The next item, therefore, is a statement by the Minister for Local Government and Public Services—. No. That looks wrong to me. The statement by the Minister for Housing and Regeneration, Rebecca Evans—an update on year 2 of the innovative housing programme. Sorry to panic you, Cabinet Secretary. Rebecca Evans.

Diolch, Llywydd. I am very pleased to be able to brief Members on the second year of the innovative housing programme. The Welsh Government has prioritised Housing because prosperity is not just about material wealth, it is about every one of us having a good quality of life and living in strong, safe communities where individuals and businesses flourish. Building good-quality housing, and more of it, is fundamental to achieving these ambitions.

We're determined to increase the number of homes available, increase the rate at which they’re delivered, and improve the quality of homes built so that they're able to meet changing needs and expectations. We must also ensure that we are building not just for the tenants and the residents of today, but for future generations. We need to reduce fuel poverty, reduce the impact of house building on the environment, and reduce health and well-being inequalities, which are exacerbated by poor-quality housing. So, done the right way, we have an opportunity to build high-quality, near-zero-carbon homes, capturing and boosting the skills and expertise within the Welsh construction and manufacturing industries. 

Achieving our ambition will require a radically different way of working, for us and for our partners. It is clear that if the scale and pace of house building is to increase significantly, traditional approaches are unlikely to deliver on their own. A fresh approach is required, which is why, last year, the innovative housing programme was launched. The programme aims to stimulate the design and delivery of new high-quality, affordable homes, through new housing models, new delivery pathways and new construction techniques. Organisations are challenged to develop fresh thinking for delivery sooner rather than later, to address issues such as fuel poverty and demographic change, and to help us meet our carbon reduction targets. Currently, the programme has invested in 20 new models and new approaches to building social housing and affordable homes, and 276 houses are under way and due for completion.

The level of interest in the IHP continues to grow. This year we received nearly 40 per cent more bids for funding. We also opened the programme to the private sector to submit bids, and I welcomed the positive response from a range of organisations who are prepared to join with Government in the search for future housing solutions. In total this year, 48 bids for funding were received. An independent panel was tasked with assessing the schemes to identify how far they offered the innovation and the value required for the scale of change we want to see. I'm grateful to the panel for their work, and I'm delighted to say that Welsh Government has decided to fund 26 schemes this financial year.

Subject to completing the necessary due diligence checks, I will be making available almost £43.1 million to build 657 homes. All successful applicants have been informed and a full list of the successful schemes will be on the Welsh Government website shortly.

I'd like to take this opportunity to tell you about a few of schemes that will receive investment, to give you a flavour of what we will be funding. We will be supporting a new 10-storey cross-laminated timber tower with vertical greening, creating 50 new homes in Cardiff. It shows real ambition from the housing association concerned to submit a scheme that will be a UK first. The material used is both sustainable and low carbon, and it will also have a much shorter construction phase, estimated to be only 12 weeks. We will also be funding another scheme using dowel-laminated timber, on a smaller scale, so that we can compare and contrast the two construction methods.

There will be a new factory in north Wales. We will be funding three schemes in north Wales that will together establish and support the provision of a new local factory that will deliver new local jobs and training. The timber-framed homes built at the factory will be Beattie Passive accredited, using high-performance insulation, and will be draught-free to eliminate heat loss. The factory will create homes with very low environmental impact and reduced fuel costs for tenants.

Support is being made available for a green energy model housing co-operative. We will be funding a housing co-operative from first principles development, which will see the main contractor, who is already based in Wales, building residential homes for the first time. The scheme will focus on the utilisation of green energy technologies for communal energy generation, to reduce running costs, service charges and overall carbon emissions.

There will be a large development of energy-positive homes. Investment in Parc Eirin will deliver 225 new energy-positive homes that will achieve near-zero-carbon emissions. For part of the year, the homes will be a net exporter of energy, contributing power to the national grid, and fuel poverty will be eliminated for these tenants. The scheme will demonstrate that we can deliver at scale and produce a replicable financial model for future housing development of this scale.

Support is being made available for a project involving healthcare delivery and education delivery through the medium of sustainable home construction. Six timber-frame homes will be delivered in a collaboration between a housing association, a charity and the local health board. The homes will be constructed by adults from a range of vulnerable groups, including people with traumatic brain injuries, asylum seekers, refugees and homeless people.

