Retrofit-first – Can we have a clear policy first?

Michael Gove’s decision to halt the demolition of the M&S London flagship store in Oxford Street has caused shockwaves across the development industry.


The secretary of state went against the recommendations of the Planning Inspectorate and stopped plans to knock down and rebuild Orchard House, a 1929 art deco building, over concerns that the benefits of the project would not outweigh its negative heritage and environmental impact.


Campaign group, Save Britain’s Heritage, opposed the planning application. It claimed that the building’s demolition “would carry unsustainable carbon costs” and go against Westminster Council’s own net-zero targets. The Architects’ Journal was also opposed to the project as part of its “RetroFirst” campaign which seeks to focus on limiting the “embodied carbon” of new developments – the carbon emissions associated with the building materials and processes to build and maintain the building and encouraging the retro-fitting and upgrading of existing properties where possible.


However, M&S state that it considered 16 options which would have retained the existing building, none of which it said were viable. Instead, M&S proposed a new building which would be one of the most sustainable in London and which it is claimed would have “paid back” its embodied carbon emissions within 11 years.


It is notable that the Secretary of State’s decision relied heavily on heritage concerns, despite the fact that Orchard House is not a listed building underscoring the tension between delivering sustainable energy efficient buildings and retaining our built heritage.


The Minister stressed that his decision should not set a precedent, nevertheless, it appears that this high-profile site is being used to symbolise a shift in government policy to the delivery of carbon reduction is through the re-use of buildings as opposed to their demolition – a “retro-fit first” approach.


The decision underscores the policy vacuum in this area of green policy making.  The National Planning Guidance contains only a fleeting mention of reusing existing resources and whilst Westminster Council intends to implement a “retro-fit first” policy, however, such a policy has not yet been drafted.  There is also no consistent approach to the calculation of “embodied carbon” associated with a development proposal.


The difficulties of retrofitting properties to achieve Net Zero cannot be underestimated.  Looking at the housing sector, adopting a fabric-first, worst-first approach to retrofitting older properties, such as the installation of external wall insulation, replacement cavity wall ties is often uneconomic. For example, an award-winning retrofit scheme in Staxton near Scarborough was supported by the Social Housing Decarbonisation Fund (SDHF) and included installing external wall insulation, replacement cavity wall ties, air source heat pumps and solar PV. The scheme cost £1.3m, yet only 15 properties benefitted at an average cost of approximately £86,000 per property, which could represent up to 50% of the total value of the property.  Clearly this is out of the reach of most homeowners.


Further difficulties arise for properties which are listed or are located in a conservation area where additional consents are required to permit retrofitting of energy saving measures.  Such projects are dogged by inconsistent application of the regulations and policies and long delays in obtaining Listed Building or Conservation Area Consents. Whilst it is acknowledged that there will always be a tension between preserving our heritage assets and moving towards more efficient homes, there is significant room for improvement in the drafting and application of planning policy in this area.


A further issue is the tax treatment of retrofitting versus new build – with the former attracting 20% Vat and the latter attracting zero Vat. The tax regime has been cited as a significant barrier to refurbishment and retrofitting of energy efficient measures by the British Property Federation.


We have a policy vacuum on embodied carbon and retrofitting and a tax system that supports new build development regardless of its whole life carbon emissions.


What is required is a clear and consistent national policy on the assessment and calculation of “embodied carbon” coupled with a tax and incentive system to encourage the refurbishment of properties where that delivers the best option for meeting Net Zero targets.  We cannot have the development of government policy through individual planning decisions and all the uncertainty which that creates.


While great care has been taken in the preparation of the content of this article, it does not purport to be a comprehensive statement of the relevant law and full professional advice should be taken before any action is taken in reliance on any item covered.