The government’s sweeping review of how to improve productivity across a range of areas, including planning and higher education, has been criticised by campaigners as the death knell for zero-carbon homes.



Energy conservationists are angry at announcements in the productivity paper released on Friday, which drops plans for higher on-site energy efficiency, as well as a separate target for zero-carbon emissions for non-domestic buildings by 2019.

The productivity paper is the product of two months of thinking by the new business secretary, Sajid Javid, and represents a sharp change of course from the industrial strategy of the previous business secretary, Vince Cable. Javid said boosting UK productivity was “the economic challenge of our age”.

Julie Hirigoyen, chief executive of the UK Green Building Council, condemned the sudden announcement on low-carbon homes smuggled into a wider package designed to boost housebuilding by relaxing planning laws. She said: “Let us be in no doubt this announcement is the death knell for zero-carbon homes.

“It is short-sighted, unnecessary, retrograde and damaging to the housebuilding industry, which has invested heavily in delivering energy-efficient homes. Britain needs more housing, but there is no justification for building homes with a permanent legacy of high energy bills.”

Philip Sellwood, chief executive of the Energy Saving Trust, said: “A highly energy-efficient housing stock needs be central to the government’s vision of the UK’s infrastructure, looking to 2050 and beyond. We are very disappointed with this decision.

“This decision is not in the interest of UK productivity. Under the Climate Change Act, we have to achieve at least an 80% reduction in the carbon emissions from our homes by 2050. We need to be building homes now that are 2050-ready. It’s hardly the productive choice to be building less efficient homes now and then refurbishing them with insulation and renewable energy systems in 10 or 15 years’ time.”

Initial interest in the productivity plan, entitled Fixing the Foundations, focused on proposals to short-circuit housing planning controls on brownfield sites, and whether this represented abandonment of the old Conservative commitment to localism in planning.

Javid indicated that local councils would lose some powers, and said: “If a council fails to produce a new housing plan, we will have it done for them.” He said automatic planning permission would be granted in some brownfield areas designed for housing.

In an attempt to increase housing density in London, Javid will allow homeowners to build as many as two extra storeys without needing normal planning permission, as long as local residents do not object. The London mayor will have powers to call in housing plans with more than 50 homes.

Figures from the Office for National Statistics (ONS) on Friday showed that the number of new housing starts in the UK had slowed at its fastest pace for four years. The figures showed a 5.8% fall in new building, the biggest drop since October 2011, helping drag the wider construction sector to a 1.3% contraction.

In a sign that George Osborne is not going to abandon the past five years’ efforts to push through faster infrastructure investment. He said a national infrastructure plan covering key areas – transport, energy, flood defences, water, waste, communications and science – would be published annually. A business tax roadmap will be published by the autumn to reassure business about the pace of further reforms.

Osborne has asked large institutional investors to give new commitments to support companies investing for long-term growth and challenge those that are compromising long-term competitiveness and productivity.

Some of the country’s most senior business leaders, convened by Sir Charlie Mayfield, chairman of the John Lewis Partnership, have agreed to head a business-led action group for productivity. The group will report to the government by the end of the year.

Osborne has embraced plans submitted by economist Prof Alison Wolf to reverse a trend of employer underinvestment in training by imposing a compulsory training levy on employers.

The report says: “There has been a rapid decline in the amount and quality of training undertaken by employees over the last 20 years, in part due to employer concerns that if they invest in training their employees, competing firms will free-ride on their investment. This needs to change.”

The report says an unspecified levy will be imposed to fund training, as already in place in Germany, France, Denmark and more than 50 other countries.

“The levy will apply to large employers and will support all post-16 apprenticeships. In England, any firm will be able get back more than it puts in by training sufficient apprentices. The government will put control of the funding in the hands of employers via the digital voucher scheme, to ensure that it delivers the training they need,” the report says. Details will be published in the autumn.

Osborne and Javid lay out plans to open up the universities sector by allowing “new providers” to compete on a level playing field with established universities. The government will introduce a clearer and faster route to degree-awarding powers for those assessed to offer the best quality education.

“The government will explore options to allow the best providers to offer degrees independently of existing institutions before they obtain degree-awarding powers, the report says.

The government will free up student number controls for the best alternative providers by introducing a performance pool of places from 2016/17, which will allocate additional student places.

On housing, the government says it will publish league tables, setting out local authorities’ progress on providing a plan for the jobs and homes needed locally. Where they are not doing so, ministers will intervene to arrange for local plans to be written. Any council that fails to complete 50% of planning permission applications on time will have its responsibilities removed. Councils say government cuts have left planning departments struggling for resources and talented staff.

In line with proposals set out by the Labour party, the government will impose a duty on local authorities to co-operate on big housing and planning decisions to ensure housing growth occurs.

The government has already committed to legislating statutory registers of brownfield land suitable for housing in England, and ministers will now legislate to grant automatic permission in principle on brownfield sites identified on those registers.

The report contains details of some further welfare changes, including new sanctions on younger claimants and a new obligation on 18- to 21-year-olds receiving universal credit.

The strategy paper says, in the context of the extensive childcare support offered to parents of three- and four-year-olds, that the conditions for parents claiming out-of-work benefits should be tightened. From April 2017, parents claiming universal credit will be expected to look for work from when their youngest child turns three, and to prepare for work when their youngest child turns two.