I'm pleased that 22 out of the 26 schemes incorporate timber into their proposals, as the Welsh Government is committed to supporting the timber industry in Wales to play a more prominent role in the construction and manufacturing of affordable homes.

Innovation is never without risk. I'm not expecting every scheme to provide the long-term solutions that we're looking for. But I know we must do something different. All the schemes will be subject to robust monitoring and evaluation so that we can learn what works best and why. This includes asking tenants and residents about their experience of what the homes are like to live in.

Turning to next year, I want the programme to push the boundaries on both the type and the scale of innovation. I expect to see more beauty in home design, more innovation in supply chains, as well as more exciting collaborations between housing associations, local authorities, private and public bodies. Only by doing this will more homes be delivered more quickly, to meet the needs and aspirations of people in Wales now and into the future. 

I welcome the continuation of this programme, and I am pleased to see that it's now being opened to the private sector. I think when it was announced last year there was a general feeling around the Chamber that this was a very positive development, and I see no reason to change that initial assessment. 

I particularly welcome the emphasis on building design, because if we are to build for future generations we need to build well. And can I congratulate the Minister? I think it's the first time I've ever heard the word 'beauty' used in reference to a public policy. So, I agree with you that we do need more beauty in building design, especially as we turn to a more modular type of building, because it is innovative, and it can be used in ways that will mark ways out, then, in terms of its quality of design.

Could the Minister outline how this programme will link to the UK Government's industrial strategy challenge fund, which last month awarded £36 million to Swansea University's SPECIFIC Innovation and Knowledge Centre? That grant will help turn homes and public buildings into mini power stations, and has a particular aim to accelerate market adoption. And I'm sure that those are core aims also of this programme. And it's important that these various initiatives are linked up as much as possible. 

I would like this—. Not mentioned in your statement at all, the next point—how will the innovative housing programme inform the work of the affordable housing review? And will it play a role in assessing how innovations can be delivered at scale, which is one of the main tasks you've given to the housing review?

Can I finish by emphasising that when we're looking for innovations, it is appropriate to take, with due diligence, certain risks? I do think that is something that should be programmed in to this initiative. And not every innovation will reach the market. Indeed, sometimes, what reaches the market and gets used is not the best innovation, for a whole host of reasons. So, we do need to cover our bets, in a sense, and cover a range of initiatives and use the fund in that way. But I would like to know a bit more about how the monitoring and evaluation mechanisms are going to be used to assess the programme, though, obviously, I'm delighted that tenants are going to be a core part of that assessment.

Thank you very much for those questions and your support, again, this year for the innovative housing programme. I'll begin with the final point you made, which was about how we will be monitoring and evaluating the programme. One of the exciting things about the innovative housing programme is that all applicants for funding must agree to an open-book policy. So, that will include regular progress reports to the innovative housing programme working group. They must agree to monitoring during and post construction. They must agree to data collection, so particularly on issues of cost and performance. And then they must agree to the public dissemination of the lessons learned through their projects. So, the specific things that we'll be looking for in the monitoring and evaluation will be about the technical side of things, the performance of the buildings, the construction experience, and, as you've recognised, the tenant-based work as well.

So, simple questions: do the tenants like their home as a pleasant and comfortable place to live? Are the homes flexible to accommodate current and future lifestyles? Are they low energy for occupants to live in? Are they low cost for occupants to live in? Would these homes be affordable to build in future? Can they be built at pace? Can they be built at scale? Are they well built? Are they affordable to maintain in future? And does the overall development create a good place to live? So, these are the kind of questions that we will be asking through part of our work to undertake the monitoring and evaluation. 

You referred to the affordable housing review, and this work, very much, is going along in parallel with that and is informing the work of the affordable housing review. As you'll be aware, underneath that review, there are several work streams that are looking at specific areas that need attention if we are to increase our ambitions for the building of affordable housing in future. One of those work streams is about standards and the development of quality requirements. So, we'll be looking at to what extent our existing standards are correct and where they might need changing if we are to build in different ways in future. And there's also a specific work stream looking at construction supply chain, including modern methods of construction. So, this work stream will consider how the supply chain, right across the modern methods, will work and how we can scale that up in future as well. What's the capacity? Are there skills shortages? These are all questions that that particular sub-group will be looking at. 

