We'll move on to the short debate. I call on Huw Irranca-Davies to speak on the topic he has chosen. 

Diolch, Dirprwy Lywydd. In this debate, I will set out the urgent need to produce a Government-backed and co-funded scheme to remediate the sub-standard installation of external and some internal wall cladding to homes in Caerau in my constituency under the 2012-13 community energy savings programme/Arbed 1 programme, and to make good the damage done to people's homes and lives.

This is an issue of natural justice. Almost a decade ago, residents were promised warmer and more energy efficient homes with lower bills. In the worst cases, they've ended up with extensive damp and mould and deteriorating conditions, where the defective installations have damaged not just their homes but their lives. So, Minister, I ask the Welsh Government to step in and play a lead role in resolving these issues, because, quite simply, no-one else can now do this.

I am aware that there are other examples of sub-standard insulation in other parts of Wales, and indeed in other parts of the United Kingdom, but my argument, though, to the Minister, and the argument of residents in Caerau, is that the scale of damage in Caerau, the sheer numbers of homes affected and the length of time this has been going on for, mean that a scheme is now urgently needed to resolve these issues. It is long overdue. We need to resolve this now.

At the very outset, let me restate my support for the crucial importance of good-quality retrofitting of older and colder and energy-inefficient homes. In fact, in July, the Future Generations Commissioner for Wales scoped out the huge scale of the challenge, but also the huge benefits if we make the right decisions on retrofit and energy efficiency. She argued that fuel poverty could be eradicated in Wales by 2030, with a £15 billion—in her words—game-changer investment to retrofit homes to reduce energy and heating demand, saving bill payers hundreds of pounds a year in their bills and £8.3 billion a year on bills by 2040, improving and modernising Wales's huge stock of older housing, creating 26,500 jobs every year by 2030 in communities right across Wales, saving the NHS £4.4 billion by 2040, and helping the Welsh Government meet its legal duties of net-zero carbon emissions by 2050. 

The report highlighted that Wales has some of the oldest and least efficient housing in western Europe, and that around one in eight of Welsh homes is in fuel poverty. It noted further that Citizens Advice reports that more than 66,000 households in Wales have fallen behind on their energy bills since the start of the pandemic, and that disabled people are four times more likely to be in energy debt. The report also highlighted analysis by the National Institute for Health and Care Excellence that vulnerable people living in a cold home have an increased chance of serious illness and bad health or death, and are at higher risk of heart attack, of stroke, of breathing problems, of flu, of depression and falls. So, the case for good energy efficiency, including retrofitting, is clear. It's compelling, it's urgent. But to have confidence in the next steps on that essential journey, we also need to give people confidence that when things go wrong, as they sometimes will, then things will be put right quickly and efficiently. This has not been the case in Caerau and in some other places in Wales and the UK affected by poor installation of internal and external wall cladding. 

There was an independent assessment published in July 2020 of just 36 sample homes in Caerau, which were part of that 2012-13 community energy savings programme/Arbed 1 energy efficiency programme. It reported that all of the sample of 36 homes surveyed—all of them—were found to have some form of defect caused by poor workmanship. Regardless of whether they were taking part in a Bridgend County Borough Council, Welsh Government, or UK Government scheme—regardless—the total cost of repairing all the homes in Caerau is estimated at anything up to £1.1 million. I've argued consistently to Ministers for some time—to this Minister and to previous Ministers in the last Senedd term—that the resolution must lie in a co-funded scheme, drawing on contributions in funds or operationally from all those who had a part to play in the 2012-13 schemes. That must include UK Government and Welsh Government, the UK regulator, as a proxy for the large energy companies that levy-funded these schemes, and local authorities involved in administering parts of the schemes too.

