Government reveals allocations for £1.29bn decarbonisation funding

Wave 3 of the WH:SHF, which was renamed from the Social Housing Decarbonisation Fund, will support the sector to upgrade stock currently below Energy Performance (EPC) Certificate Band C up to that standard.

Applications to the fund opened at the end of September and closed on 25 November. The two new routes to access funding under this scheme were via the Challenge Fund and through strategic partnerships. 

The Challenge Fund was suited for all providers, including smaller landlords or those without previous retrofit experience, while strategic partnerships were designed to help capable organisations deliver ambitious and innovative retrofit projects.

The WH:SHF Wave 3 includes funding for 17 strategic partnership projects and 127 Challenge Fund projects.

Some of the largest allocations under the Challenge Fund route include North Yorkshire Council, which was offered £21.9m, Longhurst Group with £20.3m and L&Q with £15.7m.

Stroud District Council and its consortium members were offered £15.7m under this route, Flagship £14.4m, Vivid £14.4m and Together £14.2m.

Under the strategic partnerships route, Places for People Group and its consortium members were offered £31m, Sanctuary £44.3m, Sovereign Network Group £36.5m, Riverside £35.9m, Peabody £23.5m, Home Group £28.3m, Abri £23.3m and Stonewater £18.7m.

The London Borough of Camden was offered £77.9m under this route, Nottingham City Council/Midlands Net Zero Hub and its consortium members £75.9m, and the West of England Combined Authority £66.7m.

In addition, the Liverpool City Region Combined Authority was offered £48.1m, the Tees Valley Combined Authority £43.9m and the West Yorkshire Combined Authority £25.7m.

Meanwhile, DESNZ has allocated £500m in funding from the Warm Homes: Local Grant to deliver 73 projects across 270 local authorities over the next three years until March 2028.

The scheme, which replaces the Local Authority Delivery Scheme, will begin this year. It will provide energy performance upgrades and low-carbon heating via local authorities to privately owned low-income households in England that have an EPC rating between D and G.

Miatta Fahnbulleh, minister for energy consumers, said: “Living in a warm, comfortable home should not be a luxury. It is a right that has been out of reach for too many people for too long. 

“By giving this funding to local authorities and social housing providers, we are delivering on our promise to improve the homes of thousands of people across England. 

“As part of our Plan for Change, we are powering on with our Warm Homes Plan, upgrading cold and draughty homes so they are warmer, cleaner and cheaper to live in.”

Sector’s reaction

Kate Henderson, chief executive of the National Housing Federation, welcomed the funding allocation to help decarbonise England’s social homes and called it “a crucial step towards the government’s commitment to tackle fuel poverty”. 

She said: “With the fund oversubscribed, it is clear that there is both momentum and appetite among housing associations to upgrade their homes at scale and pace. The sector is working hard to ensure all their homes meet EPC C by 2030, in line with the government’s net zero target. 

“Decarbonising our homes is a win-win for residents, the government and our planet, creating warmer homes, saving residents money and tackling the climate emergency.”

Gavin Smart, chief executive of the Chartered Institute of Housing (CIH), said the trade body welcomes this investment as “another important step towards making homes warmer, healthier and more affordable to run”.

“Social landlords have worked hard to improve the energy efficiency of their homes, and this funding will help them to continue that work – supporting retrofit programmes that will reduce fuel poverty, lower carbon emissions and bring down energy bills for tenants,” he said. 

“The strong demand for this funding highlights how vital energy efficiency investment is for the social housing sector. The CIH will continue to work with the government and our members to support the effective roll-out of this funding and advocate for the long-term investment needed to make all homes warmer and safer.”

Tracy Harrison, chief executive of the Northern Housing Consortium, which has more than 440 members across the North, said this extra funding from the government is “very welcome”.

She said it will boost its members’ efforts, helping to cut carbon emissions, support jobs, cut fuel bills and tackle fuel poverty.

“We also welcome the move to devolve retrofit funding in the North through the allocation of funding to the Greater Manchester Combined Authority’s Integrated Settlement,” Ms Harrison said.

“This will allow funding to better align with locally led plans for economic growth, training and skills provision, as well as support greater collaboration between housing providers in Greater Manchester. We know there is continuing appetite from our members to continue to make our homes more energy efficient.”

Matthew Warburton, policy advisor at the Association of Retained Council Housing, told Social Housing: “This is good news, but there is still a long way to go to meet the goal of a minimum standard of EPC C for all social housing by 2030.”