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Final minutes for REEPS8
Regulation of Energy Efficiency in the Private Sector
Working Group Meeting 8 – Highlander House 12 August 2014
Minutes
Present
Caroline Elgar (CE), Scottish Association of Landlords
Roger Curtis (RC), Historic Scotland
Elizabeth Leighton (EL), Existing Homes Alliance
Michael Bruce (MB), Scottish Land and Estates
Stephen Garland (SG), Scottish Government (Chair)
Denise Buchanan (DB), Scottish Government
Valerie Sneddon (VS), Scottish Government
Fraser Stewart (FS) (for Sarah Beattie-Smith), Citizens Advice Scotland
Jim Hayton (JH), ALACHO
Katie Chan (KC), Scottish Government
Oscar Guinea (OG), Scottish Government
Adam Krawczyk (AK), Scottish Government
Scott Restrick (for Norrie Kerr), Energy Action Scotland
Steven Scott (SS), Scottish Government
Apologies
Silke Isbrand, COSLA
Norman Kerr, Energy Action Scotland
Sarah Beattie-Smith, Citizens Advice Scotland
Brian Hunter, Scottish Government
Jamie Robertson, Scottish Government
1. Welcome and Apologies
SG noted that the purpose of today’s meeting is to get steers from the group on
recommendations from the joint subgroups discussion on trigger points, and on the
next steps around enforcement. It was noted that we need to make progress on
elements of the proposals that are not reliant on the output of the modelling.
However, the group will have an opportunity to consider all this in the round in the
autumn.
2. Minutes and actions arising from REEPS 7
The minutes of the last meeting were circulated on 11 July and no comments were
received. Members noted updates on the action points:
Action 7.1 Completed - the project team circulated details of the consultation
in England and Wales which launched on 22 July.
Action 7.2 RC fed back information from SNH about bat surveys. Following
discussion it was felt that a survey is probably not a statutory obligation, but
there may be local authority requirements. It was noted that there may be
additional costs around this and potential implications on timescales for
completing work if surveys can only be completed at certain times of the year.
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Action 8.1 To note - possible implications of bats to timescales/costs of work can be
considered when REEPS comes to discuss possible exemptions/ abeyances, as
appropriate.
Action 7.3 Completed - The reference to Consumer Focus was amended to
Consumer Futures in the minutes of REEPS 6.
Action 7.4 It was noted that the research referred to by Building Standards
Division was based on new build and is a work in progress. SS will feedback
on progress as appropriate in due course. It was noted that ventilation
continues to be a live issue for REEPS (with reference to Action 6.2), and that
this can be picked up in terms of looking at the processes required to provide
advice on how to meet the REEPS standard. PAS 2030 was also referred to
as being potentially of interest to REEPS members.
Action 8.2 To note - project team will forward Building Standards report if it becomes
available during the course of the REEPS project.
Action 8.3 PULSE report to be circulated to members of REEPS and RAG.
Action 7.5 The project team confirmed that there is a UK wide process for
amending SAP. Further work is being done to consider how to feed issues
raised by the REEPS discussions into that process, and REEPS may want to
take SAP timescales into account, for example when considering lead-in
times. The group agreed RAG’s approach that it would be best to use SAP
for modelling, while noting its shortcomings, which should be raised through
the Technical subgroup.
Action 7.6 It was noted that agenda items 4, 5 and 6 would pick up on the
action around providing an update on stakeholder engagement.
Action 7.7 The doodle poll for a session with the contractors has not been
sent yet but will be once the project team has discussed further with
contractors.
Action 8.4 Project team will confirm aims of session with contractors and send
doodle poll to members in due course.
3. Update from project team
Modelling
AK updated the group with progress on modelling. There are c400,000 properties in
bands E, F and G in Scotland, with a higher prevalence in private sector, detached
and pre-1919 stock. Typologies have been signed off, with 358 archetypes. This
approach will cover 91% of properties, with the remainder being assigned to the
closest match.
A hierarchy of measures has also been suggested for modelling, and the contractors
have made suggestions on costs including auxiliary costs and additional costs for
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rural areas. AK has received comments on the second draft of the report and is
reviewing these.
The modelling is behind schedule at the moment as phase 1 has not been signed
off. However, given that the modelling process is automated and some of the
information being produced as part of Phase 1 is moving into elements of phase 2, it
is likely that the contractors will be able to bring the project back on track. AK will
continue to monitor this with the contractors with the intention being of signing off
Phase 1 around late August. REEPS members should continue to feed any issues
through RAG members.
DECC consultation – update
VS updated the group on the DECC consultation on Private Rented Sector Energy
Efficiency Regulations (Domestic) which was launched on 22 July.
VS reported back on a consultation event she attended and noted the following key
points (noting that these did not constitute formal responses to the consultation):
 there were similar interests and issues to those being discussed by REEPS.
 one of the proposals is to have a “backstop” date from when all PRS.
properties will have to meet minimum standards, provided that there is an
existing EPC. There was some discussion at the event as to what would be
an appropriate timescale for this.
 the consultation is seeking views on whether there should be a trajectory, with
some support that it would provide a clear direction on future standards.
 there were different views as to whether the proposed exemptions were the
right ones, and if there were too many. There was also some discussion about
the commitment in the consultation that there will be no upfront costs to
landlords.
 It was suggested by one attendee that there would be benefit in also looking
at owner occupiers.
It was noted that while the PRS energy efficiency regulations do not have a
trajectory, the new fuel poverty strategy (for England only) does have a trajectory.
There are two other DECC consultations running, on the English fuel poverty
strategy and energy efficiency regulations for the non-domestic sector.
Action 8.5 Project team will seek clarification as to whether these proposals also
affect Wales, and if so, what organisations are responding.
4. Trigger points
VS introduced Paper 8/2 and fed back from the recent subgroups joint workshop,
which looked at trigger points and enforcement. The subgroups purposely took the
simplest situations for point of sale and rental to establish principles, and further
work will then be done to look at exemptions. Other trigger points can be explored in
the communications plan to support REEPS or could be considered for a later date.
The group agreed the 4 recommendations in the paper, and also noted the following
points:
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
Backstop date for introducing minimum standards could be considered for
properties in the PRS (with the caveat that there may need to be provision for
landlords where tenants refuse access). A backstop date would be more
difficult to apply for owner occupiers.