The Welsh Government have, indeed, recognised the problems that can arise and that did arise from some of the early schemes. In 2018, Welsh Government commissioned a report entitled 'External Wall Insulation (EWI) Project guide: Procurement guide for EWI, tailored for Local Authorities and RSLs'. To set the context, it noted that approximately a quarter of dwellings in Wales are of solid-wall construction, one in 25 are non-traditional system build, and just over one in 10 are narrow-cavity construction. It notes that

'Improving the thermal performance of dwellings with these wall types is done by applying insulation to either the internal or external façade'. 

It notes that these are a

'significantly more costly process than the more common improvement measures mentioned earlier. It can however considerably reduce energy bills and improve comfort in such dwellings.'

So far so good. But just to note that the majority of defects and damage in Caerau have involved exactly this type of installation, mainly with external wall cladding, but some with internal wall cladding too. So, I and residents note with interest that this report I refer to goes on to say, and I quote:

'Unfortunately, recent studies have identified instances of undesirable side effects when homes have been retrospectively insulated, affecting both cavity and solid wall dwellings. This has resulted in increased condensation and mould growth in dwellings and subsequent damage to the building fabric.'

It goes on to detail common underlying causes that include poor procurement, installation and maintenance. They actually include all of the factors that my constituents will be familiar with in Caerau, such as poor surveying standards from the outset; lack of a robust design system; selections of properties inappropriate for the chosen measures; poor specifications; no details employed to address the levels of exposure or the potential for thermal bridging; lack of on-site quality checking; and lack of ongoing checking and maintenance following the installation works.

So, Minister, the Welsh Government guidance that I refer to is aimed at correcting previous mistakes by strengthening guidance on the use and commissioning of retrofit energy efficiency measures. It's very, very welcome. But, it carries an implicit recognition that things have been going wrong, even if the majority of installations across Wales have gone well. And, it comes as little comfort to my constituents, who are left with the errors of previous early schemes.

So, at this point, let me reiterate: No. 1, there is a clear and compelling and urgent need to continue with the retrofitting of older properties, as the future generations commissioner has laid out, and to do so at increased pace and with increased urgency; but that No. 2, this needs to be done in a way that learns the lessons of where things have gone wrong, and avoids repeating those mistakes; and that No. 3, most importantly, there is an equally clear and compelling need to put right the wrongs of past schemes and to do it now. Unless we do this, the confidence in new schemes will be shaken, at best.

So, the revised guidance that I referred to above has sought to strengthen procedures and practice and standards. The Minister will no doubt also want to refer to the optimised retrofit programme as another key step in doing retrofit well, with the right installations, in the right properties, by the right installers, with the right oversight, and with the right protection for residents. But, this doesn't remedy the historic and enduring problems for my constituents in Caerau, and nor for others across other parts of Wales and in the UK, for that matter, where cladding has gone wrong.

So, Minister, the focus must be now to remediate those properties where things have gone wrong, regardless, frankly, of who caused the problem in the first instance. That is why, on behalf of my constituents affected, I call on the Welsh Government today to help resolve this.

The Minister and I—and her predecessor, indeed—have discussed this in detail, and the many hurdles. In this example in Caerau, as with so many, the original installers have long ceased trading. Trading Standards have consequently been hamstrung on this matter, as the companies have disappeared. We have the added complexity, in the absence of the original companies and the inability of Trading Standards to pursue this, of no other legal entity accepting responsibility, to the long-running frustration of myself and the frustration of residents—and, I suspect, of Ministers as well.

So, while this 2012-13 scheme was originally co-funded from the larger energy companies under their ECO obligations, those energy companies of course argue that they have nothing to do with this at a local level. The national UK regulator that oversees the energy and the ECO obligations argues the same. They are too high up.

At a national level, these installations in Caerau were driven by both the UK Government under the CESP and ECO schemes, and the Welsh Government under the Arbed scheme, further complicating the picture. My understanding, though perhaps the Minister can confirm or refute this, is that as many as four out of the five Caerau installations were indeed under the UK schemes. But, that still leaves one out of five under the Arbed scheme.

