MEES - why are local authorities failing to enforce?

Lack of resource

Perhaps unsurprisingly, local authority resourcing is at the root of the issue here. Non-domestic MEES is intended to be enforced by a local authority’s trading standards team. Yet it is clear from the data obtained in response to our Freedom of Information requests (“FOIs”) that the majority of local authorities simply do not have sufficient resource and/or funding to effectively manage and enforce MEES.

It is well known that local authorities are overstretched. The reality is that the general public would prefer regular bin collections and potholes to be filled. Local authority resource/funding is therefore prioritised in favour of servicing the critical requirements and needs of the local community. With the number of trading standards inspectors in the UK falling by more than a quarter in the past ten years and trading standards budgets dropping from an average of £1.27 million in 2010-2011 to £860,000 in 2018-2019, it is no surprise that local authorities have failed to effectively enforce MEES.

In what appeared to be a positive step for the MEES regime, the government provided 59 local authorities with funding to enforce domestic MEES in 2021. But the government has since failed to deliver on the promise of further support and any surge in momentum has since fallen away. For MEES to be successfully enforced, local authorities must be properly trained, resourced and funded.

A handful of local authorities are giving MEES some focus. Of the 208 local authorities who responded to our FOIs, six indicated that they take a proactive approach to MEES enforcement. However, even with a more systematic and focused approach, only one reported issuing a compliance notice since April 2018.

Whistleblowers

82% of the 208 local authorities that responded to our FOIs take an “intelligence-led approach” to MEES enforcement. This suggests a degree of due process, but what does this mean in practice? Simply put, MEES enforcement only occurs in response to complaints and concerns from occupational tenants. And these complaints require tenants to have a certain level of knowledge of the minimum standards required.

If MEES is to succeed, local authorities must clearly take a proactive approach to enforcement. The adoption of an “intelligence-led” reactive approach is insufficient and self-evidently not working. 

Glass houses

Murmurs in the market suggest that some local authorities have consciously decided not to enforce MEES given the state of their own property stock.

It is very common for local authorities to own large property portfolios - a mixture of both commercial and residential assets. But with limited funding, there is a risk that local authorities are unable to improve their own property stock to the requisite MEES standard.

If the rumours are true, the reluctance of local authorities to enforce MEES against others is perhaps, understandable. 

Fruits of their labour

The MEES regulations provide that any unpaid financial penalty is recoverable as a debt owed to the enforcement authority. However, it is not clear if local authorities would retain the fruits of their labour (or a substantial proportion of them) or whether the monies obtained are sent direct to HM Treasury.

If local authorities do stand to financially benefit from MEES enforcement, then perhaps trading standards teams have not been made aware. The retention of MEES related financial penalties should be a clear tangible benefit serving to incentivise a local authority to proactively enforce MEES.

Leadership

The lack of leadership and coordination from central government does not bode well for MEES enforcement going forward. Plans to raise the energy efficiency benchmark for domestic properties have been scrapped and the future application of MEES to non-domestic properties remains less clear than ever before as original plans to increase the energy efficiency benchmark to an EPC rating of C by 2027 and an EPC rating of B by 2030 will now almost certainly be delayed.

In light of recent government announcements, and with a UK general election on the horizon, we’re unlikely to see any increased MEES engagement from local authorities in the short term.

With real estate sustainability and ESG factors now forming a crucial part of the industry, the lack of MEES enforcement is a real concern. If MEES is to succeed, perhaps the regime needs an overhaul - or at the very least a shake-up. If local authorities are to retain the role of MEES enforcers, government must lead from the top and provide them with the resource and funding so desperately needed.

Future publications in our data-driven MEES series will tackle:

• Why MEES is still important to the real estate market;
• Survival of the MEES regulations and whether evolution is needed.