You referred to the excellent announcement recently regarding the funding that SPECIFIC and Swansea University have secured. Welsh Government was really pleased to provide supporting letters to that project and is delighted to be able to provide £6.5 million to support that project as well. There are a couple of our projects that we're announcing today that relate specifically to the SPECIFIC development, and one is land at Park Yr Helyg, Colliers Way in Swansea. That will be a homes-as-power-stations project, combining renewables—so photovoltaics, batteries, ground source heat pumps, mechanical ventilation with heat recovery—and also using what's called a Swansea standard fabric first timber frame. And that is a collaboration between SPECIFIC and the Swansea city deal. There's a second project as well at Crown Way in Llandarcy, which will be an innovation park to showcase modular and volumetric house building and to compare the systems and compare some of the learning that we have here in Wales with what is experienced overseas. So, this is an interesting part of the research and learning of the project, so it's very much linked into the active homes work that's already been announced.

In terms of design, I think it is really important that we have high aspirations and high ambitions for our affordable housing and social housing. It should be our goal that people who live in social housing live in beautiful housing that everybody can be proud of. When we see surveys, community—sorry, the Chartered Institute of Housing undertook a survey recently. People who live in social housing are proud of it, they're proud of their communities, so let's try and build the most beautiful houses that we possibly can for those communities. So this is, again, something that the affordable housing review is looking at but something that I want to have a greater focus on in year 3 of the programme.

And then, I should mention that, in devising the technical specifications for the innovative housing programme, it was done with a steering group, which was chaired by Gayna Jones of the Design Commission for Wales. So, we certainly have a strong focus on good quality design.

And finally, I was really pleased to be able to open this up to the private sector this year. I'm really keen to have a strong focus on supporting SMEs particularly to return to house building. They left house building some time ago and have been concentrating on renovation work and so on, but I think they have a really strong role to play in the future of house building. Of course, when housing associations are building homes, when homes are being built through our innovative housing programme, it is SMEs that are partnering with them to deliver that. So, I think that this is another string to our bow in terms of supporting SMEs alongside things like the property development fund and our work on stalled sites.

I'd like to thank you for this statement, and I'm encouraged by it. It's clear that the chosen schemes will add up to 657 new homes, rather than the 276 built last year, and the budget for this has increased considerably. In the past, I and my colleague Siân Gwenllian have called for the scheme to be more ambitious in its target and scale, and significantly more than doubling the number of homes is a good start. So, it's important to welcome that and to note when we are making good progress.

It's important to note that this should play a part in the wider approach to affordable housing. Six hundred and fifty seven new homes out of a target of 20,000 is an improvement on last year's total. I understand that part of this process is identifying what will work and what will not in order to support larger schemes in the future. Will you commit that next year's budget for this programme will increase if demand increases again and, crucially, if opportunities are identified to fund much larger projects? I understand that money is tight, but this could be an investment that saves in the longer term. Further to that point, if you're able to tackle the prospect of climate change—and reports recently suggest that this is becoming an increasingly dire and urgent challenge—innovation has to be part of this. If you want to move to a green energy future, and that is achievable in terms of power generation quite sooner than many people think, if we commit to it, we must also be smarter about that energy use and use less of it, and this sort of scheme is important as part of that whole holistic picture.

You mention innovation in the supply chains, and I would like to ask specifically what's being done to achieve that. I understand that more timber and sustainable materials are being used. What other materials are we looking at? Are we increasing our use of traditional Welsh materials, such as slate, for example? Last year, when the late Carl Sargeant delivered this update, David Melding pointed out the cost of using more bespoke designs and materials, so is there movement on bringing down those costs, and are there options to speed this up?

I'd like to know a little more regarding using innovation on a much larger scale, too, because, as has been noted, innovation comes with a cost, and if we are going to produce homes such as those on a much larger scale, to really make an impact on how sustainable this industry and the housing sector can be, it's important we try to identify methods that can be produced on a more mass scale.

So, I have those questions but, generally, we thank you for the statement here today.   

Thank you very much for your welcome for the statement, and also for your comments. The overall budget for the programme over the three years stands at £90 million. However, there are plenty of opportunities here for the innovative housing programme to work with other funds of money. So, the social housing grant, for example, has been used in a number of the projects that we're announcing today in order to create a package of support. Some elements will be given funding just for the innovative element, whereas others will be for a larger part of that project as well. So, there are, again, innovative ways we can look at financing the projects.

