The MEES conversation: policy change, achieving compliance and overcoming challenges

Being part of the conversation

This week, I was able to attend a conference on ‘Fuel Poverty and the Private Rented Sector’ run by National Energy Action. It was aimed at bringing together everyone that should be part of the conversation; local authorities, landlords, tenant associations and the voluntary and community sector, and was a combination of insightful presentations, expert panel discussions and breakout roundtable discussions across professional groups on local authority current and future regulatory activity.

It’s always really motivating to be in a room filled with people who all care about the same thing and this was no different, with passionate discussion from a range of experts in their field on the tools that local authorities have to ensure that those in the PRS that are fuel poor are not living in cold homes. Inevitably, the majority of this discussion centred around the minimum energy efficiency standard (MEES). It will be really interesting to see the NEA report on the summary of these discussions in due course.

The MEES timeline of policy change

It was back in 2014 that The Fuel Poverty (England) Regulations 2014 set a target in law for England that as many fuel poor homes as reasonably practicable achieve a Band C energy efficiency standard by 2030, which was underpinned by the Fuel Poverty Strategy for England.

In 2015, we saw the introduction of The Energy Efficiency (Private Rented Property (England and Walkes) Regulation 2015, (commonly referred to as MEES, meaning the minimum energy efficiency standard). These regulations introduced the requirement for PRS properties to achieve a minimum band E unless a relevant exemption is registered. They were enacted in April 2018 for new tenancies and April 2020 for existing tenancies.

When MEES was introduced, it was always with the understanding that there was an intention to increase the legislative requirements at a later date to band D and then band C, in line with the targets referred to in the first paragraph.

In 2019, the department for Business, Energy and Industrial Strategy (BEIS) conducted a Consultation on Fuel Poverty Strategy for England (September 2019) and this recommended retention of the statutory fuel poverty target to ensure as many fuel poor households as is reasonably practicable are improved to a minimum energy efficiency rating of Band C by the end of 2030 and the supporting interim milestones of as many fuel poor homes as reasonably practicable to Band E by 2020 and Band D by 2025.

In 2020, BEIS ran a further consultation on improving the energy performance of privately rented homes with the intention of gaining views on the proposal to amend the 2015 regulations to impose the requirement of EPC C by 2025 for new tenancies and 2028 for all tenancies. The consultation also sought views on an increased cost cap (from £3,000 to £15,000) and whether the regulations should impose an EIR (environmental impact rating) band C as well as EER band C. The consultation stated an aim to publish the response in Spring 2021 and lay regulations in autumn 2021, however the results of this consultation which closed in January 2021 have never been published.

In May 2021, BEIS launched the Private Rented Sector Minimum Energy Efficiency Standard Compliance and Enforcement Funding Competition. This was funding aimed at local authorities wanting to resource the enforcement of MEES, and involved varying amounts of funding up to £100,000, totalling £4.3 million across 60 successful local authorities. Whilst reporting back to BEIS on achievements was part of the funding criteria, no report has been published on what was achieved by the funding.

It is clear that at this point, talks about current enforcement and the proposed future amendments to regulations went quiet. Landlords and regulators alike felt uncertainty about when an EPC D and C requirement would come into force.

After a silent couple of years with little news emerging on the subject of increasing EPC requirements, in October 2023 Rishi Sunak gave a speech about NetZero commitments, in which he said that the Conservatives had decided against the move to PRS EPC C requirement. This led to widespread frustration, even amongst landlords, some of whom have already heavily invested in energy efficiency ahead of proposed band C requirements, and some of whom are hoping for funding to assist them in achieving EPC C to improve their tenants’ comfort and health. The NRLA have campaigned for adequate funding for this.

In April 2024, the Committee on Fuel Poverty wrote a letter to Minister Solloway, in her role as Minister for Energy Consumers and Affordability. They put forward that the £3,500 cost cap should be increased and that to achieve EPC C by 2030, the government should introduce a MEES requirement of EPC D by 2025.

Following the change in government in May 2024, in line with proposals in the labour manifesto, Ed Miliband, Energy Security and Net Zero Secretary, promised that they had an ambition to cut the number of people in fuel poverty as much as possible during the five years of this parliament. In July 2024, it was announced in the House of Commons that Labour would be requiring PRS properties to achieve EPC C by 2030. This was further confirmed last week at the Labour Party annual conference by Ed Miliband, with the Department for Energy Security and NetZero committing to a consultation on the proposals.

Whilst no formal announcement has been made about the timescales for a consultation or indeed, the introduction of amended regulations, it is clear that not only is MEES here to stay but there is fresh commitment to the increased standard of requiring a minimum EPC C in the PRS.

