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Recommendations for the government's Warm Homes retrofit strategy

TUC Briefing
Report type
Research and reports
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What could the Warm Homes Agency and Warm Homes Plan achieve 

The TUC believes that the Warm Homes Agency and Plan has potential to: 

  1. Save families hundreds of pounds and slash fuel poverty 
  2. Get Britain back on track to meet our climate targets 
  3. Deliver good skilled jobs for tradespeople in every part of the country 
  4. Drive up job quality for all retrofit jobs, regardless of the skill level required 
  5. Act as an instrument of industrial strategy, providing certainty on the retrofit project pipeline, enabling greater investment into delivery, supply chains and skills  
  6. Replacing the stop-start, short-term target failures of recent years with long-term stability and plans  

Top TUC policy priorities for a Warm Homes Agency and Warm Homes Plan  

  1. Use the Warm Homes Agency to establish stability and longevity in the retrofit works pipeline, deploying an active industrial strategy and guided by a single national purpose   
  2. Dedicate the majority of the government’s additional £6.6bn funding for the delivery by local authorities. Initially, funding should be apportioned across local authorities according to relative fuel poverty of their populations. Alongside delivery, local authorities should be given responsibility for the development of local retrofit delivery strategies. 
  3. Ensure that retrofit work is rolled out on a well-planned, accountable, worst-first basis that recognises the benefits of a neighbourhood level approach. 
  4. In-house delivery should be the default setting for retrofit delivery coordinated by local authorities, with a Retrofit Direct Delivery Accelerator, grants for workforce skills development, and in-sourcing loans smoothing the transition. At a minimum, retrofit coordinators should be directly employed in every local authority to support quality, accountability, and job creation. 
  5. In leveraging private funds and offering government-backed loans, a principle should be established that retrofit always pays; repayments should never exceed the real value of the savings to energy bills achieved by retrofit. 
  6. Ensure that jobs in retrofit are high-quality by supporting direct employment, with strong procurement requirements, adherence to nationally negotiated terms and conditions, and a national training programme for new entrants and career-transition workers. 
  7. Empower the Warm Homes Agency to develop a multi-decade National Retrofit Plan, with timelines to upgrade all UK homes to desired energy efficiency standards – in line with CCC targets. The National Retrofit Plan should aim to provide stability and enable investment into delivery, supply chains and skills with an initial 10-year implementation phase. 

A turning point for workers and for the UK 

The opportunities of a serious, ambitious, and well-funded national Warm Homes Plan are enormous.1

Inefficient housing has unparalleled health,2 productivity,3 and carbon emissions 4 costs to society, and pervades every community in the UK.5 Solving the homes inefficiency crisis across the diversity of the country calls for mission-led, joined-up, community-empowering, modern government policy, bringing shared benefits.6

The enormous variability of effectiveness of previous national schemes 7 (with outcomes varying in quality,8 impact,9 and ‘depth’ of retrofit,10 and market/demand stimulation occurring inconsistently and unevenly)11 has shown that the design of schemes makes a huge difference to their results. 

Having surveyed a significant proportion of the data, analysis, and proposals from the government, academics, trade bodies, trade unions, and interested community groups, the TUC has developed specific recommendations for the delivery of Labour’s Warm Homes Plan (and related policies) as set out here. We are keen to work constructively with the government on these proposals and policy that emerges in this field, and are happy to offer further thoughts and assistance as required. 

Detailed recommendations 

Industrial Strategy, Coordination & Stability 

To provide the certainty that allows investment into delivery, skills and supply chain, and end the stop-start failures of recent years, DESNZ could  

  • Recognise and treat the £6.6 billion Warm Homes Plan as an explicit industrial strategy intervention by DESNZ, developed and implemented as part of a broader DESNZ industrial strategy and policy framework for the home energy improvement sector across the UK. 
  • Empower the Warm Homes Agency to provide a greater level of coordination and a single national purpose across the government’s delivery of domestic energy efficiency. It should be integrated within a mission-led approach to upgrading UK homes in line with climate targets. 
  • Task the Warm Homes Agency with standardising the prioritisation methodologies, delivery options, and carbon emission outcomes that government expects local government, retrofit scheme delivery partners, and the private sector to adhere to, ensuring quality of delivery12  
  • Provide long-term stability by establishing the Warm Homes Plan as a core component within an over-arching multi-decade National Retrofit Plan developed by the Warm Homes Agency. This should lay out timelines and schedules to upgrade all UK homes to desired energy efficiency standards, in line with CCC recommendations, with ten year implementation phases to provide stability for investment decisions. 
  • Task the Warm Homes Agency with developing ten year implementation phases and pipelines, will enable local government, training providers and businesses to invest with more certainty into growing delivery capabilities, addressing workforce skills development, training time lag, the process of in-sourcing, and investments across the retrofit value chain (including into domestic manufacturing of retrofit materials). Ten year implementation phases will also align with the government’s plan for a ten-year Infrastructure Strategy overseen by NISTA. Similar to the Infrastructure Strategy, this should give certainty about the project pipeline 
  • The Warm Homes Plan and the National Retrofit Plan should be developed in close consultation with trade unions, industry, and local authorities.13

