Representatives of the retrofit sector have announced their concern at the closing of the ECO scheme, putting both low-income households and retrofit jobs at risk
The Energy Company Obligation scheme funded retrofit upgrades for households with an income lower than £31,000, supporting healthier living for less well-off families.
However, as announced in the Autumn Budget, the scheme is planned to be cut, closing off hundreds of thousands of households from the upgrades that could improve their lives and cut their costs.
It is claimed that the cut will save on bills
Cutting the Energy Company Obligation scheme has been announced as a move to cut £150 from everyone’s energy bill, however, the industry leaders voicing their concern that the move will only save people £48.
Furthermore, the move will only be damaging to those less well off, as it removes that easy access to funds to fix draughty, mouldy, or damp homes, and it will be damaging to the supply chain of engineers and insulation manufacturers that fixed said homes under the scheme.
The remnants of the ECO scheme is to be folded into the Warm Homes Plan (WHP), which was originally due to start in April, but has since been delayed, causing further uncertainty for an already-struggling sector.
It was originally rumoured that the WHP was to be cut in this budget, with the rumour going as far as to cause several industry bodies, including the Chartered Institute of Housing (CIH) to co-sign a letter to the chancellor urging maintaining of full funding to the plan.
The WHP was originally announced in March, and has received funding to upgrade low-income households and social housing tenants with heating upgrades, insulation, solar panels, and heat pumps. The Plan was not cut in this budget.
“This fundamentally goes against Labour’s stated values”
This removal of the ECO scheme and no WHP to replace it immediately, could be equivalent to a funding drop of £5bn, and could affect 222,000 projects.
Retrofit representatives are therefore calling for the ECO scheme to be extended by another year, to cover this drop and smooth the transition to the WHP with as few families affected and as little work lost as possible.
Joel Pearson, director at Net Zero Renewables, said: “We employ and subcontract over 35 skilled individuals, and have helped take more than 200 homes out of fuel poverty through the ECO scheme. I would urge Rachel Reeves to think again and to at least extend this existing scheme by a year so we can see an orderly transition and support firms like ours helping to mitigate climate change.”
Lee Rix, managing director at Eco Approach, said: “Each year our 150+ staff and supply chain use ECO4 funding to make cold, inefficient homes safer and more affordable for thousands of families in fuel poverty. With no transition plan, ending ECO4 risks leaving those families abandoned and undermining the workforce that supports them – we urgently need clarity on a successor scheme.”
Anna Moore, CEO and founder at Domna, said: “It makes sense to streamline grants and increase oversight. The Warm Homes Plan is a welcome initiative. However, suddenly yanking £1.3bn in funding is chaotic, and has created a cliff edge for thousands of low-income households in fuel poverty as well as SMEs employing some 10,000 people. With fuel poverty growing and business under pressure, it beggars belief that a successful scheme funnelling utility firm funding to the poorest households in society should be brutally cut. And for what? To create a few short-term headlines around cutting Net Zero levies.
“This fundamentally goes against Labour’s stated values of wanting to help the poor and to fight climate change. This is not the moment to pull up the ladder. Bridging ECO to the Warm Homes Plan is essential if we are to protect residents, protect jobs and protect progress. Right now, we risk losing the installers, coordinators and surveyors – those SMEs who have built up capability over a decade, and whose expertise we critically need. Companies cannot simply be switched back on later like a light switch and the ramifications of this could massively undermine our wider battles to fight climate change and upgrade our ageing housing stock.
“We need clarity and continuity. Extending ECO by one year allows an orderly transition while the Warm Homes Plan is finalised, piloted and mobilised. Without that extension, the sector falls off a cliff in March 2026 and we will be rebuilding capacity from scratch at exactly the moment the government needs to accelerate delivery.”
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