First funding for Home Upgrade Grant is ‘a drop in a vast ocean’

A government announcement that 4,300 low-income households will benefit from the first wave of its Home Upgrade Grant (HUG) scheme has been branded “a drop in a vast ocean” by low-carbon campaigners.

Lord Callanan, junior business and energy minister at the Department for Business, Energy and Industrial Strategy (BEIS), announced on Monday (21 February) that the first tranche of HUG funding has been awarded to local authorities

A total of £67 million will be made available to 22 councils in England to upgrade insulation and install clean heating.

The government has said it is the first instalment of the £950 million HUG scheme which is targeted at low-income rented and owner-occupied households living in highly energy inefficient homes.

The £67 million will be used to carry out improvements to up to 4,300 low-income, off-gas grid households, the government has estimated.

Grants will pay for energy efficiency measures such as wall and roof insulation as well as new low-carbon heating systems, thermostats and room heating controls. The works are expected to be delivered before the end of March 2023.

However, Chris Friedler, policy manager at the Association for Decentralised Energy, said it was “disappointing” that the first wave of the HUG scheme will help just 4,300 low-income households.

He said: “While we are glad to see these homes receive help, this is just a drop in a vast ocean of the 19 million homes in the UK that urgently require energy efficiency upgrades, both to combat climate change and to protect households against soaring prices.”

Friedler also said that the number benefiting from the first tranche of funding is a “tiny proportion” of the 1.7 million homes that rely on oil heating and liquefied petroleum gas.

“The first wave of HUG will cover just 0.3% of all homes in this category. Even when accounting for fuel-poor, off gas grid homes in this category, which totals 200,000 homes, this funding still only represents 2% of the total. We look forward to the remaining £883 million to be delivered in phases 2 and 3, but recommend the scheme aims to deliver a more equal distribution of funding across its next two phases.”

Peter Smith, director of policy and advocacy, National Energy Action, welcomed the funding announcement.

He said: “HUG is vital as it deliberately helps low-income households in the least efficient homes which are the most expensive to heat. It’s fantastic to start to see this investment showing the positive impacts that can be achieved when energy efficiency of homes and cleaner heating are deployed together. This could be a core response to the current energy crisis but to date less than half of the government’s 2019 manifesto pledge has been allocated.”

The rest of the £950 million of funding allocated by the government to the HUG scheme last year will be available over the next three years to 2025.

The scheme is part of the £6.6 billion that the government is investing this parliament to decarbonise buildings, of which over £2 billion is aimed specifically at lower-income household households.

Lord Callanan said: “This funding will make a real difference to thousands of low-income households – saving them up to £200 a year on their energy bills through upgrades like better insulation.”