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Report 12 February 2025

Spending Review 2025 – our representation

With higher energy bills likely to remain a reality for most households over the next decade, upgrading our inefficient homes has never been more important. The intention of the Warm Homes Plan recognises this with its ambition to retrofit five million homes over this Parliament.

To accelerate and derisk delivery of the Warm Homes Plan, the UK Government should create a national expert retrofit advice service for England. This would make public money go further and drive in private investment, whilst also helping to cut energy bills and meet the 2030 clean power target. 

The Warm Homes Plan directly supports the economy in three ways:

  • Permanently lower energy bills through insulating homes
  • Increase the resilience of the UK economy to future energy price shocks
  • Increase certainty of electricity demand which in turn will lower the cost of renewable electricity generation deployment.

Our proposal: Support the Warm Homes Plan with a national expert retrofit advice service in England

Our representation is a proposal for a national, expert retrofit advice service for England as an essential piece of infrastructure for the Warm Homes Plan to ensure it delivers on its ambitions and supports the economy.

Why we need a national retrofit advice service

A key barrier to the success of the Warm Homes Plan is the current complex and confusing process for households looking to upgrade their homes. This leaves people unsure where to find trusted information about what measures are suitable for their property or if they are eligible for financial support through UK Government schemes.

Advice services help overcome this barrier by giving people the help they need, tailored to their circumstances and engaging and empowering them to go ahead with changes to their home.

The lack of impartial, tailored advice provision is most prevalent in England, with advice services already in place in Scotland, Wales and to some extent in Northern Ireland. Although there are some pockets of expert local advice and support for households in parts of England and growing specialised one stop shop provision from some combined authorities, overall existing provision is patchy and variable.

This means, at present, that advice provision in England is not sufficient to drive the necessary pace and scale of retrofit to meet the Warm Homes Plan’s ambitions.

What a national retrofit advice service would look like

This would be a ‘single front door’ digital first service providing a simple and tailored customer journey building on or incorporating the UK Government’s current provision. The majority of people would be served digitally but where there are complex homes or situations, additional support would be provided digitally or on the phone from an expert advice service to facilitate action.

People will be given clear, action-focused advice, tailored to their personal circumstances on the most effective way to upgrade their homes, accelerating home upgrades and installations of low carbon technologies.

An expert retrofit advice service would be relatively low cost

The exact cost of such a service is highly contingent on how many people the UK Government would want a service like this to help each year, as well as how it is structured, the measures it prioritises and the degree and depth of specialist advice it provides.

Based on our delivery of comparable services, we estimate that such a service would cost in the low tens of millions per year, but the exact cost would be highly dependent on its scope and configuration.

This would be comparatively low cost compared to the £3.4 billion already allocated to the Warm Homes Plan, with more to come to meet the expected £13.2 billion spend. It would also provide significant return on investment – based on our delivery experience, every £1 spent on providing expert, tailored advice returns almost £15 in lifetime savings for the households we advise through Home Energy Scotland.

Impact: driving improved retrofit outcomes in England

From our work delivering free, impartial and tailored advice on behalf of the Scottish Government, we know advice drives retrofit rates and uptake of low carbon technologies. A national expert retrofit advice service for England would result in three key outcomes:

Make public and private money go further

The service would help deploy UK Government money much more efficiently by increasing direct referrals to fuel poverty schemes, enabling the take up of fully funded measures for eligible fuel poor homes (such as through the Energy Company Obligation and the more recently announced Warm Homes: Local Grant scheme).

At present, the Committee on Fuel Poverty estimate that only 10-30% of ECO is spent on fuel poor homes and a significant proportion is spent on lead generation. Where households could receive support from several sources (e.g. UK Government, combined authority or area-based schemes) the service will present these options clearly so people can choose what is right for them and their home.

The service would also mobilise private finance by giving households the personalised advice they need to confidently invest their own money in the right measures for their homes. It won’t compete with the private sector but facilitate it by referring households who have received expert, impartial advice into their services.

