Only 27% of homes have been fixed in a £1.8bn Govt programme
Report shows only 27% of homes have been fixed in a £1.8bn Govt programme, as red tape and asbestos keep thousands in the cold
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Thousands of homes will face another winter of fuel poverty due to a raft of failures as scheme to fix them hits buffers
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Hundreds of millions of pounds of allocated grant cash is yet to be spent – despite the needs growing
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Dozens of councils and smaller housing associations were not awarded cash handouts which could have helped households in critical need of support
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Wide regional disparities exist – with London accounting for just 6% of installs to date, despite having the greatest concentration of social housing in England
New analysis from Domna Homes, a retrofit specialist, has revealed that only a fraction of homes in desperate need of retrofitting have been helped under a £1.88 billion scheme to decarbonise social housing intended to bring 94,096 homes up to modern energy efficiency standards.
The scheme, entitled the Social Housing Decarbonisation Fund (SHDF) Wave 2.1, launched in September 2022 and its delivery window was originally slated to end 30 September 2025. While several projects have now been extended, there appears to be little prospect of the government meeting its commitments on fuel poverty, and spending the earmarked funds. This is all the more troubling as Wave 3 of the programme has been awarded and is already partway through its first year – with few programmes having gotten off the ground.
Domna’s founder, one of the world’s leading experts on construction and retrofit, is calling on energy secretary Ed Miliband to step in and cut some of the red tape holding back efforts to take thousands of households out of fuel poverty as the nation readies itself for more price rises in October.
As of June 2025, just 25,000 homes – around 27% of the 94,000 originally targeted – had received improvements1. Homes have also had less done to them than planned, meaning lower impact on fuel bills and draughty rooms – with 51,500 energy efficiency measures installed, compared with nearly 297,000 promised when the programme was announced2. With Wave 2.1 programme due to end later this month, there appears little prospect that the targets will be met.
Progress has been dogged by administrative red tape, spiralling costs and technical hurdles. Asbestos emerged as the most commonly mentioned technical problem impacting the progress of installations3, whilst many projects reported being bogged down in onerous reporting requirements4. Resident engagement issues – including refusals of access in blocks of flats that stalled whole projects – and delays in dealing with Distribution Network Operators on solar PV connections have also been logged as severe risks.
Costs have consistently overshot expectations. The average cost of external wall insulation, for example, rose by 25% compared with bid assumptions, while air source heat pumps came in 34% higher. Costs have grown dramatically within the programme as well – a year ago, external wall insulation costs were 17% above bids, and air source heat pumps, 7%.
Rather than seeing efficiencies as the programme goes on, costs have grown. At the same time, the number of measures per property has fallen from 3.2 in original plans to 2.0 actually delivered as of June, reflecting a shallower depth of retrofit. This has also gone down during the programme – from 2.7 in July 2024.10 We are not trending in the right direction.
Despite the setbacks, the programme has shown the potential of large-scale retrofit: where works have been completed, the proportion of homes achieving a top EPC rating of A–C has leapt from 2% before installation to 99% afterwards.
Anna Moore, a leading expert in housing retrofit, and founder of Domna Homes, which works with major housing associations and institutional investors to manage large-scale retrofits, said:
“This is one of several vital initiatives that has the potential to help millions of people, particularly those facing another miserable winter of fuel poverty. But there’s no point allocating billions of pounds of taxpayer cash if we’re going to undermine it through red tape. Secretary of State for Energy Security and Net Zero Ed Miliband is one of today’s best regarded and most conviction-led politicians, and this will be worrying data for him. Much of it predates this government. Without greening the country’s ageing leaky housing stock, we stand no hope of meeting our legal net zero commitments.
“The two new reports cover data until July 2024 and June 2025 – with worrying cost growth over the lifetime of the programme and a reduction in the amount of work actually being done to houses as a result. With little time left until SHDF Wave 2.1 ends, it looks very unlikely that we will hit our targets and actually spend this much needed money – in large part due to administrative red tape in procurement, poor planning, and flawed initial designs.
“Another striking statistic is that very few small housing associations have been awarded and participated, despite owning some of the country’s most in-need stock12. Similarly, only about half of local authorities have tapped into this funding13. It is vital that civil servants use every lever available to ensure people living in poor-quality housing receive the support they need, and that central government makes this possible for them.
“We are also struck by the regional disparities. London has the highest number of socially rented homes in England, but accounted for just 6% of retrofits delivered to date.14 We need meaningful differences in cost caps and support on the ‘boring but important’ things like parking permits that truly get in the way of delivery.”
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