£1.8 Billion of Grants for Social Housing and Public Building Energy Efficiency Improvements in England

The UK’s Department for Energy Security and Net Zero has made grants totalling £1.8 billion to local authorities, social housing providers and charities in England as part of the government’s latest initiative to reduce building-realted emissions.

More than 115,000 homes are being earmarked to receive upgrades funded through the Social Housing Decarbonisation Fund and Public Sector Decarbonisation Scheme. Collectively worth £1.4 billion, the government schemes will pay for the introduction of energy-saving measures ranging from loft insulation to new windows. An additional £1.1 billion in match funding for social housing provided by local authorities, providers of social housing and charities will bring the total investment for upgrading social and private homes in England to £2.5 billion.

Improvements will target vulnerable households and off-gas grid homes with an Energy Performance Certificate (EPC) rating of D or below and could save tenants between £220 and £400 a year on energy bills.

According to government projections, the schemes will additionally support around 20,000 jobs in the construction and home retrofit sectors, helping to deliver on our promise to grow the economy and create better paid jobs, whilst supporting families across the country.

A further £409 million is also being granted through the Public Sector Decarbonisation Scheme to help public sector buildings such as schools and hospitals drive down their carbon emissions. Upgraded heating systems, powered by cleaner, cheaper, renewable energy, will reduce the use of fossil fuels exposed to volatile global energy prices – supporting thousands of jobs and saving taxpayers hundreds of millions of pounds.

Unveiling the new initiative, Secretary of State Grant Shapps, said: “We know this is a difficult time for families, which is why the government is covered around half a typical household’s energy bill this winter.

“This is a huge investment that will help households save hundreds on energy bills and see them heat their homes for less, and stay warm for longer.

“The funding is also a huge boost for job creation and economic growth, opening up new and exciting opportunities across the UK’s ever-expanding green sector.”

Through the Public Sector Decarbonisation Scheme funding allocation announced today, we are empowering public bodies to save the taxpayer hundreds of millions while packing a punch on our ambitious and necessary climate goals

Lord Callanan, Minister for Energy Efficiency and Green Finance, said: “The UK is truly a world-leader when it comes to reducing carbon emissions and the progress we’ve made over the last decade has been remarkable. But we can’t rest on our laurels and must continue to drive forward progress, setting a standard for other countries to follow.”

“Reaching net zero means considerable action from the public sector as well as private sector. Through the Public Sector Decarbonisation Scheme funding allocation announced today, we are empowering public bodies to save the taxpayer hundreds of millions while packing a punch on our ambitious and necessary climate goals.”

Local authorities, providers of social housing and charities have been awarded an injection of £630 million, to come from Phase 2 of the latest stage of the Home Upgrade Grant, while £778 million will be provided through the most recent wave of the Social Housing Decarbonisation Fund. An additional £1.1 billion in match funding will be added to this through the Social Housing Decarbonisation Fund, bringing the total to £2.5 billion to upgrade social and private homes in England.

The funding will be rolled out from April 2023 to upgrade homes over the next 2 years.

Energy cutting and cost saving measures provided through the schemes include exterior wall insulation, cavity wall insulation, loft insulation, new windows and doors and draft proofing measures, as well as heat pumps and solar panel installation.

The schemes form part of the government’s commitment to reduce overall UK energy demand by 15% by 2030, as well as supporting the ambition for the UK to move towards greater energy independence.

The Home Upgrade Grant is supporting over 25,000 low-income homes across England by installing energy efficiency measures and low carbon heating. Those being aided are typically the worst quality, off-grid homes most in need of upgrading, with an EPC rating of D to G. Improving these homes comes with the added benefit of supporting 7,000 jobs.

“We are going to massively save. Even though the prices have gone up, we are still putting in less than we were before.”

Aliye Galloway, a social housing tenant whose Northamptonshire home she shares with her partner and 5 children was fitted with an air source heat pump, solar panels and more efficient doors and windows through the Social Housing Decarbonisation Fund, says: “Already we are seeing a massive change with our energy consumption and energy costs and already that’s having a positive impact on us a family.

“We are very happy with how it all works. We would recommend it to any tenant who is approached by the scheme. It will have a huge positive outcome.

“It’s supposed to be more eco-friendly too so I’m very happy we managed to get rid of the gas to be honest. We are literally just electric now.

“We are going to massively save. Even though the prices have gone up, we are still putting in less than we were before.”

Today’s announcement will rightly prioritise those who need support the most like low- income households, social housing and public buildings.

Emma Pinchbeck, Chief Executive of Energy UK, adds: “Improving the energy efficiency of Britain’s draughty homes and buildings is the best way to cut energy bills permanently, while also boosting the UK’s energy security and reducing carbon emissions.

“Today’s announcement will rightly prioritise those who need support the most like low- income households, social housing and public buildings.

Industry will work with government to build on these vital schemes and to remove any barriers that prevent households and businesses from saving money on their bills by reducing heat loss and conserving energy.”

The government has also announced over £400 million of allocations to public sector bodies across England to help reduce their carbon emissions. 144 public sector organisations responsible for hospitals, schools, leisure centres, museums and universities will receive this support.

