Treasury responds to sector submission on Labour Warm Homes manifesto pledge

In March 2025, ECA joined eight trade associations, representing 4,000 business, calling on the Government to make good on its manifesto pledge (up to 300,000 homes to benefit from upgrades with the rollout of the Warm Homes Plan in 2025) to spend the full £13.2 million on its Warm Homes Plan to support the upgrading of 5 million homes.

With the sector committed to supporting the delivery of clean heating and energy efficiency, confirmation and reassurance that the pledged funding be allocated is crucial to unlock confidence and investment needed in UK skills and manufacturing.

If pledged, the money would help reduce consumers’ energy bills, increase the UK’s energy security and achieve the UK’s legally binding net zero targets. Failure to commit to this funding will result in damaging and confused signals being sent to investors and risks UK investment being lost overseas.

The Treasury responded: “At the Autumn Budget, the Chancellor allocated £3.4 billion for heat decarbonisation and energy efficiency from 2025 to 2028. This included £1.8 billion to retrofit over 225,000 low-income homes, increasing funding for the Boiler Upgrade Scheme in 2024-25 and 2025-26, and supporting manufacturing supply chains and new heat networks across the country.

The Spending Review is now underway and will be concluded in June, at which point the Government will make further decisions in this area.

The November 2024 announcement included a number of measures from supporting consumers to encouraging innovation and UK manufacturing.

• New regulations to back consumers and encourage innovation.
• Measures to back british buisinesses including a reformed Clean Heat Market Mechanism from 1 April 2025, with changes to give manufacturers time to scale up supply chains, making heat pumps a more attractive choice for households.
• Government support available for each and every heat pump installation that is required under the mechanism in 2025 to 2026.
• Investing over £5 million in Ideal Heating as the very-first award from the Heat Pump Investment Accelerator competition, kickstarting a homegrown heat pump industry to boost the UK’s energy security and support hundreds of low-carbon jobs.
• Aswell as measures to support thousands more households with home upgrades to get £7,500 off the cost of a heat pump, with an extra £30 million for the Boiler Upgrade Schemein the financial year, while almost doubling the budget to £295 million for the next financial year.
• Finally overseeing around £3.2 billion of investment in warmer homes across 2025 to 2026 from government, social housing providers and supplier obligations, delivering measures to help lower bills and support cleaner heating to up to 300,000 households.

Working with trade unions to ensure good jobs throughout the supply chain, backing Britain’s world class traders.

This article appears on the ECA news and blogsite as 'Treasury responds to sector submission on Warm Homes manifesto pledge ' dated 17 March, 2025.

--ECA

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