developments such as Ingress Park (Thames Gateway), Port Marine (Bristol) and Park Central (Birmingham) were the beginning of putting into practice the delivery of high quality, high volume, mixed use, viable community renewal developments. The Board established a Committee for Social Responsibility and Group Environment Manager position in 2002. A review of the social and environmental aspects of the company's activities, products and services was undertaken to create a relevant Sustainable Development policy. This policy allowed integration of social, economic and environmental aspects of the business into existing management practices or procedures from land buying through design and build to Sales and Marketing. Environmental and social performance data was collected and benchmarked. Strengths and weaknesses were identified. Improvements were made to increase performance on an annual basis. Our Corporate Responsibility report is published and verified annually following global and national guidelines.

A:  CODE OF SUSTAINABLE BUILDINGS (RP)

1.   Can a voluntary code possibly deliver the degree of change needed in the building industry to achieve well-designed, energy efficient sustainable buildings which have minimal impact on the local environment?

A1.

  R.P. Experience shows that voluntary sustainability measures are not generally implemented by the speculative housebuilding industry largely because of the need to maintain the levelness of the competition playing field throughout the process of change. It only responds reliably to mandatory legislation.

  A concern in this case is the degree to which the Code will be voluntary. The Government commitment is quoted as "From April 2006 all new housing receiving government funding will meet the new Code for Sustainable Buildings and we will encourage local authorities to apply similar standards to private houses."

  P.T. Promotion in the private house-building sector where Government funding is not involved will rely on voluntary participation in the hope that product differentiation, competition and marketing will convince house-builders to participate.

   The more enlightened house-builders who already consider sustainability and environmental policy at the core of their business will embrace the Code but it is hard to see a commitment from smaller or less enlightened house-builders where the Code will add additional cost (£608 per dwelling) to achieve even a one star rating. Often they are delivering price sensitive homes at the lower end of the market. There is more awareness of sustainability issues amongst the public but anecdotal evidence would suggest affordability for first time buyers is still more of an issue.

  Real change to achieve well designed, energy efficient sustainable homes would require mandatory compliance and it is difficult to see why this cannot be delivered through enhanced Building Regulations or Planning. Of the six essential elements four are already covered in part by Building Regulations, leaving site waste management and water. New Planning Policy Statements (PPS1, PPS3 and PPS22), Sec 106 agreements, Local Development Frameworks, Regional Spatial Strategy, Development Plans and Sustainable Checklists; a whole plethora of planning documentation and initiatives make reference to design codes and the delivery of sustainability. Planning authorities are already using their powers to invoke change. There is a contradictory message if the Code remains voluntary; the burden of regulation on house-builders is already there, there needs to be consolidation and clarity.

  It seems a pity when Ecohomes was establishing itself as the building industry standard for environmental labeling that a new Code for Sustainable buildings has been newly invented, especially when it remains voluntary. With Housing Corporation and English Partnerships amongst other agencies being directed to use the new Code it is hard to believe Ecohomes can survive beyond the transitory period after 2008.

2.   Is the Government doing enough to promote the Code, with the industry and the general public, ahead of its imminent introduction early 2006?

A2.

  R.P. A related reason why the industry has not conscientiously adopted voluntary sustainability measures is because customers are not generally prepared to pay for them. For them to become so there needs to be a much heightened public awareness of the crucial importance of sustainability issues, sufficient to justify the introduction of and payment for commendable but expensive mitigation measures.

  As far as the general public is concerned I do not think that the Government is doing enough either to raise the level of understanding of the problem or to promote the Code which is designed to address it.

  (It is possible however that as fuel prices rise to critical levels, market forces will do the job for it.)

  The industry is aware of the imminent introduction of the Code, and is currently considering a consultation paper for which the deadline for responses is 6 March 2006. The Code itself is due to take effect in April, which barely allows sufficient time for the consultation responses to be adequately considered before its introduction.

  This apart however, the promotion of the Code has so far raised a number of doubts and uncertainties which the ODPM should be doing more to resolve or eliminate, viz:

    —  The Building Regulations are a Statutory Instrument and Eco-Homes is steadily (albeit slowly) becoming the industry standard. In sustainability terms the Code broadly covers the same issues as they do, so how exactly will it relate to, complement, or replace them?

    —  The consultation paper for the Code acknowledges its debt to Eco-Homes upon which it has been closely modelled, although it will have a different name, structure and scoring system. Why? Wouldn't it be simpler to adapt the next issue of Eco-Homes to a suitable level? Why increase the confusion by introducing another document?