At a very local level, some—though not all—were administered by the local authority, Bridgend County Borough Council, though they contend that the problems are due to the installer, as the reports have shown, not the procurement process and the awarding of contracts or oversight of works. I should refer as well, but without mentioning in detail, to the fact that there is a parallel ombudsman inquiry going on into aspects of the original award of contracts.

But, you know, for residents affected, this complexity is irrelevant. The solution to them is blindingly obvious: somebody needs to step up and make good the damage done. It is long overdue. So, Minister, let me ask some very specific questions. First of all, I welcome the council's stated ambition, which they have confirmed with me, which is to agree a comprehensive scheme with the Welsh Government that seeks to consistently and fairly address the issues in all of the properties affected, however that work was originally funded. Minister, would this also be the intention of Welsh Government?

Minister, you wrote to me earlier this year confirming that you had—and I welcome this—invited Bridgend County Borough Council to put forward a proposal to resolve the issue following earlier discussions, and I understand this was received by you on 6 September. Could you confirm this, and give us an update on progress?

Could the Minister also consider, in any future remediation scheme, that Welsh Government will need to underwrite any risk assumed by the local authority and, of course, by the local taxpayer?

Could you give us, Minister, an update on discussions you’ve had with the energy regulator and with the UK Government on their role and potential contributions to any remediation scheme? And, Minister, will you be asking the UK Government to contribute to any remediation scheme so that the burden does not fall entirely on the Welsh budget or on local taxpayers in Bridgend?

And would she further agree with me, and indeed the local authority, that there are significant risks from further delays to not proceeding with the work at all, including further damage to the homes in Caerau, caused by the poor-quality, original workmanship on the installed measures; the wider significant negative impact on public services due to the potential, possibly, to need to rehouse families if their homes become unfit for habitation; and further negative impacts on health and social services dealing with the well-being consequences of this situation?

Finally, in addition to the subsequent strengthening of standards on installation and procurement, which I referred to earlier, would the Minister agree to consider, very carefully and in detail, the Construction Industry Training Board proposals for an insulation apprenticeship qualification in Wales; the need for detailed skills plans for retrofit, including new standards and qualifications; the need to develop and enforce new quality systems, skills, and competency requirements in advance of the next round of contracts; and any other ways to strengthen the quality of delivering good building insulation?

And finally, finally, if, for whatever reason, you cannot, Minister, give me the full answers on a remediation scheme today because you’ve got to wait for budget decisions, or because you’ve not yet had the final advice from officials on the proposals from Bridgend County Borough Council, then will you at least agree to seek resolution to these matters rapidly and report back to the Senedd, to me, and to my constituents at the very earliest opportunity?

I’ve made clear, Minister, that we need, absolutely, to continue the roll-out of energy efficiency measures, including and especially in some of the older housing stock, where fuel poverty and energy inefficiency is most marked. But to do so we need to restore confidence, and that means putting right the mistakes of the past, investing too in better skills and better standards for the future. So, Minister, my constituents' homes and lives were damaged by poor installation measures in a scheme backed by UK and Welsh Government, with significant roles played by the regulator on high and the council at local level, supported by levies from the big energy companies. With these players all involved to some degree, they and I had every reason to believe their homes would be enhanced. They’ve been let down. The root cause may, Dirprwy Lywydd, be poor or inappropriate installation, but the solution lies beyond the installation companies who’ve long gone. The solution lies with us, in partnership, to bring forward a scheme. I ask for your help and the help of Welsh Government in doing this.

Thank you very much, Huw, for raising this important issue. Today’s debate follows written questions in September, our meeting on 29 September, and our exchange in Plenary just a week ago. Your passion to pursue a conclusion to these unfortunate events is very admirable and a testament to your commitment to your constituents.

Let me begin by saying that, of course, the health and well-being of the residents in Caerau, and especially those adversely affected by the scheme, are of great concern to the Welsh Government. Since you and I last discussed the issues facing residents in Caerau, we made some progress, but I recognise and share your frustration and that of your constituents that action has not been taken quickly enough to resolve the difficulties generated as a result of the UK Government community energy saving programme scheme. And I know, and you’ve set out today, that this is a very complex issue and one that has been made more difficult by the lack of a decision from the Westminster Government.