We know from our delivery of Home Energy Scotland that advice services form a key part of the green economy, driving markets for everything from low energy light bulbs to major works such as installing renewables or solid wall insulation.

According to our latest figures, which account for higher structural energy prices in the savings, every year the lifetime savings on energy bills from all customers using the Scottish network are more than £258 million. This money is then available to purchase other goods and services and support jobs in, typically, local and regional economies.

Given the relative size of the English and Scottish populations, pro rata lifetime energy bill savings for such a proportionally sized similar service in England would be more than £2.5 billion annually.

Accelerate and derisk delivery of the Warm Homes Plan

By giving people clear, action-focused retrofit advice, tailored to their personal circumstances, home upgrades and take up of low carbon technologies will accelerate.

After receiving advice from a Home Energy Scotland advisor, 42% of customers install at least one energy efficiency measure, low carbon heat or renewable energy improvement and a further 42% of customers plan to install at least one in the next 12 months. Of the measures installed, among the top five typically attributed to Home Energy Scotland advice are air source heat pumps, solar PV and solid floor insulation.

Having a national service in place in England, which works alongside existing local services and fills in significant gaps to end the advice postcode lottery, will also deliver consistent outcomes so that more households across the country living in inefficient homes feel the benefits of lower energy bills sooner and on a continuous basis.

According to ECIU, those living in the most inefficient homes (EPC F) with high energy demand levels will pay over £600 more than pre-crisis and around £440 more than a more efficient home at EPC band C this winter.

A national expert retrofit advice service would work in partnership with existing and any future national statutory energy advice services or local services wherever these are present, offering a simple and seamless customer journey.

It would help to address the issues consumers face at the early stages of the retrofit journey, whilst also providing post installation support so consumers are confident in operating their low carbon heating system or know where to turn if things go wrong. This will take these issues off the hands of local services meaning they can use their resources much more effectively and focus on installing retrofit measures.

The national expert retrofit advice service would also enhance consumer protection, for example by signposting consumers directly to accredited installers and enabling them to identify and report scams. By providing this support, the service would derisk delivery of the Warm Homes Plan, giving the government more visibility to act quickly on scams to avoid consumer detriment and give households the confidence to upgrade their homes.

Help achieve the UK Government’s clean power target

By helping to accelerate uptake of low carbon technologies, such as heat pumps, solar panels and batteries, advice will help meet the government’s 2030 clean power target. MCS data shows that Scotland has tended to install two times more air source heat pumps and rooftop solar than England since 2017 (although this gap has narrowed over the last 18 months particularly for solar).

The key differentiating factor is the availability of impartial advice in combination with green finance, which acts as an important driver to getting these technologies into people’s homes and reducing our reliance on fossil fuels, as each heat pump installed reduced home gas used by at least 70%.

Meeting the clean power target will help to increase the resilience of the UK economy to future energy price shocks. According to modelling by E3G, if the clean power target is achieved, a gas price shock in 2030 equivalent to the one experienced in 2022 would raise the typical annual household electricity bill by only £71 – less than 9% – compared to the threefold increase we saw in 2022.

This meant the government had to spend £44 billion to support households with their energy bills. Delivering the clean power mission would therefore provide significant protection for households from very high gas prices.

The certainty of the arrival of additional electricity demand from electric heating and batteries (and electric vehicles) is an important factor in the deliverability of the clean power by 2030 and the longer term 2050 target.

Certainty of demand will lower risk for investors in renewable generation build out, in turn lowering the cost of capital and therefore lowering the overall cost for building electricity generation needed for 2030 and beyond.

At the same time, we must increase home retrofit rates to reduce overall household energy demand as higher levels of electricity demand will make it more challenging to achieve clean power. Reducing household energy demand is therefore also a crucial component of the clean power mission.

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Last updated: 12 February 2025