    —  How voluntary will the Code be? The consultation paper introduces significant ambiguities as follows;

    —  ". . . all new homes built by RSLs (or others) with Housing Corporation funding will comply with higher levels of the Code . . ."

    —  ". . . we will require new dwellings developed by these bodies to be at least as sustainable as the Eco-Homes Very Good standard, which means they will meet our level three."

    —  The Government will ". . . encourage local authorities to apply similar standards to private homes."

    —  "That does not mean however that we intend that building to meet Code standards should become a condition of planning consent."

    —  So, will LPAs be able to enforce compliance with the Code or not, and if so at what level?

  P.T. Within the industry there has been adequate consultation and awareness although the timescales are tight, the consultation period ends in March2006.

   Ecohome assessors were asked to comment on the document towards the end of 2005. It should be noted that the BRE organisation for Ecohome assessors will be re-trained in the use of the new Code. Training has not commenced yet the Code is to be rolled out and implemented in the early part of 2006.

  With regard to the general public there does not seem to be much promotion ahead of its imminent introduction. Any marketing differentiation strategy used by House-builders will rely on increased public awareness of the new Code and significance of the rating system. The roll out of the Home Information Packs in June 2007 seems to have had better promotion; the opportunity should not be missed to link levels of sustainability and energy efficiency between homes achieved by the new Code and the standards achieved by the second hand homes market.

3.   Should the Government be introducing fiscal measures to reward higher building quality and greater environmental performance?

A3. Yes

  R.P. There is already some ambiguity about the relationship between the Building Regulations and compliance with the Code at entry level, particularly if through planning the Code becomes effectively mandatory. Assuming (and suggesting) however that levels above entry compliance do remain voluntary, and given that the industry has hitherto been prepared to adopt mandatory measures only, the idea of fiscal incentives to reward higher attainment would seem well worth exploring.

  P.T. There is more of a case to introduce fiscal measures to reward higher building quality and greater environmental performance if the scheme is to remain voluntary. If it became mandatory there is less of a need unless it is an incentive to take dwellings beyond just a minimum standard. This could be reduced stamp duty rates for purchasers or reduction of company taxation for those companies willing to go beyond the minimum.

  Planning gain and Sec 106 agreements could be another area of reward, where the planning gain package could favour high levels of sustainability and lessen other contributions eg affordable housing, transport, etc.

  There should be the continuation and increase of subsidy and grant to assist in greater use of renewables when trying to attain carbon neutral homes (5star rating).

B:  SUSTAINABLE COMMUNITIES

4.   Does the ODPM Five Year Plan, Sustainable Communities: Homes for All demonstrate a greater recognition of, and greater commitment to tackling, the impact of increased house building on the environment or does it merely pay lip service to it?

PND

  The ODPM five year plan (Section on the Environment, Chapter 8) does not go into detail on how sustainable communities will be developed by joined up thinking. It refers to the Code for Sustainable Buildings which relies heavily only on one of the BRE rating tools, the BRE EcoHomes rating system, which deals mainly with the environmental aspects of homes. As new sustainable communities of the future will rely heavily on guidance/regulation linking each step in the whole development process then the code has an excellent opportunity to sit above and link up:

  Sustainable land buying/

  Land selection and planning—www.Sustainabilityworks.org.uk Housing Corporation;

BRE Sustainability check list

Regional variations of BRE checklist eg, SEEDA

Climate Change Partnership, Checklist for developers

  Architecture—Urban Design Code.

  Design—BRE EcoHomes + BREEAM for Offices + Retail + Hospitals etc.

  Specification—BRE EcoHomes + BREEAM for Offices + Retail + Hospitals etc.

  Supply chain—BRE EcoHomes + BREEAM for Offices + Retail + Hospitals etc.

  Build/construction—Constructing Excellence KPIs + DTI Waste Management plan.

  Sales and marketing—Creating sustainable home buyers and the markets.

  Customer care—Providing Home Information Pack (HIP) including SAP certificates (Energy efficiency of building notices), EcoHome certificates and sustainable life style manuals).

  Although there may be other excellent guidance/rating tools, their use should be made part of planning regulation/mandatory. In order to gain optimum sustainable development improvement they should be linked up through out the whole development process/cycle in order to create sustainable communities.

  Once their use is mandatory under the Building Code then the BRE (and/or others) could collect the data and benchmark annually to draw a baseline for improvement across the industry setting realistic and manageable targets.

5.   To what extent does the Five Year Plan address the environmental implications of the geographical distribution of demolition versus new build?

  The plan does not appear to "address the environmental implications of the geographical distribution of demolition versus new build" in detail.

