LGA response to the MHCLG and DESNZ consultation on Improving the Energy Efficiency of Socially Rented Homes in England through the introduction of a Minimum Energy Efficiency Standard (MEES)

The Local Government Association (LGA) welcomes the Government’s commitment to improving the energy efficiency of socially rented homes and supports the principle of introducing Minimum Energy Efficiency Standards (MEES) to the social rented sector. 

Local authorities want to work with Government to tackle poverty and support local approaches on energy efficiency and carbon reduction, with the majority doing so through net zero initiatives. However, we have concerns about the deliverability, affordability, and clarity of the proposals as currently set out in the consultation. Our concerns are primarily around the absence of a finalised Energy Performance Certificate (EPC) framework and the Home Energy Model (HEM), which are central to understanding the implications of MEES. Without clarity on these foundational elements, it is difficult for local authorities with housing stock to assess the feasibility of the proposed standards or to plan effectively for compliance. 

We have not sought to answer the questions as set out in the consultation, instead our response is grouped by theme.

Key messages

• We support the overall proposal to set MEES at EPC Band C for the social rented sector, mirroring the standard that will be implemented in the private rented sector. Local authorities with housing stock have made considerable efforts already towards decarbonising their housing stock and improving the energy efficiency and level of comfort across social homes.
• Our primary concern with the proposals is the uncertainties surrounding the new HEM and reformed EPC framework, which make it difficult for local authorities with housing stock to thoroughly assess the impact they might have locally. We call on the Government to urgently publish the HEM and reformed EPC framework.
• Once the upcoming HEM and reformed EPC framework have been published, Government should work collaboratively with the social housing sector and technical experts to finalise the target metrics for MEES and ensure they are appropriate.
• Local authorities’ Housing Revenue Accounts (HRAs) are under significant financial strain and adequate funding is needed to support the implementation of MEES in the social housing sector. Given the current issues regarding a skills shortage and limited supply chain capacity, a long-term strategy and funding agreement is needed to support local authorities with housing stock to implement MEES across their homes.  
• The proposals in this consultation, as well as those in the Decent Homes Standard (DHS) consultation, will place additional costs on HRAs. Rent convergence, if implemented, will provide additional income but this will not be sufficient to meet the Government’s expectations on the new supply of homes in addition to improving the quality of existing stock.

Metric options for MEES

The consultation outlines several options of metrics that could be used as criteria for meeting MEES. It is important to note that the final measurements that will be used to assess the metrics have not been confirmed as we are awaiting the outcome to the Government’s previous consultation on Reforms to the Energy Performance of Buildings regime. As a result, it is difficult to comment on the metric options proposed without understanding how they will be measured. Our response is based on the information currently available, and it is important that the Government continues to work with the sector once the reformed EPC framework and HEM are released and there is clarity on the specific measurements that will be used for each metric.

The Government’s preferred approach, Option 1, would require providers to meet a primary Fabric Performance standard and then a secondary standard of either a Smart Readiness or Heating System metric (the provider can choose which secondary metric to meet). We agree that Fabric Performance should be retained as Government’s leading policy position as it is cost-effective, supports energy security ambitions, and increases thermal comfort. The social housing sector has been investing heavily in fabric energy efficiency retrofit for many years and as a result social housing is becoming cheaper to run and more comfortable to occupy. 

While we support a fabric-first approach as the most cost-effective and deliverable strategy, we have some concerns around the secondary metrics of Smart Readiness and Heating System. Heating systems need to be used effectively if they are to provide any benefit to the occupant and/or save carbon emissions. If a heating system or its programming mechanism is not easily understood or easy to operate this could result in its inefficient use or not being used at all. Smart Readiness also requires the tenant or occupant to have a level of technical ability to utilise the smart credentials, such as smart meters, effectively and may also require the tenant to own devices that facilitate optimal operation. This limits the potential benefits associated with Smart Readiness and could make the investment ineffective.   

If Government continues to consider that the secondary metric should be decided by the provider, when there is a tenant in situ, this should be a decision that the provider makes with the tenant as both the Heating System and the Smart Readiness metrics would likely need some technical ability from the tenant. Tenants must be involved in decisions about the technologies installed in their homes, particularly where these may affect usability or comfort. Tenant engagement is not mentioned in the consultation, yet it is essential in ensuring that any energy efficiency measures that are installed are appropriate and will be used effectively. 

