The Warm Homes Plan: what local authorities need to know

The Warm Homes Plan is the biggest intervention in home efficiency and clean heat in British history.

With £15 billion set to be invested and an ambition to upgrade five million homes by 2030, it’s designed to:

• permanently lower energy bills
• tackle fuel poverty
• reduce reliance on volatile fossil fuel markets.

The plan places local authorities at the centre of delivery. However, it remains unclear what support the UK government will provide to help scale up local authority capacity.

For senior leaders in local government, this isn’t ‘just another retrofit scheme’. It’s a structural reset that promises:

• A financial offering for every household, regardless of income.
• Development of a new, national delivery agency.
• A renewed push on heat networks and zoning.
• Stronger regulations in the private rented sector.

If the Plan meets its ambitions, local authorities should see:

• Reduced health inequalities.
• Improved energy resilience.
• Lower energy bills for residents.
• Stronger local supply chains and jobs.

Below are the key aspects of the Warm Homes Plan that local authorities need to understand.

Read about the Plan’s impact on consumers.

£15 billion has been committed in the plan. This is due to be delivered through a mix of direct grants, low- and zero-interest consumer loans and other innovative green finance mechanisms. This should help mobilise significant levels of private investment in home upgrades additional to the £15 billion of public investment.

Central to this approach is the £5 billion Warm Homes Fund. This is designed to leverage private finance alongside public funding and support investment across the home upgrade supply chain.

In total, the Plan expects a total of £38 billion to be invested over the Parliament, combining:

• £15 billion of central government funding for the Warm Homes Plan.
• Investment from local authorities and social landlords.
• Funding from private finance mechanisms, such as the National Wealth fund.

The aim is to build a more self-sustaining market for home upgrades in the long term, rather than relying solely on UK government subsidies.

As per page 48 of the plan document, the £15bn package is currently allocated as follows:

Note:

• Funding for low-income homes includes the Warm Homes: Social Housing Fund (WH:SHF) and Warm Homes: Local Grant (WH:LG), with additional WH:SHF funding in 2026/27, bringing the total to £754m through a single grant support scheme for low-income households.

• Further details on post-2027/28 deployment and devolution implications will be set out in March.

• Boiler Upgrade Scheme (BUS) funding will remain in place until 2029/30 with a budget of £2.7bn, including up to £30m for the Heat Pump Ready grant between 2026/27.

• The Warm Homes Fund is delivered through £5bn of Financial Transactions agreed at the Spending Review. This means the funding will be provided primarily in the form of loans or other repayable finance, rather than direct grants, with the intention that the investment is recycled over time.

• ‘Other Programmes’ funding includes DESNZ underspends to support the closure of ECO, delivery transformation (including the Warm Homes Agency), consumer advice, MEES delivery, heat network zoning, and smaller programmes such as rooftop solar.

• The Heat Pump Investment Accelerator Competition is funded separately within DESNZ.

• Barnett consequentials reflect funding adjustments for devolved administrations based on Warm Homes Plan spending in England.

The existing Warm Homes: Local Grant and Warm Homes: Social Housing Funds will initially continue to deliver grant funding. It will then be consolidated into a single scheme for low-income households from 2027/28.

At present, it’s unclear what this single scheme will look like in practice and how local authorities will play a role in delivering it. Further details are expected about the deployment of low-income funding in March.

In addition:

• The Great British Insulation Scheme (GBIS) will end as planned on 31 March 2026.
• ECO4 (Energy Company Obligation) will be extended to end on 31 December 2026, to allow additional time for remediation of non-compliant installations (note there are no additional delivery targets).
• £1.5 billion funding originally allocated to ECO will be redirected to the Warm Homes: Social Housing Fund and the Warm Homes: Local Grant.

The plan sets out the vision for every household in Britain to have the opportunity to benefit from clean energy technology in their home.

