Decarbonising UK Housing: An insight into government funding, retrofits, and legislative pressures

It has been well circulated since the release of the Climate Change Act that the Government has committed the UK to be net zero carbon (NZC) by 2050.

The social housing industry, as with all, is facing an unprecedented challenge to improve the carbon and energy efficiencies of their housing stock, all while continuing to deliver new build energy efficient homes in order to address the housing crisis.

A much more pressing challenge for our social housing Registered Providers (RPs) lies with local government however, who are setting more immediate NZC goals; several of which have set a target as early as 2030.

Legislative drivers put in place over the past few years, coupled with the growing fuel poverty crisis, have identified a funding gap with which all but the most cash rich RPs are struggling.

This has never been more apparent in the fact that currently 34% of UK social housing stock is below the agreed minimum EPC-C rating*. The UK, therefore, needs to improve the efficiency of approximately 1.5 million homes** in order to meet the Governments Clean Growth Strategy, which requires homes to have an EPC-C rating or higher by 2030. This is a target the sector will miss if we continue with current retrofit plans.

With post Brexit supply chain delays and high demand for low-carbon heating solutions, there is a growing need for informed, cost-effective retrofit models to be devised for the UK social housing industry to meet the strategic goals of government.

These retrofit models need to not only provide pathways to EPC-C but also look beyond these EPC (Energy Performance Certificate) ratings by considering a fabric first approach with innovative technologies that combine cost effective solutions and carbon efficiency with end-user comfort.

The Social Housing Decarbonisation Fund (SHDF) is the only bespoke sustainable retrofit funding available for RPs. The UK government department for Business, Energy & Industrial Strategy (BEIS) has allocated £3.8bn to be released by the fund over a 10-year period.

A demonstrator fund of £62m, and a first wave of £160m have already been allocated but the delivery of these pipelined projects has been significantly delayed holding back the sectors decarbonisation and NZC progress.

The second wave of funding is due to launch mid-Q3 2022 at £800m. Preparation for the fund release is already underway, with the challenge of dated stock condition data being the first hurdle to beat. A barrier RPs will need to overcome through the utilisation of energy modelling and other tools in order to gain a wholistic view of the current shape of housing stock.

The challenge does not stop here, if and when funding is secured, already stretched RPs will need to ensure project delivery is rigorously planned and managed to avoid any longer delays in the decarbonisation of UK Housing.

For specialist advice on how you can access funding, manage project delivery, and meet your decarbonisation ambitions please contact dominic.ward@dreso.com.

*Statistic gained from The Gov English Housing Survey
**Based on the National Office of Statistics Registered provider social housing in England - stock and rents 2020-2021 Report that said 4.4 million units were declared by RPs in 2021