Five principles to make the Warm Homes Plan work – Inside track

As cold and snow batters the UK, once again the need for warm, well-insulated homes is top of the agenda. Poorly insulated homes drive up energy bills across the country, meaning addressing this issue isn’t just about emissions, it’s about ensuring people aren’t forced to choose between heating and their other basic needs.

The Warm Homes Plan offers a unique opportunity to bridge the cost of living and climate crises and deliver tangible benefits for UK households. Far from being an expense, the Warm Homes Plan represents an investment in national wellbeing, as the consequences of poor housing cost the NHS over 500 million a year.

What is the plan?
Set out in Labour’s manifesto, the Warm Homes Plan is the government’s intention to bring all the current energy efficiency schemes under one umbrella with an overarching strategy and vision. It is due to be announced alongside the spending review, expected in June. Given the dire state of many homes, we can’t afford for this plan to be pushed back.

Here, we set out five principles for its success:

The investment must fulfil the promise
In its manifesto, Labour set out the intention to deliver the Warm Homes Plan, backed by £13.2 billion in investment. Last year, in the autumn statement, the government committed an initial £3.4 billion towards heat decarbonisation and energy efficiency up to 2028. This was lower than the previous government’s commitment.

This year’s spending review must deliver the full £13.2 billion promised to achieve the rate of energy efficiency improvements necessary to end fuel poverty and put buildings on the path to net zero by 2050. But investment alone is not enough. Countless insulation schemes have been and gone in the past 14 years, the Warm Homes Plan must maintain a clear long term vision, setting out how investment will be spent over the course of parliament and how many homes will receive support. The government must consider the learning from existing schemes which have been plagued with administrative and financial challenges.

Strong regulation needs to drive change
Regulation must underpin the Warm Homes Plan, to forge new UK markets and drive the price of innovative technology down. One crucial piece of the regulatory puzzle is the clean heat market mechanism which aims to increase competition and cut heat pump prices. It works by obligating appliance manufacturers to meet targets for the proportion of heat pumps they sell each year compared to boilers.

Despite its potential, the introduction of this mechanism has continually been pushed back, originally due to start in April 2023, it will now not come into force until April 2025. Not only this, but the original proposals mandated a £3,000 fine for manufacturers failing to reach the target, which has now been slashed to a mere £500, taking the teeth away from the mechanism and offering few penalties to those who do not comply.

This model was inaccurately characterised earlier this year as a ‘boiler tax’, but the reality is that targets set for industry are not only realistic but already achievable. They apply pressure on businesses to innovate without impacting consumer prices, lowering bills in the long run by reducing costs for essential technologies like heat pumps. Any floated cost increase to boilers have rightly been described as ‘price gouging’ by former energy secretary Claire Coutinho.

New homes can lead the way
New build homes are a unique opportunity to kick start the warm homes agenda, offering steady demand for investors and preventing costly retrofits later down the line. During the election campaign, Labour promised a solar revolution. The Future Homes Standard, which aims to ensure all newly built homes are well insulated and of high quality, is the perfect chance to make progress. By mandating solar and heat pumps in all new buildings, residents will benefit from lower bills and the government will help to drive innovation.

To complement these regulations, targeted incentives should also be used to encourage landlords and homeowners to make green upgrades. Policies like green mortgages, minimum energy efficiency standards and green stamp duty make these sustainable improvements more accessible.

Affordability and Targeting: Reaching Those Who Need It Most
Current grant schemes often lack coordination and fail to reach the most vulnerable. Reforming these programs as part of the warm homes plan is essential to ensure limited funds deliver maximum impact. Vulnerable groups, including the fuel poor and those with ongoing health conditions or disabilities, must be prioritized to rapidly reduce inequality and ensure the most vulnerable are protected. This will mean that different homes will require different interventions. For some homes, a fabric-first approach will make the most sense, installing efficiency improvements before adopting clean heat solutions and for others, heat pumps alone will be sufficient. And a key component of this work should be addressing systemic issues like smart meters and prepayment meters to ensure access to the best tariffs and support for all households.

Public engagement builds trust
Bringing the public on the journey to achieve warm homes for all is crucial. Persuasive public engagement, combatting misinformation and highlighting positive outcomes, are important to gaining widespread support. Every poorly executed installation, such as shoddy insulation, sets back confidence. Trusted sources, high standards and media support are going to be instrumental in showcasing the benefits of the Warm Homes Plan.

This is more than a contribution to climate strategy. It’s a blueprint for a healthier, fairer and more sustainable future. By following these five principles, combining robust regulation with strategic incentives, more people can have warmer homes and lower energy bills. This is the moment to invest in our collective wellbeing and ensure every household can benefit in a greener future.