You referred to the importance of making sure that these projects really are about the whole supply chain and not just about the end delivery. There's £4 million, for example, for Cartrefi Croeso Ltd. They're building 30 homes in Burry Port. They're using Welsh timber and also local offsite manufacturing, using local labour. Also, alongside that, then, they'll be using the Tŷ Solar panels, manufactured in west Wales. So, wherever possible, there's been work going on to ensure that delivery is based on a very local footprint in order to both benefit the local economy, but also reduce that carbon footprint as much as possible. There are several great examples in the schemes that have been announced today as to how those supply chains have been sought to be made as short and as local as possible.

In terms of timber, you asked whether it is just about timber. No, there are lots of other innovative materials that are being used. So, the Stackpole infill project in Pembroke will be a system designed as an over-55s apartment block, and Welsh timber will be used there, but also clay-based paints for a low pollution, carcinogen-free environment will be used as well. So, we're trying to look at all opportunities, not just in the outer construction of the frame of the building, in order to use greener approaches, if you like.

The issue of decarbonisation of homes is a huge issue. The innovative housing programme gives us some of the answers for the future, but it certainly doesn't help us in terms of the existing housing stock we have which is, as you know, some of the oldest and least thermo-efficient housing in Europe. So, this is one of the reasons we've established the advisory group on the decarbonisation of existing homes, and we've tasked that to help us shape a programme to realise our decarbonisation ambitions in the existing housing stock. Now, that's going to involve a lot of retrofitting work, and it won't be just the part of Government to do that; this is something where we will have to work alongside mortgage lenders, planners, the construction sector but also individuals as well, so that when people are thinking of investing in their home, actually, they see investing in the energy efficiency of their home as attractive as investing in something more, perhaps, tangible, such as a new bathroom or those kinds of things. So, it is going to take a big shift, I think, in terms of people's expectations and their willingness to engage in this agenda. It's certainly a journey that we're starting along. 

Our ambition was to create 1,000 affordable homes as part of our 20,000 affordable homes through this project. What I would like to see ultimately, though, is these kinds of models of construction becoming much more mainstream. So, this isn't by any means a niche project; this is a trailblazer, really, I think, to help us revolutionise the way we build homes in Wales. 

Thanks, Minister, for your statement today. I agree it's a promising programme, and it'll be interesting to see how far you can progress it and how much impact it will ultimately have on your housebuilding targets. I'm glad you see a big role in this for the SMEs. I think that's a welcome development. You mentioned the skills shortage that we do have in the construction industry in general, and with innovative housing there may well be certain specialist skills that are needed. So, how far can you ensure that we are making every effort in Wales to train Welsh people to do these jobs and to help progress with your programme for innovative housing? There's also an issue of where we build the houses. There is a need to make sure we use brownfield sites as far as possible, so do you recognise that need and are you doing as much as possible to utilise the brownfield sites?

I think we recognise that innovation can take many forms and there are many different kinds of schemes. I know you're investigating lots of different models and that only some of them eventually come to fruition. So, innovation is good. I note that, last year, there was a Tesco built in London where, as one of the planning conditions, they had to provide flats above the store. That was the first scheme of that kind that I'd heard of. That's only an example, but are there innovative ideas like that that can be used where we tweak the planning conditions so that we get more types of innovative housing? Thank you. 

Thank you very much for those questions. I certainly would like to see a planning system that does enable innovation in housing. We have an opportunity here with the review of planning and housing, which the Cabinet Secretary for environment, under her responsibilities for planning, announced earlier in the summer. I think that this is a chance really to put innovation at the heart of our thinking in terms of our planning system for housing.

In relation to skills, I'm really aware that this is an area—naturally, of course, because it's an innovative area—where we don't have the skills necessary to scale this up at the pace we would like. This is why it's important that we're working with the regional skills partnerships on this agenda and these are very much at the centre of the Welsh skills policy agenda. So, the regional skills partnerships, I can confirm, have considered the low carbon agenda during the development of their annual reports for this year. I know this is a discussion that is ongoing between the skills officials and the regional partnerships and others.

