The Department for Energy Security and Net Zero (DESNZ) recently announced the launch of a new funding initiative, the Warm Homes: Local Grant (WH) scheme, aimed at improving the energy performance and heating systems of low-income households in England. This scheme is a significant development in the UK's drive to reduce carbon emissions and improve energy efficiency in private homes, marking a critical opportunity for local authorities to support vulnerable communities while contributing to the national net zero goals.

In this insight, we outline the key details of the scheme and how local authorities can take advantage of this new funding.

Who is eligible for the Warm Homes: Local Grant?

The WH scheme is specifically designed to help low-income households with poor energy performance rating (EPC rating of D to G) and are privately owned or rented. The households targeted by the scheme are those most likely to suffer from fuel poverty, ensuring that the funding reaches those who need it most. Eligible households must have a gross income of £36,000 or less, or be receiving certain benefits, with local authorities responsible for verifying household eligibility. New-build and self-built homes, as well as those not previously occupied, are excluded from the scheme.

How does the scheme work?

Local authorities play a central role in the delivery of the WH scheme, which will officially begin in 2025 following an Expression of Interest (EOI) window expected to open in October 2024. All eligible local authorities that submit an EOI form will be allocated funding to participate in the scheme, ensuring broad coverage across England. The funding will cover energy performance upgrades such as insulation, solar panels, and low-carbon heating systems like air-source heat pumps. This will help improve the efficiency of homes, lower energy bills, and reduce carbon emissions.

Key funding details

The WH scheme offers funding of up to £15,000 per home for energy performance improvements and an additional £15,000 for low-carbon heating measures, totalling up to £30,000 per household. For private landlords, the scheme will fully fund improvements to one property, while they will be required to contribute 50% of the costs for additional properties. Tenants are not expected to contribute toward any expenses, removing a significant barrier to participation.

Addressing fuel poverty and achieving net zero

The WH scheme forms part of the broader Warm Homes Plan, a long-term government initiative aimed at upgrading England's housing stock to improve energy efficiency and lower household energy costs. The scheme is intended to last three to five years and represents a crucial step toward addressing fuel poverty and meeting the UK's legally binding net zero targets by 2050. According to DESNZ, the WH is expected to deliver significant reductions in carbon emissions and energy bills for households most at risk of fuel poverty.

The government has also announced plans to raise the minimum energy-efficiency standards for private and social rented homes by 2030, with a proposed target of EPC rating C. This will further drive improvements across the private rental sector, ensuring that millions of homes in England benefit from cleaner, cheaper energy.

How local authorities can prepare

In preparation for the EOI window opening, local authorities are encouraged to start planning and building partnerships with key stakeholders, such as landlords, energy providers, and community organisations. Early preparation will help ensure that the necessary infrastructure is in place to deliver successful energy efficiency programs from 2025 onwards.

DESNZ has also introduced Retrofit Information, Support and Expertise (RISE), a free support service for local authorities that will assist with all aspects of the planning and delivery of Warm Homes schemes. RISE can provide training, guidance, and ongoing support, ensuring that local authorities are well-prepared to manage the implementation of these complex programs.

Conclusion

The Warm Homes: Local Grant scheme provides a much-needed injection of funding to help local authorities improve energy efficiency and tackle fuel poverty in the communities that need it most. With a clear focus on low-income households and poor-performing properties, this initiative will play a vital role in improving living standards and cutting carbon emissions in line with the UK’s net zero targets.

How Capsticks can help

At Capsticks, we are committed to supporting local authorities through the process of applying for funding and managing retrofit projects. Our team of specialist lawyers, with extensive experience in local authority and procurement law, is available to provide expert guidance on every stage of the application and delivery process. From navigating the eligibility criteria to ensuring compliance with grant conditions, Capsticks can help local authorities maximise the benefits of the Warm Homes: Local Grant scheme.

If you have any questions or require further assistance, please contact Tiffany Cloynes, Tracey Blundell or Rebecca Gilbert to find out how Capsticks can help.