Some concern was expressed that there has not been sufficient research
done on the impact on the market of sale and rental as trigger points, for
example in relation to owners in negative equity. However, it was noted that
any agreement at this stage is around principles, and that further work will be
done to explore possible effects of using sale and rental as trigger points
(noting also that some measures could add value to a property). The
communications plan provides an opportunity to consider ways to encourage
voluntary improvements to support the work of REEPS.

Most of the group agreed with the principle of progressing the point of sale or
rental as primary triggers for regulation. The group asked that legislation be
framed as positively as possible and that the possibility of incentives, such as
council tax exemptions (eg for early adopters), is explored.

SLE noted that it cannot recommend following the proposed trigger points to
its members at this stage as the full investigation of all issues had not yet
been completed. SLE would continue to engage with the process, but would
like the REEPS group to consider the “voluntary principle” and alternative
enabling legislation, such as “cap and trade” or LBTT allowances in order to
bring in resources to support investment in improvement measures. It was
noted that the agreed remit of the group is to develop proposals for minimum
standards, but that the Wider Context subgroup’s interest in “fit with
incentives” provided an opportunity for these issues to be suggested.

It was also suggested that REEPS consider whether a pilot phase would be
possible to examine the possible impact of proposals on different parts of the
housing system.

It was noted that the Scottish Household Survey includes statistics on how
long people have been in their current homes – this could be useful in helping
gauge turnover of stock and therefore impact of any draft standards.