Local delivery 

  • To reap maximum impact,14 the Warm Homes Plan should site responsibility for the development of retrofit delivery strategies and priorities in local authorities.15
  • The Warm Homes Plan should focus on tackling the worst homes in every locality (i.e., those most expensive-to-heat, least conducive to health, and with most inefficient heating systems) and on scaling up the sector for future phases of delivery. It should see a rapid pivot of existing local delivery to the neighbourhoods which need it most, alongside the building local, and sustainable workforces nationwide. 
  • All local authorities should be tasked and funded to produce priority neighbourhood plans within the next year. These place-based route maps should plot the local delivery of the Warm Homes Plan and set out specific plans for delivery of a first phase, modelled on the Priority Neighbourhoods scheme in Leeds16 and the close accountability of local authority delivery seen at Doncaster 17 and proposed by York.18
  • These plans should be obliged to take account of principal local buildings archetypes,19 the maturity of the retrofit sector locally,20 the neighbourhood level relationship between housing and deprivation,21 Local Area Energy Plans, ongoing local projects, and the provisions of the Local (Development) Plan to propose the most efficient and greatest impact delivery methodology for the locality 
  • Wales, Scotland, and Northern Ireland should have the option to tailor the missions of the Warm Homes Plan within their boundaries 
  • All local authorities should also be tasked and funded to produce local area energy plans (place-based energy infrastructure development plans with clear route maps to achieving 2030, 2035, and 2050 emission targets)22 which complement and support their priority neighbourhood plans 
  • The priority neighbourhood plans and local area energy plans should be developed in close consultation with local residents, potential delivery partners, the trade unions recognised by the local authority, and local educational institutions 

Direct delivery 

In-house delivery can bring a range of benefits to local communities, the local authority, and to delivery of climate action. These include longer-term skills planning, improved coordination, decent work for public sector workers, flexibility for authorities to allocate resources where they are needed in a timely manner, improved democracy and accountability, service quality improvements, and greater efficiencies which help deliver value for public money.23

  • In-house delivery should be the default setting for retrofit delivery coordinated by local authorities, supported by a robust system of forward planning and comprehensive plans to avoid local authorities being forced to outsource due to short-term pressures.24 Existing outsourced retrofit programmes should be insourced when contracts expire or where it can be demonstrated that it would in the public interest and offer value for money to terminate a contract and bring the service in house. 
  • When outsourcing is considered, public bodies should be required to carry out a comprehensive public interest test first to demonstrate that an in-house solution is not possible and demonstrate a clear public benefit for outsourcing. This reflects the commitments the government has made in its plan to Make Work Pay. If outsourcing of public services is deemed to be in the public interest, robust legal and regulatory measures should be in place to ensure decent work, transparency and accountability are at the heart of all public contracts. These should include comprehensive two-tier workforce regulations, and a statutory procurement framework which enables decent work and full transparency.  
  • The Warm Homes Agency should have an active role in supporting the insourcing of retrofit and other local authority workers 25 through a range of levers, including: 
  • the creation of grants for workforce skills development 
  • making insourcing loans (repayable over time from procurement savings) available to local authorities that choose to deliver retrofit works in-house 26
  • the creation of a Retrofit Direct Delivery Accelerator and Hub, hosted by DESNZ or DHCLG, to support local authorities with insourcing knowledge, skills development, standard contracts, standardised and affordable training programmes for directly employed workers, supply chain mappings, and collective tenders 27

Public funding consolidation and rationalisation 

  • The majority of the £6.6bn committed new funding should be dedicated to the delivery of the Warm Homes Plan, including dedicated funding for local authorities to develop priority neighbourhood plans. 
  • Funding for Warm Homes Plan deliverables (covering retrofit works, local engagement,28 sectoral development, worker education, and associated costs) 29 should be made available directly to local authorities, and apportioned across local authorities according to an assessment of the relative fuel poverty of their populations.30 Funding tranches during the first ten years should made available at intervals chosen by each local authority according to their assessment of their potential in their priority neighbourhood plans31
  • Existing schemes should be consolidated over time, to provide a simpler set of routes to delivery, but allowing delivery partners time to adjust. Funding for SHDF3 could be redirected to the Warm Homes Plan. Funds currently sited within BUS2, ECO4, and GBI could be consolidated into a Household Grant scheme to which owner-occupiers and landlords can apply directly for specific properties and to which occupiers can be referred by their local authority or NHS Trust.32 This would continue to collect funds from energy companies via an updated and ongoing Home Heating Cost Reduction Obligation, but administration should be run from within national government with work assigned to relevant local authority teams. 
  • Household Grant referrals should work in a similar way as they have under ECO Flex, except that only deep rather than piecemeal retrofit work should be conducted, local targets should be set for the number of allocations, and work should be conducted by local authorities cognisant of the programme of works within their Priority Neighbourhood Plan 

