Target social housing upgrade cash at neediest, councils urge

The government should stop forcing councils to compete with one another for social housing decarbonisation grants but target the cash at the neediest instead, according to a new report.

The report, which has been published by the UK100 network of councils as part of its ‘End the wait. Insulate’ campaign ahead of Thursday’s Treasury Autumn Statement, urged ministers to distribute money from the Social Housing Decarbonisation Fund (SHDF) based on need.

The SHDF currently works by inviting councils to compete for funding to upgrade the energy efficiency of their local social housing stock.

Instead, the report advocated the programme being rolled out at scale on a place-based approach, which would enable SHDF to be allocated more effectively to low-income households.

Deploying the £900 million fund earmarked for the SHDF over the next three years could reduce energy bills for more than 180,000 predominantly low-income households by over a third – up to £1,500 a year.

The remaining £1.9 billion pledged to the SHDF between 2026 and 2028 could improve the energy efficiency of another 370,000 social housing households.

Avoiding the need for competition would enable the government to target its SHDF more effectively without incurring any additional cash on top of the sums that have already been committed to the programme, the report said.

It argued that beyond the end of the programme in 2028, using the same approach could upgrade the UK’s remaining social housing properties to net zero standard by 2050 for £16 billion worth of investment.

The SHDF should be administered alongside the UK Investment Bank and mobilise new finance models that capitalise on private investors’ appetite for social housing energy efficiency upgrades, UK100 recommended.

The total public investment proposed in the report is equivalent to less than a fifth of the £100 billion savings, which the report estimated chancellor of the exchequer Jeremy Hunt will make following his decision to cut the length of the Energy Price Guarantee (EPG) from two years to six months, while delivering permanent bill savings for predominantly low-income social housing residents.

Alongside the report, UK100 has published a new poll showing that 75% of households are worried about how they will inform their heat and power bills when the EPG subsidy scheme ends at the beginning of April next year.

Polly Billington, UK100 chief executive, said “Brits are facing a bleak winter. And as the polling shows, many are understandably frightened about what the future holds once the Energy Price Guarantee ends in April.

“But the Autumn Budget presents the chancellor with a golden opportunity to embrace a real, long-term plan to bring bills down permanently. The government has overlooked the importance of energy efficiency for too long. It’s not sexy or headline-grabbing. But our End the Wait. Insulate. report sets out an oven-ready, cost-neutral plan for an energy efficiency drive to alleviate pressure on the most vulnerable – and it won’t cost the earth.”