As we get closer to Chancellor, Rachel Reeves’, Spending Review on 11th June, speculation is growing that the Warm Homes Plan could be next in line for the Government’s cuts.
So great is the worry that over 50 businesses and trade bodies - including UK Finance, the Building Societies’ Association, and Nationwide - have written to the Government, urging ministers to uphold their commitment to invest £13.2bn through the Plan.
Back in its 2024 manifesto, we saw Labour pledge an extra £6.6bn over its term, which would double the existing Government investment and bring the total to £13.2bn - enabling the upgrade of five million homes.
To make it work, they promised grants and low interest loans for insulation, solar panels, batteries, and low-carbon heating systems. It all sounded very convincing, with plans to work with local authorities to roll it out, as well as getting banks and building societies on board to add more private finance into the mix.
Going back on this promise would deal a significant blow to the UK’s net zero ambitions, at a time when we’re already behind schedule.
Perhaps in an effort to capture the Government’s attention on economic growth, the letter highlighted that maintaining current funding levels would result in the loss of 3,000 jobs, whereas committing to the full £13.2bn could create 12,000 new roles in the retrofit industry.
The message to the Government from those who have signed the letter is clear - if you want help cutting energy bills and to make the UK more ‘energy secure’, you need to stick to your £13.2bn promise.
Losing momentum
Over the past year, the enthusiasm around net zero seems to have waned, and the message about its benefits - especially the potential cost savings for households - seems to be getting lost.
Recently, we heard Andy Mayer, an energy analyst at think tank the Institute of Economic Affairs, criticise the Government’s plan to mandate solar panels on all new builds from 2027. He remarked that it should be the homebuyer who decides what goes on the property, not a minister “in the grip of an ideological crusade.”
Mayer also challenged the Government’s claims about savings of £1k a year and the assertion solar panels would pay for themselves within three years, instead saying rooftop solar actually takes between 10-20 years to pay off. He also suggested looking to Spain and using its recent blackout event as a cautionary tale.
The prevailing tone in recent news suggests a growing scepticism towards net zero - not just questioning the timelines but the very premise itself.
This ongoing uncertainty from the Government isn’t helpful for the housing or mortgage markets, especially given numerous businesses have already invested in green initiatives. It also won’t inspire confidence in homeowners to take on retrofitting projects.
While retrofitting homes does involve upfront costs, when done properly, the long-term savings can outweigh these initial expenses. Recent analysis from the Energy and Climate Intelligence Unit (ECIU) showed delays in implementing new-build energy-efficient standards have led to families living in new homes paying an additional £5bn in energy bills between 2017 and 2025.
It estimates delays in implementing the Future Homes Standard has resulted in around 1.35 million new homes in England being built to lower insulation standards. Consequently, these homes have cumulatively paid an extra £5bn in energy bills due to inadequate insulation and the absence of heat pumps and solar panels.
With household energy costs rising and the UK’s net zero commitments hanging in the balance, what's needed is a concrete implementation plan and additional funding, backed by consistent Government action - not another cycle of policy delays and reversals.