Leveraging private funds 

  • A fair funding mechanism will be needed, whereby public funds cover upgrades that homeowners cannot afford, and part- or match-fund upgrades that landlords and homeowners cannot afford alone, while wealthy households are asked to pay their way. In the early phases of delivery (when wholly unsustainable homes containing low-income households are being treated), the majority of works should be provided for free (via neighbourhood schemes or targeted grants) or at low cost via loans.33 Over time (as less inefficient homes and more affluent households are included), more will need to be asked of landlords and homeowners 
  • Collection of rechargeable costs should always be made as easy and fair as possible, with long-term government-backed loans (associated with properties not households), options of deferment and payment holidays made available, and partial works done by households themselves rewarded.34 A principle should be established that retrofit always pays; repayments should never exceed the real value of the savings to energy bills achieved by retrofit 35
  • The government should ambitiously explore new funding streams to help with costs, including incentives for homeowners to commission retrofit works ahead of the public roll-out (government-backed savings schemes, awards from the Household Grant scheme), cost-easing measures (long-duration home improvement repayment plans),36 and reallocation of funding to retrofit projects from projects which would benefit from their completion 37

Local and democratic accountability 

  • Consensus and buy-in must be ambitiously pursued. Priority Neighbourhood Plans should be encouraged to be flexible in how they propose the delivery of the projects and works they recommend.38 Local authorities should be encouraged to innovatively address the maturity of relevant supply chains and providers in the locality, the additional local funds available or raisable,39 the special timeframes needed for delivery in different neighbourhoods, and local appetite for works 40  
  • All local authorities should be obliged to recruit and maintain sufficient PAS2035 accredited retrofit coordinators on their own staff lists to help to devise their Priority Neighbourhood Plan and coordinate the works in the public interest.41 All works undertaken using public money should be managed by directly accountable local authority retrofit coordinators 42

Job quality, workforce development, and transition support 

  • Recognising that the retrofit sector is not large enough,43 not growing sufficiently quickly,44 is still characterised by precarity and poor terms45 , and that government market incentives have not made the difference needed in the past,46 the Warm Homes Agency should promote significant workforce development policies 47 , including conditions attached to the Warm Homes Plan. 
  • The Warm Homes Agency should have an express goal to ensure that retrofit jobs—regardless of the skills level required for the individual job—are quality jobs, with good terms and conditions, secure contracts, and good pay, transforming the sector away from precarity and poor terms. This is a minimum expectation for a sector that is so dependent on public funding. 
  • The Warm Homes Plan should require: 
  • direct public employment by the local authorities coordinating the work (unless the public interest can be satisfied, as stipulated above) 
  • that all workers employed to deliver retrofit programmes supported by public funding are on nationally negotiated terms and conditions (such as existing union-industry frameworks like NAECI,48 ,  or new parallel agreements) 
  • that all bodies delivering public works recognise and work with the trade unions of their employees, and work closely with trade union health and safety reps to ensure high standards of health and safety for their workforce 
  • The Warm Homes Agency should commission the creation a new standardised suite of vocational courses on all aspects of retrofit delivery 49 , encourage local authorities to create thousands of retrofit apprenticeships, and support colleges 50 to include retrofit courses in their offers by making development funding and tutor pay uplifts available 51
  • There should be a national retraining programme for unemployed individuals, workers looking for a new career, and workers in jobs that face particularly significant decarbonisation challenges. This would need to be delivered in partnership with Skills England, as home upgrades are only one potential destination sector where such a scheme is likely needed. Learning from the Skills Bootcamps,52 this programme should make courses available for free to unemployed people, 53 and, learning from the German Transformationskurzarbeitergeld programme, it should support at-risk fossil fuel workers to retrain while maintaining their current employment without significant loss of pay 54
  • The priority neighbourhood plans should look to partner local authorities with and grow the retrofit offers and recruitment of local colleges to support local efforts 55

Homeowner information 

  • The government should adjust the SAP/HEM so that scores/EPCs more accurately reflect the efficiency of partially renovated/mixed-build and atypical homes, significantly improving our understanding of the challenge and resolution options 56
  • The government should also expand EPCs with new home efficiency logbooks on which energy efficiency measures and new PAS2035 ‘medium-term improvement plans’ are recorded 57

Deep retrofits 

  • All publicly funded works must follow a dual ‘worst first’ approach, with the least efficient individual homes and most deprived neighbourhoods being prioritised for retrofit work. National goals should establish date targets by which there should be no homes with an EPC of G, F, E, D, and, eventually, C58  
  • All publicly funded works should aim to upgrade homes to EPC B or better (while pragmatically recognising archetypal constraints) in a single programme of work 59
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