What will the amended regulations look like?

It is likely that when a consultation is published, the questions will provide key insights into the direction of thought in terms of future policy. Currently, we are wondering about the following key issues:

¾    Will there be an interim band D goal? 6 years is a long time to wait for those in fuel poverty living in cold PRS homes. It is unknown whether any amendments to regulations will involve a jump from minimum E to minimum C, or whether an interim requirement of minimum band D will be introduced.

¾    Will the cost cap exemption be removed or increased? Currently, landlords are only expected to make £3,000 of energy efficiency improvements to their properties and if improvements would cost more than this, they can register an exemption. The 2020 consultation mentioned above discussed an increase of this cost cap to £15,000, so it will be interesting to see what the consultation asks in terms of a reasonable cap on improvements. Other legislation relating to PRS standards, such as the Housing Act 2004, does not impose any spending caps.

What financial support will be put in place for landlords?

We do not yet know exactly what support will be put in place for landlords but it is likely that there will be continued development of funding and incentives. At the same time as the MEES requirements were mentioned, there was mention of a new ‘warm homes: local grant’ alongside the Energy Company Obligation funding, with further news on this front expected to be set out through the spending review. New policy guidance for local authorities on the warm homes local grant suggests that landlords themselves will receive full funding for one eligible home and 50% contribution for other properties upgraded. Alongside this, there will still be eligibility through a tenant’s low income.

What support will local authorities receive?

Despite the funding offered to local authorities to enable MEES enforcement, there is not widespread regulation taking place. When questioned about the lack of enforcement in 2022, mayor Sadiq Khan said that local authorities needed more than the tools to regulate, they needed resource and training.

Generation Rent have used the Freedom of Information Act to gather information on MEES enforcement activity and found that just 24 of 100 local authorities in England had issued any enforcement notices in relation to breaches of MEES, and only 14 had issued any financial penalties.

It isn’t yet known whether there will be any funding offered to local authorities to support enforcement of amended regulations. Given the planned overhaul of PRS regulation generally and the fact that capacity and resource were identified as barriers to previous enforcement of band F and G properties and it is likely that amended regulations will need to be accompanied by investment in local authorities to ensure robust uptake of the capacity, they will need to engage with landlords and enforce against the many thousands of band E and D PRS properties.

What challenges will local authorities face in taking proactive MEES enforcement?

¾    Devising policy, procedure and documents: New legislation requires an ‘up-front’ time investment from local authorities to prepare policy, procedure and documents to enable and underpin their regulatory activities.

¾    Training staff: Legislation isn’t always easy to understand, particularly where financial penalties are likely to be served. New procedures can also take time to embed within team activity.

¾    Understanding retrofit challenges: Not all properties have an easy solution, whether it’s a listed building, a building in a conservation area or simply an older building requiring vapour permeable solutions, buildings can present unique challenges in terms of appropriate energy efficiency measures that can be retrofitted, which requires specialist knowledge and insight that local authority teams may not have. While an EPC makes general recommendations for measures, they do not consider everything, for example, where there is no current gas supply to a property, an EPC will not recommend installation of a gas boiler.

What should you do to help?

Firstly, take the time to understand the impact that properties with poor energy efficiency can have on occupants’ health and on environmental health. Properties with poor energy efficiency are colder and more prone to damp, contributing to both physical and mental health impacts. In addition, properties with poor energy efficiency lead to higher carbon emissions, contributing to the environmental impact of global carbon emissions and affecting our ability to meet NetZero.

Secondly, we are coming up to Fuel Poverty Awareness Day on 27/11/24. Could you make a commitment to support households in fuel poverty by pledging to enforce MEES robustly?

What can RHE do to help?

RHE recognise that local authorities can struggle implementing and enforcing new legislation due to the lack of available staff to write procedures/policies and new documents, particularly legislation that involves financial penalties. Here at RHE, our housing experts can alleviate this burden:

¾    RIAMS subscription: On our RIAMS platform we have template notices to assist you in your regulatory activities. We have a MEES procedure and templates for compliance notices and penalty notices.

¾    Housing Consultancy: We develop and provide MEES enforcement packages tailored to your individual needs. Every authority needs a financial penalty policy to enforce the regulations, which we can write for you. We can also provide solutions such as a full toolkit for your enforcement needs, including bespoke enforcement procedures, letters and assistance with running landlord engagement events.

¾    Training: Our MEES training covers all of the essentials, including the legislative framework, approaching engagement, creating warm homes, effective investigation, overcoming barriers, exemptions and service of compliance and penalty notices. We can also add a bespoke element to the training to include calculation of financial penalties under your own financial penalty policy.

Contact our Housing Consulting Team to find out more: [email protected]