It prioritises rooftop solar, clean heating and energy storage, citing the desire to:

• cut energy bills
• reduce fuel poverty
• improve health outcomes
• lower carbon emissions
• deliver a more efficient and secure energy system

Though the technology mix is expected to vary as innovations enter the marketplace, the commitment to date is to:

• Triple the number of homes with solar panels, installing them on the rooftops of 3 million more homes.
• Scale up to delivering over 450,000 heat pump installations per year by 2030.

The Future Homes and Buildings Standards will ensure that new homes and buildings have high levels of energy efficiency and low-carbon heating as standard. More details on the timeline for implementation are expected in Q1 2026.

The plan recognises the effectiveness of heat networks. It highlights how Denmark successfully supplies 66% of all households via a district heat network, with a similar-sized housing stock to the UK.

It’s anticipated that around a fifth of total building heat demand in 2050 will be supplied through a low-carbon heat network. In the short term, the target is to double the amount of heat demand met via networks to 7% by 2035.

The plan signals that local authorities will become strategic stewards of local heat infrastructure. They will play a central role in deciding where networks are developed and how they are delivered.

The Solar Roadmap, published in June 2025, called for a ‘rooftop revolution’, deploying solar PV on homes and buildings to: 

• cut energy bills
• improve energy security
• create thousands of highly skilled jobs across the country

Rooftop solar on homes will make a significant contribution to the ambition of 45 – 47GW of solar by 2030 set out in the Clean Power Action Plan.

The Warm Homes Plan reinforces this direction. It wants to improve access to rooftop solar for low- and middle-income households and the social rented sector by making solar PV more affordable.

The Warm Homes Fund will support local authorities and housing associations in delivering at scale. The UK Government will consider how actions by Crown Commercial Service and Great British Energy can help aggregate demand. This is to reduce the costs of solar PV in the social housing sector and for publicly owned buildings.

Fabric improvements in a home reduce damp and mould, improve thermal comfort, lower the risk of underheating and reduce heating costs.

Significant progress in upgrading homes with insulation has been made. An estimated 71% of British dwellings have cavity wall insulation, and a further 10% solid (Warm Homes Plan page 41, cited: Household Energy Efficiency Statistical release, 2025). The plan reiterates that there is still an opportunity to go further, with many people at risk of fuel poverty yet to benefit.

These upgrades will continue to be delivered via the Warm Homes: Local Grant and Warm Homes: Social Housing Fund. An announcement is due in Spring on the future consolidation of those schemes.

The Warm Homes Plan places strong emphasis on collaboration between energy suppliers, housing associations, gas networks, community energy organisations, and third-sector partners. Evidence from existing programmes shows that trusted, place-based delivery models can improve resident engagement, raise installation quality, and build consumer confidence.

A coordinated, area-based approach enables councils to:

• Align Regional Energy Strategy Partnerships (RESPs), Local Energy Action Plan Partnerships (LAEPs), and housing strategies through Local Plans.
• Target support more effectively at low-income and fuel-poor households.
• Anticipate future electricity demand and plan for grid upgrades that may happen in their areas.
• Achieve economies of scale through coordinated procurement and delivery.

Over time, this approach can deliver wider benefits, including improved public health, local regeneration and skills development, and increased deployment of local renewable energy. It also helps councils present clearer, investable pipelines. This will position them to take advantage of emerging opportunities through the Warm Homes Plan and other UK Government initiatives, including those linked to Great British Energy.

To support the delivery of the Warm Homes Plan a new delivery body will be created.

The Warm Homes Agency will work at both a national and local level (subject to agreement with the devolved governments). It will streamline and consolidate existing organisations previously involved in delivering home upgrades across government and Ofgem.

• It’s expected to start delivering impartial advice from 2027.
• It will coordinate and oversee home upgrades in this Parliament and beyond.
• It will play a critical role in place-based delivery of the plan, building on good practice in local delivery and enabling upskilling.

Local authorities are expected to remain core delivery partners, particularly for:

• Low-income and fuel-poverty programmes.
• Place-based delivery models.
• Local coordination with housing providers and communities.

Exact details about what this means in practice are yet to be revealed. However, these partnerships should provide the foundation for consistent, trusted, and investable local delivery. This will create the conditions for the Warm Homes Agency to support and scale what works on the ground.

