- £1.4 billion to go to local authorities, providers of social housing and charities to upgrade homes and off-grid households with energy efficiency measures
- changes, including loft insulation and new windows, mean households could save between £220 and £400 on annual energy bills, with funding expected to support 20,000 jobs
- £409 million also awarded to reduce carbon emissions of hospitals, schools, museums, universities and other public sector buildings across England
More than 115,000 homes across England are to get upgrades to improve their energy efficiency and save residents money on their bills as the government announces the allocation of nearly £2 billion in funding.
The Social Housing Decarbonisation Fund and Home Upgrade Grant are collectively worth £1.4 billion, which will be used to fund 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 to £2.5 billion to upgrade social and private homes in England.
The money will go towards improvements to vulnerable households and off-gas grid homes with an EPC rating of D or below and could save tenants between £220 and £400 a year on energy bills.
These schemes could also 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.
On top of this, a further £409 million has been 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.
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.
Not only this but 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.
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 a huge 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.
Aliye Galloway lives in social housing in Northamptonshire with her partner and 5 children. Through the Social Housing Decarbonisation Fund her home was fitted with an air source heat pump, solar panels and more efficient doors and windows.
She said that even with the recent energy price rises, the family’s energy bills are significantly lower since the work has been completed.
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.
Emma Pinchbeck, Chief Executive of Energy UK said:
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 today that over £400 million has been allocated 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 benefit from this support.
This 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.
Announced today, 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 Finance Chief Executive Annie Shepperd OBE, said:
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.
In the meantime, the government has partnered with Energy Systems Catapult today to launch a freely accessible suite of tools, templates and guidance to support the public sector in further decarbonising their sites. This support will 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.
This is a continuation of the government’s award-winning Modern Energy Partners programme which has worked with 42 sites to explore different avenues for decarbonisation.
Social Housing Decarbonisation Fund and Home Upgrade Grant
Adam Scorer, Chief Executive of National Energy Action (NEA) said:
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.
Tracy Harrison, Chief Executive, Northern Housing Consortium said:
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 said:
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.
Public Sector Decarbonisation Scheme
Cllr Helen Silman, Worthing Council’s Cabinet Member for Climate Emergency, said:
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, said:
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, said:
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.
Social Housing Decarbonisation Fund
The SHDF is for local authorities, providers of social housing and charities that own social housing to bid for funding from government to install energy efficiency upgrades in their housing stock that is currently below an Energy Performance Certificate (EPC) C rating.
Around 90,000 homes are expected to be upgraded under the scheme and funding will support around 13,000 jobs annually in the green energy sector, creating the conditions for growth in the retrofit supply chain and boosting productivity and innovation in the construction sector.
Full regional breakdown for Social Housing Decarbonisation Fund Wave 2.1:
- West Midlands: £93.5 million
- East Midlands: £74.7 million
- London: £131.5 million
- North West: £105.3 million
- South West: £80.2 million
- South East: £128.9 million
- East of England: £83.6 million
- North East: £29.3 million
- Yorkshire & the Humber: £50 million
See the full breakdown of those receiving funding through the scheme
Home Upgrade Grant
The Home Upgrade Grant (HUG) will provide energy efficiency upgrades and low carbon heating via local authority funding, to households in England that are low income, off the gas grid or have an Energy Performance Certificate (EPC) between D and G.
Full regional breakdown for Home Upgrade Grant Phase 2:
- West Midlands: £152.7 million
- East Midlands: £3.2 million
- London: £12 million
- North West: £83.8 million
- South West: £77.5 million
- South East: £161.2 million
- East of England: £23.5 million
- North East: £28.5 million
- Yorkshire & the Humber: £41.1 million
See a full breakdown of those receiving funding through the scheme.
Public Sector Decarbonisation Fund
Phase 3 of the Public Sector Decarbonisation Scheme is investing £1.425 billion over the financial years 2022-2023 to 2024-2025.
The first Phase 3 application window, Phase 3a, opened on 6 October 2021 and closed on 3 November 2021. £613 million was awarded to 231 grant recipients through Phase 3a.
The second application window, Phase 3b, opened on 12 October 2022 and closed on 31 October 2022.
We have already made available over £1 billion through Phases 1 and 2 of the Public Sector Decarbonisation Scheme over 2020-2021 and 2021-2022.
Phase 1 of the scheme was part of the Chancellor’s ‘Plan for Jobs 2020’ commitment to support the UK’s economic recovery from COVID-19, supporting up to 30,000 jobs in the low carbon and energy efficiency sectors.
Some of the latest recipients of funding through the Public Sector Decarbonisation Scheme include:
- Adur and Worthing Councils have been awarded almost £3 million to support the decarbonisation of 6 public buildings, including the Grade II listed Worthing Museum and the Connaught Theatre, one of the oldest cinemas in the UK. Each building will be connected to the existing Worthing Heat Network, which uses a pump system to turn heat from wastewater in the local sewer into sustainable energy
- Salisbury NHS Foundation Trust, which has been granted £10 million to upgrade various buildings at Salisbury District Hospital, including the Spinal Treatment Centre and the hospital leisure centre. Gas fired boilers will be replaced with heat pumps and the energy efficiency of the buildings will be improved
- Northumbria University is benefitting from almost £2 million to decarbonise its library, the reception buildings, and the Sports Centre at Coach Lane East campus
- Canterbury City Council is receiving more than £600,000 to install an air source heat pump and solar panels in Kingsmead Leisure Centre
- Greater Manchester Academies Trust has been awarded over £1 million to install heat pumps, solar panels, and loft insulation at secondary school Manchester Communication Academy
- South Warwickshire University NHS Foundation Trust has been awarded over £8 million to decarbonise the heating of 21 buildings across Warwick Hospital and Royal Leamington Spa Rehabilitation Hospital
Regional funding breakdown for Phase 3b is:
- North East: £7,636,389
- Yorkshire and the Humber: £21,737,561
- North West: £44,555,899
- East Midlands: £18,112,366
- West Midlands: £88,371,731
- East of England: £14,677,719
- South East: £108,324,556
- South West: £33,450,968
- Greater London: £44,280,137
- Across regions: £26,688,898
- Scotland: £1,221,871
These projects represent just the latest funding awarded through Phase 3 of the Public Sector Decarbonisation Scheme, with the remaining funding for the current allocation round, Phase 3b, continuing to be awarded over the coming months. More than £2 billion has been awarded across over 900 projects to decarbonise the public sector across all phases of the scheme to date.
Find summaries of how the latest funding awarded will be spent.
Modern Energy Partnerships: Our Modern Energy Partnerships guidance includes advice on procurement, which allows input of energy consumption data so decarbonisation interventions can be assessed. There is also guidance to help public sector organisations consider how their overall decarbonisation solution could look and role that technology can play.
This guidance will be instrumental in helping public sector organisations build applications for future phases of the Public Sector Decarbonisation Scheme as well as maximise cost and energy savings from their decarbonisation projects.