  There may be a need for a more early strategic planning guide, under the new sustainable building code, going beyond the listed building grades, to aid developers and take into account relevant environmental criteria. The tool should be able to evaluate and balance the social, economic and environmental criteria of areas within a renewal or regeneration region for the most sustainable outcome being either renovation or demolition and rebuild.

C:  LPS2020

  6.  The Government has consulted on the new construction standard for dwellings (LPS2020). On the basis of that consultation is it possible to determine whether the new standard will be a positive force for change and add value to the construction process?

C6.

  R.P Innovative construction techniques offer a key mechanism to shorten constuction times and by so doing, to reduce costs; and consequently they are seen as of crucial importance in the programme to address the current housing shortfall. However non-traditional construction systems have not had an entirely successful history so a confidence gap has developed within the consruction industry itself, in its customers, and in its insurers and lenders.

  In order to regain their confidence the BRE is developing The Standard for Innovative Methods of Dwelling Construction, LPS (Loss Prevention Standard) 2020, with the help of industry stakeholders including The Association of British Insurers, Council of Mortgage Lenders, NHBC and HBF. It will provide a route to certification for innovative building systems, sub-assemblies and elements which are not wholly covered under current recognised standards and codes for dwelling construction, and which have a limited track record of service in the UK. It will also cover performance in use, particularly in the face of disaster (fire, flooding, exceptional storm etc), the ease and practicality with which repairs can be carried out and their cost, ease of adaptation and extension, and behaviour when subjected to everyday use eg having things fixed to it (such as hanging baskets etc) or chip pans going up in flames.

  I have today spoken to Oliver Novakovic at BRE Certification Ltd who advised that the standard has been prepared and that the consultation period is over. Responses were very supportive, the Certificate has been drafted and that calibration of the standard is now under way. This effectively means that a trial assessment is being carried out on five candidate systems, whose manufacturers have paid for it.

  Once the final approved standard is published, manufacturers and suppliers will be able to apply to BRE Certification and its licensees for the certification of their systems and components against it.

  On the basis of the consultation, which was very positively supportive, it is reasonable to expect that LPS2020 will perform as designed, to instil confidence in Modern Methods of Construction so that they can fulfil their potential and add value to the constuction process.

  P.T. The new Loss Prevention Standard (LPS) 2020 has been developed by BRE Certification Ltd and major stakeholders at the request of insurers, mortgage lenders, regulators and manufacturers. The standard will provide a means to assess the performance and design of new methods of construction that do not have an adequate track record in the UK.

  The new standard will be a positive force for change as the demand for Modern Method of Construction increases, partly from the pressures of Government and partly from commercial pressures to deliver volume. The standard should give confidence to the institutions and purchasers alike and dispel some of the historic prejudices and concerns about MMC from the past.

  It will add value to the construction process providing innovation, higher quality within shorter time scales of construction giving equal treatment for insurance and lending as given to conventional dwellings.

  The new standard will give confidence and control in choosing innovative building systems.

D:  INFRASTRUCTURE (INCLUDING FACTUAL INFORMATION, REFERRALS TO WATER COMPANIES AND RECOMMENDED ACTIONS FOR GOVERNMENT OR OTHERS)

7.   Is the government doing enough to secure sufficient funds for the timely provision of infrastructure, such as transport links, schools and hospitals in the four Growth areas?

  Not answered.

8.   Are water companies doing enough to secure the supply of water resources to the four Growth Areas?

  1.  Milton Keynes and the South Midlands

  2.  The London-Stansted-Cambridge corridor

  3.  Thames Gateway

  4.  Ashford

  8A. Some Water Companies are not active players in the planning process until the later stages when unexpected changes to the programme can cause major delays. These delays may involve a development company having to make significant financial contributions to the construction of a water reservoir or additional sewage treatment. Although regional experiences differ, there is an opinion that Water Companies are most comfortable with supplying traditional services that include, sewage treatment, supply leakage repair and metering services.

  8B. Sustainable Urban Drainage Systems (SUDS) have been proposed at an early stage in planning to recharge rivers and aquifers at a natural rate, as an alternative to traditional storm run off sewer diversions that can deplete natural ground aquifers and contribute to floods. SUDS meet local planning requirements and are often cost effective. These sustainable plans may be rejected at a later date due to the EA, Water Company or Planning Authority not wanting to adopt a SUDS drainage system. If the Planning authority does adopt the system, then they may apply heavy commuted sums which makes it prohibitively expensive for the developer. This impedes progress. Some frustration is expressed by our strategic land planners that after lengthy periods of debate the development plans then receive a "no commitment" decision in the later stages.

