As part of Chancellor John Healey’s first Budget, he announced that funding for energy-efficiency improvements for low income households under the Warm Homes Fund would be cut by £1bn, reportedly to pay for defence spending commitments.
Despite the reduction of £1bn in grant funding in the £15bn Warm Homes Plan, the Government has claimed that funding for low-income households and social housing delivered through mayors and councils would be protected. The Boiler Upgrade Scheme will also retain its £400m allocation in 2027-28, with funding subsequently set to rise in line with inflation.
Website Carbon Brief however, said that this was a “significant cut in funding for heat-pump deployment of around £800m, relative to previously announced levels.” Analysts told the website that this “could lead to around 100,000 heat pumps not being installed over three years.”
There was relatively little news in the Budget for managers of social housing, beyond the confirmation an extra £1.5bn for new homes in the Social and Affordable Homes Programme, but Healey extended cheaper borrowing arrangements for councils, and confirmed an incentive for landowners for social housebuilding that all land sold to social housing providers would be VAT-free.
Healey also said there will be no major changes to Building Regulations in this Parliament, except “where critical for safety.” Smaller housing developments on brownfield land will be exempt from Biodiversity Net Gain requirements.
Andrew Sissons, director in sustainable future at Nesta told Carbon Brief: “The Chancellor has announced that funding for future heat-pump subsidies will be reduced by nearly £800m over three years. This is a backward step at a time when Britain urgently needs to move away from using gas.”
The Chancellor confirmed previous announcements that there would be an extra £1.5bn available for social and affordable housing projects allocated over 2027-28 and 2030-31, and increasing amounts available during those periods. Prioritising social and council-run homes, it meant that the Social and Affordable Homes programme as a whole totals more than £40bn over the next 10 years.