The funding is being delivered through the Public Sector Decarbonisation Scheme, which provides grants to public sector bodies to fund low carbon heating, renewable energy and energy efficiency measures such as heat pumps, solar panels and insulation. The scheme is being delivered on behalf of the government by Salix Finance.

Organisations set to receive funding include Adur and Worthing Councils, Salisbury NHS Foundation Trust, Northumbria University, Greater Manchester Academies Trust and many other worthy recipients across England looking to improve the sustainability of their buildings.

The Scheme aims to support the government’s commitment to reduce emissions from public sector buildings by 75% by 2037, compared to 2017 levels, as first set out in the 2021 Heat and Buildings Strategy. The commitment follows significant progress the UK has already made towards reaching net zero – cutting all emissions by 48% between 1990 and 2021, which is faster than any other G7 country.

Decarbonising the public sector with low carbon heating and energy efficiency measures is also expected to save the public sector an estimated £650 million per year on average to 2037.

Salix is proud to be supporting the hundreds of decarbonisation projects that have been made possible through the Public Sector Decarbonisation Scheme.

Salix Finance Chief Executive Annie Shepperd OBE, says:

“There is a huge amount of passion and expertise in the green energy sector, and Salix is proud to be supporting the hundreds of decarbonisation projects that have been made possible through the Public Sector Decarbonisation Scheme. Each one represents the best evidence of government and public bodies working together to achieve great things.”

The government has also announced a partnership with Energy Systems Catapult to launch a freely accessible suite of tools, templates and guidance to support the public sector in further decarbonising their sites. Launched to “help public sector bodies from the first stages of developing a strategy, through funding, installation and completion, to help make achieving net zero sites and energy savings simpler”, the new toolset will support the government’s award-winning Modern Energy Partners programme which has worked with 42 sites to explore different avenues for decarbonisation.

Several stakeholders have reacted positively to the latest funding announcements from the government, with Ada Scorer, Chief Executive of National Energy Action (NEA), commenting:

“This vital investment is desperately needed. Low-income households, in the least efficient homes, are being hardest hit by the energy crisis and are having to pay hundreds of pounds more than the typical household just to heat and power their home to a minimum reasonable standard.

“As well as helping to abate the impact of high energy bills for thousands more households, we hope the investment can lessen some of the physical and mental health impacts for people unable to keep warm at home.

“Both the Social Housing Decarbonisation Fund and Home Upgrade Grant can also help us make progress with our legal fuel poverty targets, helping millions more of the poorest households, who are massively exposed to high energy prices and pay an ‘energy inefficiency premium’ just to stay warm and safe at home.”

Retrofitting homes towards net zero is a key priority for councils and housing associations across the North.

Tracy Harrison, Chief Executive, Northern Housing Consortium, says: “This latest wave of funding adds to the momentum already built around green home upgrades in the North.

“Retrofitting homes towards net zero is a key priority for councils and housing associations across the North. Our members want to continue to scale their activity to support the development of the supply chain, and to deliver good, green jobs.

“We were delighted to see even more ambitious partnership bids submitted to this Wave – an approach which we hope to see followed through in delivery. But most importantly, these successful projects will help create warmer homes and improve the physical and mental health of people in our communities.”

Carol Matthews CBE, Chief Executive of The Riverside Group, says: “We are delighted that we have secured just short of £12.7 million from the Social Housing Decarbonisation Fund from the Department for Energy Security and Net Zero.

“This funding will enable us to improve the energy efficiency of our homes and protect our residents from rising fuel bills and cost of living crisis. Riverside will be match funding and investing £15 million as part of our retrofitting and net zero commitments. We are looking forward to working with the government to improve over 1,100 homes and the lives of our residents living in them.”

Addressing the Public Sector Decarbonisation Scheme, Councillor Helen Silman, Worthing Council’s Cabinet Member for Climate Emergency, says: “Worthing Borough Council is delighted to receive this latest round of Public Sector Decarbonisation Scheme funding, which will help us to secure Worthing’s sustainable future through infrastructure and innovation.

“The decarbonisation of heating is key to our goal of being a carbon neutral council by 2030, and a challenge we’ll continue to rise to as we look ahead to meeting our 2045 target of a carbon-neutral Worthing.”

Cristina Calleja, Sustainability Manager at South Warwickshire University Foundation Trust, says: “Our estates, capital and sustainability teams worked very hard to put together an innovative and detailed grant application, which will reduce our organisation’s carbon emissions and benefit our staff, patients and visitors. Therefore, we are extremely delighted to have received this grant that demonstrates our commitment to climate change at the Trust.”

Canterbury City Council’s Director of Strategy and Improvement, Peter Davies, adds: “We are really pleased to have secured a grant from the Public Sector Decarbonisation Scheme, which will allow us to significantly reduce emissions at Kingsmead Leisure Centre.

“By their very nature, leisure centres are energy intensive buildings and we have been conscious of the need to put in place measures to lessen the impact of Kingsmead on the environment. This grant will enable us to do a huge amount using some of the latest technology.”