For those Members of the Senedd who may not be aware of the details, just to underline the main points made in the representations by the Member, Bridgend County Borough Council were successful in their application for funding from the UK Government community energy saving programme scheme, which ran between 2009 and 2012. The scheme involved energy companies improving energy efficiency of homes. The funding was used to install energy efficiency measures, which included the installation of external wall insulation, boiler replacements and thermostatic radiator valves and controls. However, since the project completed, complaints have been received by local authorities about the quality of the workmanship, damp penetration and mould. The local authority survey undertaken on the homes in 2018 clearly shows the workmanship fell well below the standard expected for 104 homes, impacting on the health and well-being of home owners. The home owners have been unable to pursue the installers that carried out the work to complete the remedial work, or seek damages. The companies, as Huw Irranca-Davies has pointed out, are no longer trading, and no guarantees or warranties were provided as part of the UK Government scheme.

This serious issue has been acknowledged by Ofgem in meetings with my officials. The local authority has actively explored funding remedial work with the energy suppliers who funded the original works. The Welsh Government hosted a round-table to discuss the issues between the local authority and the scheme administrator, Ofgem. Despite our best efforts, these has been unsuccessful, but we continue to press the case on behalf of the householders affected.

In the meantime, our officials have been working hard with Bridgend County Borough Council. Last month, we received an outlined business case seeking financial support to repair the 104 owner-occupier homes. I understand it's the local authority's intention to project manage the reinstatement of the properties to a fit state, supported by funding from themselves and from Government. It's obviously not right that residents should have to meet the costs for remedial work. In some cases, the cost could be around £30,000—a sum totally out of reach for some of the lowest income households in Wales. Unfortunately, I am yet to receive the advice from officials on the decision to fund the scheme based on the business case submitted, but I will, of course, update the Member and the Senedd when I do. However, he will be aware that the comprehensive spending review has been disappointing for Wales. This will mean taking difficult budget decisions that must be considered in the round. To be very clear, the works funded through a UK Government scheme failed to provide the necessary assurances and safeguards for home owners. I've been clear in my representations to the UK Government that it is their responsibility to make funding available for remedial works to be undertaken. The initial response from the UK Government suggested householders contact Citizens Advice for support. This is a clear dereliction of responsibility, and I wrote again to Lord Callanan on 29 September to push the case, but I have not yet had a response. 

I want nothing more than to resolve this terrible position for the 104 residents in Caerau let down by the UK Government scheme, and I am aware that other projects undertaken through this programme have experienced issues, not only in Wales, but also in England. When designed and installed correctly, external wall insulation is an effective measure to improve domestic thermal energy efficiency to support the people of Wales, but this will be of little comfort to the residents in Caerau, where significant improvements have been made across the sector to ensure the lessons of the past are put into practice.

The lessons have indeed, as Huw suggested, helped shape similar home efficiency schemes in Wales since 2015, as we continue to invest in improving energy efficiency of existing homes in Wales, particularly the most energy inefficient homes, as we tackle the issues of climate change. It is very important that as we support homes to become more energy efficient, we focus on fabric-first and worst-first to reduce the impact of fuel poverty on households in Wales. Improving the energy efficiency of lower income homes is the most effective way we can support households to reduce their energy bills and help them out of fuel poverty.

