10 ways the Warm Homes Plan could power up communities
As the snow and frost sets in across the UK, the government’s Warm Homes Plan, now expected after the Budget, will be a timely announcement. Set to invest over £13 billion it has been a flagship policy for Labour since before the election. The Plan underpins the promise to lower energy bills, and the goal to achieve Clean Power by 2030. It also presents a huge opportunity to power up community organisations, not only to benefit from the energy transition but to take a leading role as partners.
Responsible for the Plan is newly appointed Minister Martin McCluskey MP, who described his role in our recent meeting, saying: “I get to bring the clean energy mission home to people, it’s about making people more comfortable, reducing mould, damp and having lower bills”.
While the focus is clearly on households, unlocking change at scale is going to require a shift in approach. We need to move away from considering individual consumers, instead expanding our perspective to whole communities of citizens. Accelerating the roll out of clean heating must focus on building trust, especially considering recent failures from ECO. Meanwhile the adoption of demand-side flexibility with batteries and heat pumps requires significant behaviour change and buy-in across communities. If the Plan doesn’t recognise this shift to community, instead placing the burden on each household to shoulder these changes alone, it will fail in its aims.
But the Warm Homes Plan need not reinvent the wheel. Across the country there are thousands of trusted community organisations, embedded in their local communities, providing services, hubs of support and valued by their neighbours. Harnessing the potential of the social sector, and taking a community approach, will ensure the Warm Homes Plan delivers improvements that lower bills, particularly for so-called hard to reach areas, and at the pace needed to transition away from gas and lower bills for good.
Here’s 10 ways the Warm Homes Plan should be designed to enable this community-led approach:
Deliver with the social sector as partners:
- Recognise trust-building as a critical step in the Plan and commit to working with community organisations as partners to achieve that, overcoming politicised opposition and accelerating the roll-out of technologies like batteries and heat pumps.
- Amend the existing Boiler Upgrade Scheme to allow aggregation of grants for community initiatives including bulk purchases or community-led heat networks outside of zones.
- Optimise the use of financial transactions in the Plan: with £5bn marked out as finance, there must be a coherent plan to ensure it achieves the greatest impact. Working with Social Finance Intermediaries would ensure available funding goes further, reaches deprived areas, crowds in the right kinds of private finance and achieves the governments aims while maintaining quality and accountability.
- With rumours the Plan will now fund the replacement of the failed ECO retrofit scheme, working with the social economy and community organisations as trusted local partners presents a fresh, safe approach to relaunch this critical strand of support. Stepping away from previous model of suppliers and private sector delivery, working with the social sector would provide a clean break, restore trust, increase take up and help achieve additional mission objectives including reducing deprivation and increasing productivity.
Ensure the social sector benefits from the Plan:
- Enable smart financing solutions like property-linked finance to make retrofit a viable option for community buildings as well as social housing schemes run by charities, community land trusts and accredited providers. Currently, retrofitting these buildings can cost more than the underlying asset’s value, making financing improvements impossible.
- Expand the size limitations for eligible heat pumps under the Boiler Upgrade Scheme to support the 10-30% of community buildings currently excluded by the scheme.
- Provide targeted support for fabric and energy efficiency improvements for the social sector, who have been excluded from key schemes such as Industrial Energy Transformation Fund (IETF) for EIIs and the Salix Finance previously available to the public sector. Targeted investment of £429 million could bring all community buildings in England up to standard.
Lower bills to create warmer homes:
- Focus grant funding for PV and batteries for poorer homes and community buildings, as part of a wider retrofit programme to bring down bills and unlock flexibility.
- Lower the cost of electricity to help lower bills and bolster the uptake of heat pumps. Moving some levies into general taxation is the fairest solution, and reforms must extend beyond legacy levies to recent additions including the Nuclear RAB levy that is set to increase bills for decades to come.
- Recognise the community sector as vulnerable to energy price spikes, alongside Energy Intensive Industries (EIIs) and homes in fuel-poverty, by including the sector in initiatives to lower cost of electricity, such as the exemption for EIIs to levies including the recent Nuclear RAB levy.
None of these recommendations require any additional government finance, it’s about choosing the right delivery approach and how the policy is designed, with a starting point of engaged citizens in communities rather than isolated individual households. Shifting from that default and embracing the energy of the community sector will be key to powering up the potential of the Warm Homes Plan.