WHQS 2023 – funding landscape at odds with timescale of ambition

The Welsh Government has now published the finalised Welsh Housing Quality Standards following a lengthy consultation period with the housing sector and relevant stakeholders. Whilst the proposed standards were widely accepted the housing sector raised concerns around the timescales for meeting decarbonisation and net zero targets. Welsh Government has acknowledged these concerns resulting in a set of standards that afford more flexibility for landlords in meeting decarbonisation targets using a planned approach.

Welsh Government has now given clarity on the funding available to meet the new standards. There will be £70 million this financial year and a further £70 million in 2024/25 as part of optimised retrofit programme. Whilst we welcome this funding and ongoing commitment to finance the new standards, these monies fall short of the total investment needed.

According to the Future Generations Commissioner's “Homes Fit for the Future: The Retrofit Challenge” (carried out by New Economics Foundation) there’s a £2.7 billion funding gap in the amount needed to retrofit social housing and a £3.9 billion gap to retrofit homes in fuel poverty in Wales. It goes on to say that the total investment needed over the next decade to retrofit social housing stock in Wales is £5.52 billion (£4.82 billion to retrofit homes in fuel poverty) with around £1.7 billion of that to come from Welsh Government and £3.6 billion from Westminster.

Social Housing providers are already having to manage real-term cuts to their budgets due to ongoing inflationary pressures. Whilst they are committed to decarbonising their stock and moving to net zero more funding will be needed to support social housing providers to meet the new WHQS standards.

Matt Dicks, national director at CIH Cymru said:

“Whilst the sector is committed to working in partnership with Welsh Government, lenders, and other stakeholders to find innovative ways to draw in the investment required to make this shared ambition a reality, meeting the WHQS 2023 standards will be challenging for the housing sector in Wales. Whilst we welcome the Welsh Government’s aim in building on the successes of the original WHQS, ensuring the provision of good quality homes, this cannot be done without sufficient funding.

“There must be long-term certainty from Welsh Government linked to financing activity to decarbonise existing homes at pace. The level of funding outlined is not likely to be able to meet this aim due to ongoing inflationary pressures of housing organisations’ wider operating environment. If we are to ensure that social housing in Wales can meet the high standards outlined in the new WHQS, then we need to ensure that social housing providers are provided with the adequate level of certainty around the financial support needed to meet our shared ambition."