Why new Warm Homes funding is a significant opportunity for housing

Policy improvements that drive action

 

There have been some big improvements since the previous funding wave, related to project size, cost caps and a focus on low-carbon heat.

 

In addition, the ‘trailblazer’ devolution deals for the Greater Manchester Combined Authority (GMCA) and the West Midlands Combined Authority (WMCA) allow for local retrofit solutions to be created, separate to the WHSHF and its sister scheme WHLG.

 

This approach potentially creates opportunities for cross-organisational working to tackle challenging areas in a more co-ordinated manner.

 

Elsewhere in England, we see opportunities to explore cross-tenure programmes with WHLG complementing WHSHF.

 

Engaging with local authorities can result in schemes being developed and delivered where owner-occupiers and private rented sector homes within social housing estates can be delivered, fully funded by WHLG – rather than using ‘non-social homes’ allowances.

 

There is potential to revisit homes that benefited from earlier funding programmes, eg the Social Housing Decarbonisation Fund Demonstrator and Wave 1.

 

By targeting homes that are ostensibly ‘heat pump ready’, significant deployment of low-carbon heating could be achieved, supporting landlords to reach their net zero carbon targets cost-effectively and without negatively impacting tenants’ fuel bills.

 

The funding design has been amended, too, and so we will see opportunities in the three-year delivery window, the new, consistent base cost caps and the minimum application size cap being lifted.

 

For 10 per cent of properties within a project, landlords can leverage £20,000 per property through the ‘on-gas low-carbon heating incentive’. No match-funding is needed, although wider eligibility criteria remain.

 

Another significant change is the two application routes: challenge fund and strategic partnerships.

 

No route is ‘better’ than the other, however there are differences. Strategic partnership requires more detail, is competitive and considers past delivery performance but with lighter-touch monitoring.

The challenge fund needs less detail and, if minimum eligibility criteria are met, funding is guaranteed, however there is more regular project monitoring.

 

Reduced application burden and monitoring allows more fluidity to the process.

 

Organisations can consider how best to approach WHSHF, which – combined with three-year delivery – means longer-term delivery models can be employed and integrated within wider asset management programmes with considered phasing and planning.

 

There is also much more emphasis on sector learning and among organisations within communities with more of a resident focus.

 

These programmes, then, present an opportunity to upskill, develop and grow the workforce, too, building capacity to continue these projects after funded retrofit programmes have ended.

 

Delivery challenges

 

Breaking myths about low-carbon heating, securing access, finding contractors and recruiting internal teams are all existing challenges.

 

We also face new ones – not least changes to the Standard Assessment Procedure (SAP), devolution and co-ordination with WHLG.

 

Changes to SAP impacts all homes in England with some benefits like improved accuracy, alignment with carbon reduction goals and greater relevance for current and future occupiers.

 

However, changes during funding delivery cause issues as homes currently at Energy Performance Certificate D might recalculate to a C (or vice versa).

 

Mitigations for this are being worked through, and it is possible, using software, to model the impact of SAP changes on individual homes.

 

The devolution deals will enable decisions that align with local need. The challenge will be the impact during funding delivery with the risk for different approaches or measures delivered to homes potentially on opposite sides of the same street.

 

Finally, the simultaneous roll-out of WHLG – a positive move from the government listening to the challenge of how to deliver retrofit to eligible privately owned properties within social housing terraces and estates – also presents challenge, notably around resident engagement and contractor procurement.

 

These will need working through to enable effective and efficient deployment of WHSHF and WHLG.

 

In conclusion

 

The WHSHF represents a significant opportunity for the social housing sector to advance retrofit projects, reduce carbon emissions and improve resident well-being.

 

Viewed alongside the WHLG, innovative schemes can be developed, working in partnership with local authorities to deliver area-based retrofit programmes ‘at scale’.

 

By addressing the challenges and providing support through the Retrofit Information, Support and Expertise programme, this funding could transform our approach to retrofit, ensuring successful project delivery and long-term sustainability.

 

David Kemp, director, sustainability, Turner & Townsend