Policy Solutions for Better Homes, Lower Bills

We welcome the Government’s commitment to delivering the Warm Homes Plan through a place-based approach, empowering Mayors and local authorities to drive housing upgrades, promote local delivery partnerships and target support where it is needed most. However, this shift to local delivery needs to go hand-in-hand with scaling up the ambition under the current Warm Homes Plan, as is highlighted by new analysis from Frontier Economics.

Building on the findings of Frontier's report, WWF and ScottishPower recommend the following policy solutions.

Frontier's analysis shows that additional public investment is needed to scale up the delivery of longer-term bill savings to fuel poor households. As a priority, the Government should focus on replacing the funding lost through the closure of the ECO and GBIS schemes with an additional £1.5 billion of public funding per year from 2027. This additional funding, alongside existing commitments and rented-sector reforms, could upgrade over 2 million fuel-poor homes within five years, locking in annual bill savings of around £475 per household on average.

Government should build on previous announcements by moving further policy costs from electricity bills into general government spending. This would increase the savings from using clean heating options such as heat pumps, as well as helping to support electrification across the economy. Frontier finds that fully removing the legacy Renewables Obligation and Feed-in-Tarriff costs (as well as keeping VAT off electricity) would increase savings from heat pumps and insulation in a gas-heated terraced home by over 25%, helping low-income households benefit from the energy transition while sharing costs more fairly.

The Government should accelerate the establishment of the Warm Homes Agency to support the roll-out of home energy upgrades for those in need across Great Britain. The Agency needs a dual focus:  first, supporting regional and local government in its strategic planning and helping to match them up with appropriate delivery partners; second, providing a single, trusted national advice service for households. This will be vital to mobilising effective delivery in those areas where fuel poverty is particularly concentrated, including parts of the North-West, Yorkshire and the Humber, the Midlands, Scotland and Wales.

Moreover, Frontier’s modelling shows that savings would increase for households receiving an upgrade in the event of a future energy price shock. So, this kind of investment would provide households in need with a buffer in that situation. The analysis highlights the strong case for investing in more energy efficient homes for those in fuel poverty – locking in year-on-year savings for the long-term and helping to protect low-income households from any future price shocks.