Certainly, we need colleges to be thinking in terms of what they can be doing to ensure that people are coming forward now with the skills for innovative housing. It is a very different kind of skill that's needed. I visited a few of the factory developments where innovative housing has been created, and they were really keen to impress on me how important precision is when you're building innovative housing, because you're building components that will be put together on site, and actually there's no room for error at all in terms of where the bits fit together and so forth. So, it is a new set of skills but it is an area where we're very much working across Government to ensure that we're ready to meet that challenge. 

Again, on the issue of brownfield sites, we've seen lots of projects coming forward filling in sites where building hasn't happened before. We're really keen to work with the local authorities and the housing associations to ensure that they have access to the land that they need in the places that they need it. One of the projects that we do also have is the land for housing fund. This is several million pounds of funding, which is grant funding for housing associations in order to help them purchase the land that they need in order to do the building work that's required in terms of meeting our ambitious targets for housing. 

I'm sure Carl Sargeant is smiling benignly on us today because it's just short of a year since he announced stage one of this fantastic innovative housing project. I'd really like to congratulate the Government for pushing ahead with this and more than doubling the number of houses that we're going to be building. I'd like to talk about one of the projects that you mention in your statement, which is the one on City Road in my constituency—£9 million to a housing association called Linc Cymru to build a fantastic 10-storey building, 50 homes made out of cross-laminated timber. It's on the site of an old furniture warehouse that caught fire a couple of years ago, so it's going to be regenerating a brownfield site in an area that is plagued by air pollution. This building, as it's proposed, is going to really help tackle that level of air pollution. There are very few green areas in the area, so it's fantastic that each of these 50 flats are going to have their own green balcony, with vertical gardens, as well as a two-storey garden on the top for residents to share collectively. It's all based on the Bosco Verticale in Milan, which is two tower blocks that contain 900 trees. This is obviously not that ambitious, because the site is not that big. But I'm sure that this is going to be the way forward for the type of housing we're going to need in our cities. I'm really excited by it. In fact, this cross-laminated timber uses a lot less carbon than the Bosco Verticale, and is also going to take a lot less time to construct. Linc Cymru's even talking about building a storey a week, based on the fact that a lot of it will be prefabricated in the factory. So, absolutely fantastic, and thank you very much indeed for making the money available.

In light of the success and the interest in all the innovative housing projects that you've received, I just wondered why we can't go a bit faster on implementing the recommendation in the 'more│better' report, which said that buildings need to be delivered in shorter timescales with lower embodied energy and be carbon storing whilst having an ecologically positive impact. Well, this tower is going to do that, and I wonder when we are going to get around to amending the building regulations to put a stop to the unimaginative, difficult-to-heat and overpriced homes that large private house builders in Cardiff are continuing to put up. So, I do hope that you'll be able to reassure us that we are now going to push ahead with the sort of energy-efficient building regulations that were torn up by the Tories in 2015.

Thank you very much for your questions and for your enthusiasm for the project in your constituency, which is obviously going to be a UK first—it's really exciting to have those vertical gardens and so on. You refer to it as a project that is regenerating the area, and what I think is particularly exciting about the innovative housing programme is that it's not innovative housing in a bubble; it's innovative housing as part of our wider Welsh Government agenda. So, the £1.9 million for Newydd Housing Association to build 23 homes as part of the Goods Shed development in Barry will actually include spaces for start-up businesses along the same lines of that which we see in the TramShed, which, if anyone's had the opportunity to visit, is a fantastic regeneration project, and it's the same people behind that that will be undertaking that particular project. Also, one of the projects in north Wales will be making adaptable, moveable pods, built to passive house standards, for single occupancy by homeless people. So, this is addressing some of our urgent need for intermediate housing for people who are currently rough-sleeping. So, that's another exciting project. And, of course, the over-55s apartments that I referred to earlier again are about creating houses that are appropriate for people as they get into older age and as needs change, and so on. We have, again, a dearth of appropriate housing for older people. So, this really is about trying to ensure that we're linking up across Government in terms of achieving more than one thing with this innovative project.

Timber is involved in 22 of the projects. People always tell us that you can't build houses with Welsh timber, but I think this project is certainly proving that not to be the case. We certainly know that, alongside using the timber in the projects we have, in parallel there's work going on at several universities that is showing what can be done in terms of treating Welsh timber in order to strengthen it so it can be used in even greater amounts in Welsh housing as well.

On the issue of building regs, I'm afraid that's the responsibility of my colleague, and I will ask her to write to you with the assurance that you're seeking.

Thank you, Minister.