UK government yet to spend one-third of funding for housing retrofits

28th February 2023

The UK government has still not spent one-third of the funding pledged to make buildings energy efficient and decarbonise heat, new analysis has revealed.

The Conservatives’ 2019 manifesto promised a total of £9.2bn for upgrades such as heat pumps and insulation by 2030, of which £6.6bn is due by 2025.

However, research by the climate and energy think tank E3G shows that £2.2bn of the £6.6bn remains unallocated, including £1.5bn for the Home Upgrade Grant.

Furthermore, the research suggests that an additional £8.7bn of funding is needed for energy efficiency and heat decarbonisation if the UK is to meet its legally-binding carbon budgets.

The researchers also warn of a 'warm homes postcode lottery', with households living in areas struggling with the retrofit challenge falling further behind due to the competitive nature of funding allocated to local authorities.

Commenting on the findings, IEMA’s Deputy CEO, Martin Baxter, said: “Retrofitting our leaky buildings and homes will be essential if the UK is to meet its carbon budgets and achieve net zero by 2050.

“However, regional differences in the availability of support, skills and subsidies are making it difficult for businesses to invest.

"By providing long-term certainty through regulations and economic incentives, the government can ramp up delivery of energy efficiency and clean heat across the country in the Spring Budget 2023.

"IEMA will continue to support the government in delivering on its policies by offering the training and guidance required for the low-carbon transition."

The unspent funding is illustrated below:

Source: E3G

According to the researchers, years of “boom-bust policy-making” have left the retrofitting industry decimated, and a lack of long-term certainty is compounded by further “nuts and bolts” challenges associated with delivering current government-backed retrofit schemes.

The UK’s cornerstone fuel poverty energy efficiency programme, ECO, is currently delivering at around a quarter of its intended scope, and energy efficiency installers report problems associated with meeting the scheme’s criteria.

To build up the retrofit market rapidly and sustainably, E3G recommends:

1) Long-term regulations and economic incentives, including tightening energy efficiency standards for the private rented sector, confirming timelines for phasing out fossil heating systems, and signalling the introduction of an Energy Saving Stamp Duty

2) Support installers to build the skills, competencies and capacity to deliver programmes to a high standard across the country – providing long-term funding with sufficient timelines to deliver local training programmes

3) Build capacity and competence among local authorities to launch and deliver retrofit schemes in their areas, providing resources for hiring project staff

4) Boost household awareness and roll out trusted, tailored advice services across the country.

Juliet Phillips, Senior Policy Advisor at E3G, said: “Getting on track for UK climate and energy security targets will require a significant step-up from today’s level of investment in energy efficiency and heat pumps.

"The forthcoming Spring Budget provides a platform for the government to launch a decade-long programme to support warmer homes, green industries and good jobs across the whole of the UK.”

IEMA's Green Careers Hub can help people from any sector or background understand how they can play a role in the wider green economy.

Photo by Richard Bell on Unsplash

Graphic credit: E3G


Subscribe to IEMA's newsletters to receive timely articles, expert opinions, event announcements, and much more, directly in your inbox.

Transform articles

UK government accused of attempting to relax sewage rules ‘through the backdoor’

Campaign group Wild Justice has accused the UK government of trying to relax pollution rules for housebuilders “through the backdoor”.

14th February 2024

Read more

Three-quarters of UK adults are concerned about the impact that climate change will have on their bills, according to polling commissioned by Positive Money.

13th February 2024

Read more

All major housing developments in England will be required by law to deliver at least a 10% increase in biodiversity under new rules that came into force today.

12th February 2024

Read more

The crisis engulfing nature poses a massive risk to the global economy. Huw Morris reports on how the finance sector is adopting new measures for disclosing business activities and channelling investment

1st February 2024

Read more

Fossil fuel companies may soon be forced to pay out billions for their role in the climate crisis. Trial lawyer Jeffrey B Simon tells Chris Seekings about his groundbreaking lawsuit in the US

1st February 2024

Read more

Decarbonising the global economy will require a financing shift of historic proportions. Vivienne Russell assesses the scale of the challenge, the barriers and the opportunities

1st February 2024

Read more

As we approach the 40th anniversary of the Born Free Foundation, co-founder Will Travers OBE tells Chris Seekings how a new approach to conservation is needed to end animal suffering

1st February 2024

Read more

Media enquires

Looking for an expert to speak at an event or comment on an item in the news?

Find an expert

IEMA Cookie Notice

Clicking the ‘Accept all’ button means you are accepting analytics and third-party cookies. Our website uses necessary cookies which are required in order to make our website work. In addition to these, we use analytics and third-party cookies to optimise site functionality and give you the best possible experience. To control which cookies are set, click ‘Settings’. To learn more about cookies, how we use them on our website and how to change your cookie settings please view our cookie policy.

Manage cookie settings

Our use of cookies

You can learn more detailed information in our cookie policy.

Some cookies are essential, but non-essential cookies help us to improve the experience on our site by providing insights into how the site is being used. To maintain privacy management, this relies on cookie identifiers. Resetting or deleting your browser cookies will reset these preferences.

Essential cookies

These are cookies that are required for the operation of our website. They include, for example, cookies that enable you to log into secure areas of our website.

Analytics cookies

These cookies allow us to recognise and count the number of visitors to our website and to see how visitors move around our website when they are using it. This helps us to improve the way our website works.

Advertising cookies

These cookies allow us to tailor advertising to you based on your interests. If you do not accept these cookies, you will still see adverts, but these will be more generic.

Save and close