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Campaigners welcomed a cash boost of £3.4bn for the government’s “warm homes” insulation programme in the Budget but raised concerns over whether Labour would fulfil its previous £13.2bn pledge for energy efficiency over this parliament.
The Treasury said chancellor Rachel Reeves would provide more certainty in next year’s new spending round covering the third and fourth years of the parliament in 2026-27 and 2027-28.
Reeves on Wednesday announced £3.4bn over three years for household energy efficiency schemes, heat decarbonisation and fuel poverty schemes.
Labour has previously promised £13.2bn over the parliament for the warm homes scheme — which is roughly a doubling of the £6bn the previous Conservative administration had hoped they would spend over the same timeframe.
Responding to the Budget announcement, The End Fuel Poverty Coalition said that “uncertainty remains over whether ministers will be able to confirm the £13.2bn promised to help people improve their homes”.
The coalition, which campaigns for consumer rights in the UK, said the only way to bring down household bills permanently was by investing in insulation and home improvements.
It follows a row over the government’s decision in July to remove winter fuel payments for 10mn pensioners, triggering concern among campaign groups and Labour MPs.
The £3.4bn allocation, equivalent to £1.1bn a year, appears lower than the annual £1.3bn for insulation that Reeves promised in February.
That was itself a large reduction from an earlier promise of £6bn a year, one of the casualties of a major retreat from Labour’s sweeping “green prosperity plan”.
The party has also clipped the size of its “national wealth fund”, which was set up to provide money for decarbonising heavy industry, while merging it with the existing UK Infrastructure Bank.
But one government figure said the £3.4bn figure was the “bare minimum” that would be spent during the three-year period, given that Treasury has said there will be an uplift when the next spending round is confirmed in the spring.
The person also pointed to wider government spending on insulation by social housing providers, an energy company scheme called the ECO (energy company obligation) and another existing programme called the “Great British insulation scheme”.
Warm This Winter said: “While £3.4bn is a welcome first instalment on the warm homes plan, it is only the start of the journey.
“We desperately need to see a full £13.2bn turbo charge to the warm homes plan and a 10-year strategy to keep people warm every winter through better housing and energy efficiency.”
Ellie Mae O’Hagan, UK energy programme leader for E3G, said the initial £3.4bn would give industry “welcome investment certainty”.
She added that the pledge was “well short” of Labour’s manifesto pledge. “The door has been left open to boost this investment in the spending review due in the spring. This must now be delivered so that people can get the warm homes they deserve.”
The Department for Energy Security and Net Zero said the warm homes plan would transform homes across the country with upgrades from new insulation to solar and heat pumps. It said full details would be released in due course.
“This initial settlement of £3.4bn is the first step in getting help to low-income households fast — and puts us on a pathway to meeting our commitment to doubling funding to fix leaky homes,” said DESNZ.
