Spotlight on turning policy into delivery, with Ross Armstrong of Warmworks

Edinburgh-based Warmworks has spent the last decade upgrading fuel-poor homes in Scotland – giving it a wealth of experience in low-carbon energy efficient retrofit and making it something of an authority on heat pump installation in the process.

Such knowledge could prove very useful as the Warm Homes Plan takes shape south of the border, chief executive Ross Armstrong tells Andrew Gaved

Whether it was astute thinking in the corridors of Westminster or simple serendipity, the appointment of Renfrew-based Martin McCluskey to the role of Minister for Energy Consumers brought to the fore an MP who has a successful template for low-carbon retrofit on his very doorstep.

Because, for the Minister responsible for taking the Warm Homes Plan from theory to reality, the experience of Warmworks, the managing agent for the Scottish Government’s Warmer Homes Scotland home upgrade initiative for the last 11 years, is likely to prove very useful.

For Warmworks’ Chief Executive Ross Armstrong, these 11 years have been quite the learning curve, but the achievements have clearly been worthwhile. Naturally, given the raison d’etre of Warmer Homes Scotland (the biggest and longest-running such scheme in the UK), the biggest headline has been the significant impact on the lives and wellbeing of some of the poorest householders in the region – but at the same time, the Warmworks approach has set the gold standard for the process too:

“What we have built is really about enabling people who need help and support to make the transition to a more energy efficient home, because they can’t or won’t do it by themselves,” Ross says.

Warmworks recently celebrated completion of its 50,000th Warmer Homes Scotland application – an achievement of which Ross and his team are rightly proud: “It’s very easy to get buried in numbers and statistics, but 50,000 applications means 50,000 homes and families and people that are now living warmer, healthier lives because of the support the scheme provides.”

The economic benefits of upgrades

One of the dangers of the conversations around fuel poverty is that it can become focused only on immediate social needs, but Ross is at pains to stress that home efficiency upgrades are measures that provide consistent and long-term economic improvement too:

“There are people that we have helped 10 years ago who’ve gone through a heck of a lot in terms of the turbulence of the energy market and changes to their own circumstances: incomes change; people get jobs; they lose jobs. People in fuel poverty often have very chaotic lifestyles. But what those energy efficiency improvements do is they keep delivering those benefits and that protection from energy price shocks year after year.”

The role of the Scottish Government is key to this, he stresses, because it is not just providing funding to the Warmer Homes Scotland scheme (to the tune of £100 million a year), but providing a long-term platform that gives the vital certainty to the supply chain – the scheme has been tendered twice since 2015 on contracts of up to seven years: “That says to the industry downstream that it has a seven-year runway, which means companies can invest in skills; they can invest in apprenticeships; they can invest in new jobs; and they can invest in new technologies,” he says, “I think with the previous Westminster government, most of their schemes didn’t last for longer than 24 months.”

Ross warms to this theme of long-term consistency: “I don’t know any other industry where you would ask people to make investments into a £15 billion initiative and not give them a long runway in which to do it. It’s a £15 billion investment in the housing stock in this country. We should treat it like any other major infrastructure project – like an upgrade to the rail network for instance.”

There is a quantifiable economic benefit to the whole community provided by the scheme in Scotland too, Ross adds, which bodes well for the approach in England:

“We commissioned independent research three or four years ago and it found that for every £1 of government investment in Warmer Homes Scotland, about £3 of wider social benefit was delivered: people don’t use their GP as much; hospital re-admissions are down; and then, because we use local firms to subcontract the installation work, there is economic benefit to local communities too.”

Working with three governments

Warmworks is also in something of a privileged position, in that it works not only with the Scottish Government but with the Welsh and Westminster administrations too.

Ross has a message for the various governments: “I think every one could learn something from the other and if there was a more collegiate approach and more knowledge sharing, then we’d avoid the temptation to reinvent the wheel on the next scheme. We are looking to help millions of people who are in fuel poverty – they’re not bothered about the finer details of the policy framework. Their concern is how you’re going to make things better. And that means if something works somewhere else in the UK – whether that’s the Westminster government looking at what works in Scotland, or the Scottish government looking at what works in Wales or whatever – it’s on us to not spend 18 months on a never-ending cycle of consultation and navel-gazing. Let’s just say, ‘That works, so let’s scale it up’, because time is short and this is a national social crisis that we’re dealing with.”

This sense of urgency was very much to the fore at the recent meeting of the All-Party Parliamentary Group on Warm and Healthy Homes, where speakers were of a consensus in urging Minister McCluskey to start getting things done – and to underline the link between heating and health.

Ross has faith in the Minister’s ability to get things moving however: “I’ve worked with a lot of Ministers over the years and from my experience, he has really taken to the brief quite quickly and he wants to get this right. He wants to make sure that we get going on the opportunity from the £15 billion’s worth of investment and that we get it right. A lot of politicians do want to get stuff done and that means we have to translate the strategic into the pragmatic and spell out what it will mean for delivery on the ground.”

