The government said it would upgrade social housing to help renters with energy bills. It’s not going well

A government scheme to upgrade social housing to reduce energy bills and tackle the climate crisis has been extended for three months after work was carried out at just 7 per cent of homes.

The first wave of the Social Housing Decarbonisation Fund was due to be completed in March, upgrading 20,000 homes with measures including insulation, heat pumps and double glazing to bring draughty homes up to at least Energy Performance Certificate C standard (EPC). 

But, as of December, the government’s own figures show just 1,564 households have had works completed, with 2,222 measures fitted – around 7 per cent of the total homes promised. The delay in works has seen the government extend the grant funding period to June after just 16 of 66 councils reported completed works.

The lack of progress comes as the cost of living crisis is seeing people pay more in energy bills, while the clock is ticking to hit net zero by 2050.

“We’re not really moving anywhere near quick enough,” said Annie Owens, policy and practice officer at the Chartered Institute of Housing. “We have the oldest housing stock in Europe, the leakiest housing stock in Europe, other countries have done much better, faster work to insulate their homes to move to heat pumps, other countries are being quick on this. And to date, we haven’t done enough.

“This is all to meet net zero by 2050. The longer you leave it, the more you have to do in that short amount of time.”

The Department for Business, Energy and Industrial Strategy has now extended the deadline for housebuilders to upgrade 20,000 homes from March to June.

A government spokesperson said: “Wave 1 of the Social Housing Decarbonisation Fund is progressing well, and the project is on track to deliver. Extending the deadline allows the continued delivery of energy efficiency measures.”

Buildings are the UK’s second largest source of climate emissions after surface transport and, with more than 16 million homes in the UK below EPC C, the race is on to upgrade them and slash emissions.

The UK Green Building Council (UKBGC) has a dim view of the progress made so far. A UKGBC scorecard released in December found there had been welcome progress in “scaling up” over the past year but not on the scale required.

The first wave of the Social Housing Decarbonisation Fund was launched in August 2021 with the government committing £179m in grant funding to upgrade homes.

The majority of the 1,500 homes that were upgraded saw works completed in November and December 2022.

Durham led the way. The council has installed 865 measures and upgraded 468 homes and in November, which accounted for virtually half the measures and properties retrofitted across the country.

Michael Kelleher, Durham County Council’s head of planning and housing, said: “We are pleased to currently be leading nationally on the delivery of the scheme, and we continue to work with our partners to support households in becoming more energy efficient, helping them reduce their carbon emissions and save on energy costs.”

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The other big push has been seen in West Yorkshire where 566 measures have been installed in 500 properties.

No other local authority has managed to upgrade more than 100 properties. So what’s the hold up?

Owens told The Big Issue a labour shortage is affecting building plans.

The first wave of the Social Housing Decarbonisation Fund was supposed to bring 9,000 jobs in the green energy sector but the reality right now is that local authorities are competing for the same workers who are up to PAS 2035 standards.

“Labour is the really big problem,” said Owens. “There’s a really big skill shortage for people trained to do retrofit and it’s not just being able to do it, you need to be trained to do it in a specific way.

“There’s a barrier in getting people trained up but there’s also quite frankly not enough people with the skills across the country to do it and everybody’s bidding for the same contractors to do the same work at the same time.”

Meanwhile, costly construction materials are also making it harder for councils to find funds despite government grants.

The latest UK construction materials inflation index shows prices were 11 per cent higher in December 2022 than a year ago.

Prices are rising at a lower rate than June 2022’s peak of 26 per cent after Russia’s invasion of Ukraine but remain 41 per cent higher than pre-pandemic in January 2020.

Rising prices are particularly high for insulation. Huge demand and energy-intensive production means prices were 38 per cent higher in December 2022 than in the previous year.

The challenges have seen a pitiful number of homes upgraded in what was a tight timeframe, said Owens.

“I hope we will see the full kind of scale delivered. I don’t think it’s realistic to expect that to happen by March, it was always an unrealistic timeframe but social landlords are really committed to delivering it. They are doing the best they can in difficult circumstances.”

The second wave of the fund is set to be much bigger with £800m in funding to make 100,000 social homes more efficient by September 2025.

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The National Housing Federation, which represents housing associations, has called for the government to release the remainder of the fund – £3.8bn over the next decade – so housebuilders can kick off a long-term efficiency drive.

But with no sign of solutions to the root causes of delays, it’s a bad sign for reaching net zero by 2050 and to limit rises in global temperatures to 1.5C. 

“This is the kind of example of exactly why we’re not going to hit that 1.5C,” said Ciaran Malik from the Architects Climate Action Network – the campaign group handed a petition to the government this week calling on ministers to regulate carbon emissions from construction. 

“This particular programme, especially with the rise in energy bills, should have been really attractive, it should have been an easy win, people should be wanting to do this in order to reduce bills.

“This is meant to be one of the easy ones, retrofitting homes and making them more comfortable and removing issues of moisture and mildew. This is meant to be the stuff that is easy for people to understand and get involved in and see the benefits straight away. If it’s not, it’s not boding well for the UK to hit its net-zero targets.”

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