The Warm Homes Agency will look to streamline the way households build awareness of and engage with home upgrades. It will do this by providing:

• A digital advice and information platform.
• Phone and online support to ensure everyone has access to help.
• Impartial and high-quality advice will cover clean heating, funding, installers and retrofit options.
• All tenure and consumer types will be supported.

The Warm Homes Agency will also look to work with existing advice providers. Installers, manufacturers, retrofit companies and Trade Unions will work with the agency to support training initiatives, like the Heat Training Grant, and in analysing market demand.

The Warm Homes Plan outlines how the Warm Homes Agency plans to utilise data and technology to plan for and ensure the successful delivery of its goals.

Some examples of how the Agency thinks data can be used are:

• Using EPC ratings, property types, fuel poverty indicators, and thermal imaging to identify homes or local areas most in need of retrofit.
• Compiling data from across the supply chain to understand delivery challenges and share best practice.
• Analysing historic data from relevant schemes to identify fraud trends.

Read about scaling personalised home energy plans using advanced data and digital tools.

The Warm Homes Plan makes clear that the large-scale rollout of clean heat, solar, batteries and other low-carbon technologies must be planned and delivered on an area basis to succeed. As electricity demand grows, coordinated investment will be essential to ensure local networks can keep pace while minimising cost and disruption.

Better alignment between home electrification, electricity network upgrades and local priorities will help smooth the transition to clean heat. It will also reduce pressure on the grid and avoid fragmented or inefficient delivery. Technologies such as rooftop solar and battery storage will play a key role in enabling flexible electricity use and lowering system costs.

The Plan highlights the need for closer working between Distribution Network Operators (DNOs), local authorities, and mayoral strategic authorities.

Ofgem is expected to consult on strengthening the role of DNOs in enabling electrified homes, supporting better-planned network investment aligned with local housing and energy strategies.

Local authorities are identified as critical delivery partners, with their understanding of local housing stock, communities, and supply chains. Existing net zero strategies, regeneration plans, public health duties, and Local Area Energy Plans (LAEPs) are positioned as core building blocks for delivery.

Area-based coordination will also be central to heat network zoning.

New Zone Coordination Bodies (ZCBs) will give councils greater certainty over where heat networks offer the lowest-cost option and the tools to bring these zones forward.

The UK Government has already funded early pathfinders and invested in support via Local Net Zero Hubs. Looking ahead, DESNZ will work with councils, DNOs, the Warm Homes Agency, Ofgem and industry to trial new approaches to area-based delivery. Further detail is expected by Spring 2026.

The Local Power Plan also sets out how community energy and public-sector organisations can support local renewable generation.

The Warm Homes Plan places new emphasis on improving standards in the private rented sector. It confirms that privately rented homes will be required to meet higher minimum energy efficiency standards by 2030.

The plan signals tighter expectations on landlords to invest in energy efficiency and clean heat. Delivery will be supported through national schemes such as the Boiler Upgrade Scheme and wider consumer finance offers. Local authorities will remain central to place-based delivery, enforcement, and tenant protection.

For councils, this means a growing role in aligning:

• PRS enforcement
• housing standards
• fuel poverty objectives
• local retrofit delivery

The Warm Homes Plan represents a clear progress for accelerating home upgrades in the UK and local authorities will continue to play a key role in delivery.

Supported by the new agency, success depends on collaboration across authorities, energy networks, housing providers, and supply chains. This includes data-led targeting, place-based planning and closer alignment between home upgrades, grid investment and local priorities.

If delivered well, the plan promises warmer homes, lower energy bills, reduced health inequalities, greater energy resilience and the creation of good local jobs. However, realising these benefits will depend on delivery that is simple for households, coordinated locally and supported by long-term policy certainty.

If your local authority is considering its next steps, we can help.

We’ve supported hundreds of local and combined authorities to plan, prioritise and deliver retrofit and decarbonisation programmes across a wide range of property portfolios. Together we’ve helped millions of residents save money and live warmer, healthier lives.

Get in touch today and start your journey right.