The industry stands ready

Importantly, he also believes that the industry is already fundamentally ready for the £15 billion task ahead:

“One of the things that really winds me up is the tendency to talk the supply chain down. It is absolute nonsense to say that the skills won’t be there to support the ambition, frankly. If you give the supply chain the right investment context, then the industry is full of entrepreneurial businesses that for the most part want to do a good job well and grow their business. It is not rocket science!”

As an aside, Ross also notes that it is vital that the various representative groups also work together collaboratively: “I think too often it’s ‘We are the industry, representing the heat pump lobby,’ or ‘We are the industry representing the solar lobby’ or whatever…I think government would find it more straightforward to deal with a broad church that represented all of these things, without them having to elbow each other out of the way and compete for space.”

Witness to the evolution of heat pumps

The fact that Warmworks has been managing low-carbon installations for a decade has given the company another key benefit – a ringside seat at the rapid evolution of heat pump technology.

“You can see the way that the technology’s evolved in terms of efficiency, noise reduction and their ability to be fitted in certain geographies from even seven or eight years ago,” he says, “And it will continue to evolve and get more efficient, so I’ve got a high degree of faith in the technology. In the right sort of building that has the right fabric envelope with a correctly designed and specified system, then heat pumps can be a terrific solution and can work at scale.”

And boots-on-the ground experience has proved this for the fuel-poor homes that Warmworks has upgraded, he notes: “If those conditions have been met, then we have had absolutely no issues. It’s a terrific technology that is going to continue to improve, but it comes with the caveat that we need to be really careful about avoiding some sort of Gold Rush – because there are people who want heat pumps to fail, and we have to avoid giving them that ammunition.”

The Scottish programme has a golden rule that the technology must not put the running costs up, he emphasises: “Very often if a household is going to get a heat pump, then we would also look at things like solar panels and battery storage, as well as the fabric envelope – because you want to make sure that in one intervention, you have as many measures as you can acting in concert to maximise the bill reduction.”

This golden rule, Ross adds, also means that a heat pump ultimately might not be the technology specified for a given property. He believes that other forms of electric heating will increasingly play a role in decarbonising: “Take heat batteries for instance – when they were called ‘storage heaters’, I think they had a bad rap, but if we can control them remotely and get people on some of the emerging smart Time of Use tariffs, the householder can save a lot of money with heat batteries as an alternative to heat pump. It is about having a set of tools to offer.”

The importance of local installers

One of the key areas of knowledge-sharing with those shaping policy in England will surely be Warmworks’ success with overseeing a network of local installers. Delivering the Scottish upgrades has required working with independent SMEs across the length and breadth of Scotland, including the Orkney and Shetland Islands: “These are all local firms – 31 SMEs that are governed by a set of clear and consistent quality standards. We add value by sitting between the Scottish Government and the industry and trying to develop that industry in a way that promotes really high-quality standards and best-in-class compliance with a really customer-focused experience that the householder knows is local and bespoke to them.”

He believes that this combination of local service at national scale is replicable with the Warm Homes Plan: “We’re spending £100 million a year on the Scottish scheme, but it still feels local to the householder and still feels personal to the person that needs support. And our contractor base is bought into that. They’ve come with us on this journey. Of the 31 companies that we have now, more than half of them have worked with us since the start 11 years ago. And that’s a relationship, right?”

A key element of the trust in these long-term collaborations must come from a simple factor – the installer is paid on time. It will probably come as a shock to those involved with ECO that Warmer Homes Scotland installers are paid within 30 days. For Ross, it really is simple: “If you do what we ask you to do in the way that we need it to be done – the consistency, the quality and compliance that we’re asking for – we’ll ensure that you’re paid a fair rate and paid on time. 100%of our invoices are paid in less than 30 days…We know that there were shortcomings in the ECO compliance regime, leading to rogue operators who weren’t properly monitored and we know that some companies were being asked to wait 90, even 120 days for payment on jobs that they’d done in good faith. That isn’t a sustainable policy instrument. You have to put something better in place.”

Warmworks, by contrast, ensures that the Warmer Homes work is closely monitored – down to which engineer is on the job and what their qualifications are, he says:

“I know we ask a lot of the sub-contractors that work for us, but we are dealing with some of the most vulnerable homes and families in the country. We can’t offer six or seven out of 10.”

Sharing the Warmworks model

With all this in mind, it will come as no surprise that Warmworks is talking to the Westminster government about its model:

“I think the Warm Homes Plan provides a really good platform for us to be talking to partners in England and in Wales about the model that we have – the fact that it works at scale and that it drives really high-quality outcomes,” he says, “We will talk to anybody about how it can work. It is absolutely transferable. These are not rocket science principles.”

However, that isn’t to say that is has to be Warmworks doing all the work: “Ultimately it is the end goal that matters,” Ross stresses. His concluding message to government is pretty clear:

“If you give us the right framework and the right parameters for investment, we are ready to go. But you need to do it quickly and to do it quickly, you’re going to have to be pragmatic and make choices and understand that sometimes perfect is the enemy of the good. If the supply chain and the decision makers know that, they need to have that collective voice that says ‘Now we need to get on with it!’”