  8C. Hence where developers seek to utilise best environmental practice and exploit the natural drainage characteristics of a site in response to their Sustainable Development policy, the ongoing responsibility for the scheme should be defrayed to an adopting Authority. This should not require large amounts of commuted sums being paid to a Local Authority. A significant change in planning policy and relationships between Local Planning Authorities and the EA is required to ensure that there is a national framework for the assessment, implementation and final adoption of efficient water management systems on all sites against flood risks or drought conditions.

  8D.  Water UK Briefing (November 2005)—New sustainable water resources need to be planned by the EA and water companies in line with the planned residential and mixed-use growth areas to maintain secure public supply. Investment is required in developing sustainable water resources such as:

    —  Increased storage—expanding existing reservoirs;

    —  Increased natural storage eg, wetlands, restoring floodplains, lakes;

    —  Coastal desalination; and

    —  Improving the management of catchments.

Is concern about security of water supply, in the South East of England in particular, a valid one or simply a knee-jerk reaction to a few hot, dry summers?

  8E.  Crest Nicholson has a Sustainable Development policy (2002) and is aware of the global environmental pressures, in particular Climate Change, and how this may impact our industry at a national/local level. We are also aware of the overwhelming scientific consensus that the UK's climate is changing and the Southeast and East of England is at the forefront to this change. The Water UK supply outlook for 2006 is "normal for the UK but serious in some parts of the Southeast where for a year rainfall has been well below average. Long-term prospects are good as long as the management of water resources is fully recognised in development planning. To the water industry this means making sustainable development the first priority."

  8F.  Crest Nicholson has participated (November 2004) in the consultation stages of the Three Regions Climate Change group's "Adapting to climate change: a checklist for development" by The Sustainable Development Round Table for the East of England, the London Climate Change Partnership and the South East Climate Change Partnership. Documents such as this should also be taken into consideration in building policy development, if not already taken into account.

9.  Is there sufficient effort being made by the Government, the Environment Agency and the Water Companies to educate people about water efficiency?

  9A.  The efforts being made by Government to educate people about water efficiency appear to be less at present than the efforts being made to raise awareness and educate the public about climate change, carbon emissions and energy efficiency (via the Carbon Trust and/or the Energy Saving Trust). This is evident from advertisements on television, in the press and in public places. The emphasis on carbon emissions is understandable considering the significance negative impact this may have on the survival of future generations. In times of drought there have been memorable reactive efforts to educate people through publicity on water efficiencies such as hose pipe bans and the use of showers for bathing. Perhaps there needs to be a consistent and prolonged publicity programme for water efficiency through a Water Trust. The Commission for Architecture and the Built Environment (CABE, WWF & HBOS, July 2004) communicated a report on the "Attitudes and Decision Making among Home Buyers". Quantitative research on the environmental aspects of design, found that 48% of those surveyed thought that water efficiency, as assessed by EcoHomes, was very important. At local government level Crest Nicholson and other stakeholders were invited and gave evidence to the KCC Strategic Planning Policy Overview Committee: Select Committee—"Water and Wastewater, particularly in Ashford" on 13 July 2005. Questions were regarding water efficiency and new housing developments (the management of 31,000 new homes and the rise in water demand and wastewater output. Numerous councils are communicating their sustainable development guidance and plans to developers and the public that includes good water efficiency practices

  9B.  The Environment Agency (EA) is making an effort by conducting a stakeholder consultation on "water infrastructure for new developments" (December 2005). Crest Nicholson has contributed written answers to their questionnaire on decentralised and/or innovative water infrastructure solutions as envisaged under the Government's Sustainable Communities Growth Areas. This consultation discusses technical options and barriers to such infrastructure implementation. The EA web site section on "Water Resources" is a passive form of education for people in general about water efficiency on how to save water in the home, garden and at work. There are sub-sections on "Water Efficiency Awards" and "Water Company resource plans which focus on mains supply water leaks, households metering, abstraction targets and drought plans. Innovative water efficient technologies appear to be being encouraged through annual awards on a voluntary basis. There appears to be a need for the EA, Planning authorities, Water Companies and developer to come to an agreement on how to prepare for sustainable new development scale water resources (supply and treatment).

  9C.  Some regional Water Company web sites (supply and sewage treatment) have sections to educate people about how to save water in the home, garden and at work. Their annual Sustainable Development and/or Environmental Reports also communicate wider water service issues. However, there is a need for them to communicate and educate their closest stakeholders and the wider public concerns on their plans for secure innovative and sustainable water resource supplies to address the needs of the planned urban renewal expansion.

January 2006





 
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