What housing associations need now to help tackle fuel poverty

I’d like to introduce myself as a recent addition to the NHF policy team focusing on warm homes. Please feel free to get in touch with me if you have any questions about our work in this area.

The mission

We know that housing associations are at the forefront of efforts to improve the thermal comfort of homes and tackle fuel poverty. Housing associations are committed to reducing carbon emissions too with 72.5% of housing association homes rated Energy Performance Certificate (EPC) C or above, surpassing all other housing sectors. The Social Housing Decarbonisation Fund (SHDF) and Warm Homes: Social Housing Fund (WH:SHF) have been instrumental in this progress, enabling the upgrade of nearly 40,000 homes and reducing household energy bills by nearly £200 per year on average.

After calling on the government to commit new funding through the Spending Review last month, we were pleased to see the manifesto commitment of £13.2bn for warm homes upheld. However, the journey is far from over.

Approximately 700,000 housing association homes still need to reach EPC C by 2030. To achieve this, we need to double the current pace of retrofits – at an estimated cost of £4.5bn. Housing associations want to continue leading the charge in improving the thermal comfort of homes and cutting carbon emissions, but this must be balanced with investing in the safety and quality of residents' homes and building new ones.

To continue the work to reduce energy bills and decarbonise housing, housing associations require investment, which can be matched with their own funds. While other reforms such as the proposals for a rent convergence will support this financial need, stable investment from the WH:SHF is crucial to achieving the goal of bringing all homes up to EPC C by 2030.

The ask

Housing associations are calling on the government to increase the funding allocated through the WH:SHF as part of the Warm Homes Plan. The National Infrastructure Commission (NIC) recommended £5.1bn in capital spending on energy efficiency improvements between 2024 and 2030. However, only £1.36bn has been allocated through the Social Housing Decarbonisation Fund and WH:SHF since 2023. To meet this commitment, an additional £3.7bn should be allocated specifically for energy efficiency improvements. Funding should support the shift to clean heat, including the uptake of solar panels and batteries, while continuing to prioritize fabric improvements where needed.

The Energy Company Obligation (ECO) funding is also vital for home retrofits across all tenures, and future rounds should be confirmed promptly to avoid supply chain disruptions. Improved compliance measures for the ECO scheme will provide further reassurance to housing associations accessing this scheme, on top of their own quality assurance processes.

Additionally, dedicated funding is needed to improve the efficiency of heat networks, which are crucial for achieving net zero emissions by 2050. Two thirds of heat networks are managed by social landlords, who are facing substantial costs to meet new technical standards. The government must allocate significant additional funding to support these costs.

The design of the scheme is also vital to enable housing associations to decarbonise their residents’ homes at pace. NHF members continue to flag that the significant administration involved with the WH:SHF is a barrier to both take-up and delivery. We’d like to see this addressed in current and future waves of funding.

If this is done properly and in conjunction with wider policy initiatives around energy pricing and generation, this will lower energy bills for years to come, and significantly progress the decarbonisation of social housing.

A clear funding roadmap

To boost decarbonisation efforts, housing associations need certainty of funding. A clear funding roadmap should be provided as part of the Warm Homes Plan, outlining how and when funding will be allocated throughout the parliamentary term, and at key moments over the next decade. Future funding rounds should build on the progress made by the WH:SHF, with longer delivery windows, a less competitive bidding process and a lower administrative burden, especially for medium sized and smaller housing associations.

Housing associations are ready to continue their leadership in making homes warmer in winter and cooler in summer, but they need the government's support to achieve these ambitious goals. By increasing funding and providing a clear roadmap, the government can help ensure that all homes reach EPC C by 2030 – an essential step if the UK is to meet its target of net zero carbon emissions by 2050.