There are potential implications in imposing increased burdens for local
authorities in enforcement when using sale and rental as trigger points.
Discussions with local authorities and COSLA will be important. To this end, a
workshop session will be arranged with wider participation from local
authorities, in particular to explore these issues. It was noted that the way in
which the standard is set may affect the enforcement processes (for example
whether need technical skills or administration skills to enforce).
Action 8.6 Project team to set up a workshop with wider participation, particularly
from local authorities, to explore issues such as potential enforcement routes, and
the role of local authorities, incentives and individuals. This workshop will provide the
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opportunity to work through the processes that might be needed to support
regulation.
Action 8.7 Project team will explore opportunities for Citizens Advice Scotland
(CAS) and/or EST to carry out focus groups (or similar) to support this phase.
5. Enforcement route – sale
KC introduce Paper 8/3 on enforcement routes for sale. The paper outlined the
discussion from the recent joint subgroup session, and identified suggested areas for
further work. It was noted that the recommendations were based on a
straightforward sale process to establish the principles for enforcement, and that
further work would be done to explore other “what if” situations of the seller, buyer
and property.
The group discussed the possible limitation of “sale” to only those situations where
money exchanged hands (for example, excluding inheritance). Whilst there was
general support for this, they noted that more work would be done to explore wider
circumstances where a property may change title, before finalizing views. It was
suggested that the Register of Sasines could be asked for overall numbers.
The group agreed with the proposal that obligations to meet minimum standards can
be passed on to a buyer. Further work will be needed to establish time limits on this
and to look at whether an obligation to improve should not be passed on more than
once. Other situations that will be looked at further included:

Shared equity (and who pays for the improvement)

Impact of inheritance tax, capital gains tax etc. as these taxes may affect the
seller and purchaser differently

Rural and island situations where properties may be passed on from one
generation to the next, and where these properties are substandard

Where there is a transfer from owner occupation to the private rented sector.
The group agreed that the next steps should be to look at the effects this could have
on the market and how obligations could be passed on. The project team will
arrange meetings with parties with an interest, such as local authorities (via a
workshop) and the Law Society to explore options for enforcement and possible
impacts on different aspects of the market.
6. Enforcement routes – rental
DB introduced Paper 8/4 on enforcement routes for rental which summarized
discussions at the joint subgroup session, and sought views on considering a
standard for new tenancies plus a backstop date; the possible scope of “rentals” to
be considered; and options for enforcement routes to explore.
The group broadly agreed with the content of paper, noting also the following points:
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

Whilst noting that restricting REEPS to, for example, only those properties
that would be covered by the repairing standard might enable use of existing
processes for enforcement, the group felt that no tenancies should be
excluded at this stage. Agricultural tenancies were raised as an example for
consideration, in terms of the fragility of the agricultural economy and potential
financial and social implications for rural areas, whilst also noting possible
relevance to fuel poverty objectives. It was noted that the Agricultural
Holdings legislation potentially introduced additional complications.
Existing enforcement processes in the PRS may not be being used effectively,
and danger of being perceived to be overregulating “good” landlords.

It was noted that the consultation in England and Wales on minimum
standards for energy efficiency in the PRS identifies local authorities as the
enforcing body, but does not specify how it should be done.

The group noted that potential (reasons for) exemptions will be discussed at
the next meeting of REEPS, noting that these discussions will also be subject
to the outcome of the modelling.
Next steps: The project team will arrange discussions with representatives of local
authorities to discuss options for enforcing minimum standards in the private rented
sector, and will continue to engage with other relevant stakeholders to further
explore the issues identified.
7. Forward look
The project team will work on outline potential enforcement processes for both
tenures, and will explore these through further stakeholder discussions to help inform
REEPS discussions. It is important to make progress on these issues to enable
REEPS to work towards identifying recommendations for consultation in spring.
The project team will also look to use the subgroup meetings to begin to look at
possible scenarios, to help inform the proposed meeting with contractors in October.
8. AOB/date and time of next meeting
Historic Scotland’s conference is on 30 September and 1st October.
Action 8.8 RC will pass details to DB for circulation.
The next REEPS meeting will be held on 7 October in St Andrew’s House,
Edinburgh. This meeting will be in the afternoon.
Action 8.9 Project team to confirm time of the next meeting.
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