In addition to our concerns regarding the secondary metrics themselves, we are also concerned about the affordability of the dual metric approach (Option 1). Local authorities with housing stock have developed medium to long-term strategies through their Housing Revenue Account (HRA) business plans. Implementing Option 1 risks significantly disrupting these plans and placing additional financial strain on HRAs. 

It is important that local authorities with housing stock are given flexibility within the design metrics to approach different types of housing stock, especially hard-to-treat stock, with the most appropriate measures. Different types of housing require very different retrofit pathways and there is not a one-size-fits-all approach that works. The final MEES metrics should allow for different measures to be considered for different homes, locations, and build types. 

Compliance date and exemptions 

The consultation proposes a compliance date of 2030 for providers to meet MEES at EPC Band C across their social housing stock. Local authorities with housing stock have already been working towards EPC Band C (based on the current EPC framework and Energy Efficiency Ratios) and many have this embedded in their business plans. Official statistics from the Department for Energy Security and Net Zero report that by June 2025, local authorities with housing stock had installed around 87,700 energy efficiency measures across 43,200 social households just through the Social Housing Decarbonisation Fund (SHDF), with nearly 100% of upgraded homes improved to pre-reformed EPC Band C or above. However, since we are awaiting the publication of the reformed EPCs, it is unclear whether the previous EPC Band C will equate to the new EPC Band C. There is also significant local variation across the country in progress towards energy efficiency targets, and some areas may require more support from Government to meet this compliance date. Some harder-to-treat housing stock will also require a greater level of attention and retrofit to meet MEES and may be difficult to get ready by 2030.

It is important that the timescales for implementation do not unintentionally increase the costs of retrofit due to competition for workforce and supplies, given the skills shortage and limited capacity across the sector. To address this issue and ensure that local authorities with housing stock can meet the compliance date, Government need to focus on providing the support needed to prepare the supply chain and skilled workforce to implement MEES.  

A £10,000 cost cap per home is proposed, meaning that if a provider spends up to this amount (including the use of grant funding) and the home still does not meet MEES, they can apply for an exemption that delays further compliance requirements until 2040. A cost cap is a welcome safeguard, however, there is ambiguity around what is classed as eligible expenditure under the cap, such as whether PAS 2035:2019 and PAS 2030:2019 assessment fees will be included. We therefore ask that Government clarify what will be included under this cost cap.    

The consultation outlines transitional arrangements to support the sector to adapt to the changes. Homes that meet EPC Band C under the current system will be considered compliant until their certificates expire (even after the new EPC framework is introduced). This applies both to homes that already meet the standard and those upgraded to EPC C before 1 April 2028. This transition is sensible and will help the sector adapt to the new EPC metrics. 

While the transitional arrangements and exemptions are appropriate, it is key that Government produce clear and detailed guidance for local authorities with housing stock to understand how the various exemptions and timelines will work alongside each other. The sector will need sufficient time to understand the new metrics alongside the wider changes to the Decent Homes Standard (DHS), conduct energy modelling, account for these changes in their business plans, and ensure they have a sufficient workforce.

Funding and delivery 

Funding and deliverability remain major concerns. Introducing MEES to the social rented sector is an important step towards improving the quality and energy efficiency of social homes, but local authorities with housing stock must receive adequate funding to implement this. 

The Government’s impact assessment estimates an average cost of £4,488 to £5,292 per home to meet the proposed standard of EPC C, totalling £8.5 to £9.5 billion across the sector. Feedback from local authorities with housing stock suggests these figures may significantly underestimate the true costs, particularly in areas with older housing stock or limited retrofit capacity. 

Existing funding programmes, such as the Warm Homes: Social Housing Fund, are unlikely to be sufficient to meet these costs. Housing Revenue Accounts (HRAs) are under significant financial strain and are facing competing financial pressures, including building safety remediation, repairs and maintenance, and new housing development. We ask Government to develop a comprehensive funding strategy that includes multi-year grants, capacity-building support, and investment in workforce development and supply chain readiness. 

Wider decarbonisation

The consultation asks for evidence relating to wider decarbonisation in the social rented sector. The LGA and the National Housing Federation commissioned a piece of work to understand what proportion of social housing was hard to decarbonise and discovered that only five percent of social housing required investment of over £20,000 to reach net zero.  

While the LGA supports the direction of travel outlined in the consultation, we believe that greater clarity and support are needed to ensure that MEES are deliverable and aligned with the realities of the social housing sector. We look forward to continuing to work with the Ministry of Housing, Communities and Local Government and the Department for Energy Security and Net Zero to shape a policy that improves energy efficiency while giving local authorities with housing stock adequate support.