The same quality of service should have been offered to the residents of Caerau as is now available through our Warm Homes programme in Wales. Welsh Government has invested more than £394 million since 2011 through the Warm Homes programme to deliver energy efficiency improvements to more than 67,100 homes in Wales. It demonstrates significant progress has been made to improve the product and workmanship qualities since the Caerau scheme was developed, and includes steps to give assurance to both Government and householders. The introduction of the PAS 2030 and PAS 2035 standards in 2019 also makes a positive impact on the housing retrofit measures designed and installed. As we start the consultation on the next situation of our Warm Homes programme, it is imperative householders have the confidence that our scheme will deliver energy efficiency improvements that are designed and installed to the highest standard. Arrangements must, of course, be in place to ensure that, in the event things go wrong, despite our best endeavours, they are rectified swiftly without undue delay and stress for the householders. I expect to begin our consultation no later than the end of December, but I can share with Members now that it is my intention that the quality assurance arrangements introduced in PAS 2030 and 2035 will be at the core of the retrofit programmes. 

This Government is committed to delivering positive outcomes for people across Wales, driving up energy efficiency, driving down fuel bills and reducing carbon emissions. We believe that retrofitting draughty, cold homes is an important component of tackling fuel poverty and improving the well-being of our citizens. And as Huw rightly anticipated, I was delighted to recently announce further funding for our optimised retrofit programme. The £50 million being made available this year and a further £150 million over the next three years exemplifies our commitment to this most urgent agenda.

The programme takes a test-and-learn approach to ways of decarbonising existing social homes. By working in this way and approaching our housing stock on a home-by-home basis, we can avoid repeating the mistakes of the past. The ORP will not only improve the energy efficiency and reduce the carbon footprint of the homes in its scope, but, in doing so, it will help ensure that the people who live there can be both warmer and save money. Importantly, the ORP and our evaluation of the smart energy data and impact of retrofit technologies will be used to provide critical proven concepts that can inform wider retrofit work across tenures. Remember, if we are to meet our carbon reduction targets, we need to help 1.4 million homes to decarbonise and be the most energy efficient they can be.

Whilst we continue to invest in supporting social landlords and home owners through the optimised retrofit and Warm Homes programmes, we must not forget about the residents of Caerau. The situation they find themselves in, through no fault of their own, must be the absolute exception rather than any kind of rule. I hope our commitment to pursuing the UK Government for a fair response and determination to learn the lessons from this flawed Westminster scheme and our pursuit of a greener future in Wales, which puts well-being at the forefront of our decision making, gives the Member some comfort while my officials finalise their advice in response to the business case put forward by Bridgend County Borough Council. In the meantime, I urge him and other Members to make their views known as part of the forthcoming consultation. Through engagement and collaboration, we can make sure—

Minister, will you take an intervention?

Yes, sure.

Sorry, Minister, I just wanted to give you the opportunity, before you finish, just to scope out what sort of timescale we might be looking at in terms of any final budget deliberations, whichever way they go, and hoping that the UK Government will actually step up on this, but also a rough timescale—I know that she can't say it to an absolute date—of when she might be likely to make a decision based on the proposal put forward by Bridgend. That would give some idea to my residents what the timescale is.

Well, certainly, Huw, I can say, obviously, the Senedd is in charge of the budget for the Welsh Government, so we need to know what the budget looks like and have the Senedd pass the draft budget towards the end of this calendar year. In the meantime, I'm looking to see what the advice from my officials is and whether we can fund the programme faster than that. But it's very difficult for me to say that at this point in time, as I've yet to receive the advice, I'm sorry. As soon as I have got it, I will come back to you. I do understand the urgency that you are making.

I was actually just concluding my remarks. I was just going to say that we do want to make sure that no-one and no place is left behind as we work towards a brighter future for residents across Wales. I do want to reassure you, Huw, that we absolutely do want to find a solution for the residents of Caerau; it's just that we're in the process of a budget cycle and I absolutely have to consider it in the round. But my heart goes out to them and I really do want to find that solution.

For clarity purposes, the budget will be laid at the end of this year and debated at the start of next year.

Sorry—yes, the draft budget will be laid, I believe, on 20 December and there's a debate at the beginning of the next calendar year for the Senedd to approve it. I think that's right, Dirprwy Lywydd.

And that brings us to a close of business for today. Thank you very much, everyone.

The meeting ended at 18:03.