At a crossroads: why the government must keep its £13.2bn promise on the Warm Homes Plan

The Energy Security and Net Zero (ESNZ) Committee’s recent report has reinforced what many in the housing sector already know: that it’s vital the government delivers on its manifesto pledge to invest £13.2bn in the Warm Homes Plan. 

This year marks a pivotal moment. As we approach the Spending Review, the government has a critical opportunity to align departmental budgets with its manifesto vision for tackling the UK’s most pressing challenges. One of the most urgent is that of the climate crisis.  

With just 25 years to meet the UK’s legally binding 2050 net-zero target, and only a decade away from the vital milestone of an 81% reduction in carbon emissions by 2035, the time for decisive action is now. 

We know that housing decarbonisation is central to achieving this mission. The ESNZ Committee’s Retrofitting Homes for Net Zero report rightly highlights the role of retrofit in cutting emissions, reducing bills, and improving health outcomes. Housing associations are already leading the way, and our homes are more energy efficient than any other tenure. But we face a dual challenge: reducing carbon while continuing to invest in the safety and quality of existing homes and building new ones. 

Despite mounting financial pressures, housing associations remain committed to decarbonising homes, demonstrating their dedication to a net zero future. More social homes than any other tenure are at, or above, the right standard of energy efficiency. You’re also more likely to have a heat pump providing heating and hot water in your home if you’re a social tenant.  
But the scale of the challenge means we can’t do it alone, or without long-term clarity and security. The government must announce a programme for how it plans to support the retrofit of homes beyond 2026 in its Warm Homes Plan. In policy terms, a Warm Homes plan with new funding is crucial now as the sector awaits a revised Decent Homes Standard, including a Minimum Energy Efficiency Standard, which is expected to require all social homes to be brought up to EPC C by 2030. Correctly aligned, the sector can then pivot onto the roll out of clean heat in homes, once the standard, with proper funding in place, has been met.  

Current polling by Opinium found that nearly half (48%) of Labour voters cited the party’s warm homes pledge as a factor in their decision to vote Labour. This strong level of support reflects the wide-reaching benefits of the Warm Homes Plan. If properly funded, it is a way to deliver meaningful improvements to the environment, public health, and household finances. 
Delivering the full £13.2bn funding for the Warm Homes Plan is essential to meeting the government’s promise to cut household energy bills by £300 this Parliament. 

Recent news that energy prices are due to fall for the first time in a year, by 7% in July, may bring a flicker of hope for some people struggling with bills. However, many will still feel the financial and emotional toll of prices that will nonetheless remain higher than a year earlier and significantly higher than at the start of the decade. 

Retrofitting homes will play a key role in tackling fuel poverty and protecting people from fluctuations in energy price caps, as more efficient insulation will reduce the amount of energy households need to use. We know that retrofitting less energy efficient social homes will save residents hundreds of pounds a year on bills.  

The cost of inaction would be devasting, not just for residents but also for wider communities. If no further investment than the amount allocated in the Autumn Budget is put forward at the June Spending Review, 3,000 skilled, future proof roles will be lost. In contrast, providing the full £13.2bn allocation is an opportunity to add 12,000 new skilled roles to the retrofit workforce during this Parliament. 

The government now has a clear choice: invest in a sustainable, energy-efficient future, or risk falling short of its climate commitments and manifesto promises. The Warm Homes Plan is a chance to support communities, grow the green economy, and stay on track for net zero, but only if it gets the full funding it needs.