Net zero: what do the Party Manifestos mean for social housing decarbonisation?

Rory Hughes, 18 June 2024

Now we have all the election manifestos, we have our first preview into what the next five years could look like under a new government regarding social housing decarbonisation.

There is no doubt this is a critical time for our sector, social housing residents and the climate. By 2030, on the advice of the statutory Climate Change Committee (CCC) and our legally binding fuel poverty targets, practically every rented home in the country needs to be energy efficient (currently measured as EPC C).

We also need to expand the rollout of clean heat technologies. Back in 2020, the government set a target for installing 600,000 heat pumps a year by 2028 - we are currently hovering around 40,000.

As we emerge from an energy crisis, it’s clear that we need an energy system that works for both social housing residents and the climate. This means lowering energy bills, incentivising the rollout of clean heat, and introducing new regulation and funding for heat networks.

So, how did the manifestos stand up against these challenges?

Labour Party manifesto

Decarbonisation featured particularly prominently in the Labour manifesto, indeed, ‘clean power by 2030’ is one of Labour’s five ‘national missions’. A critical part of achieving this will be reducing energy demand through a ‘Warm Homes Plan’. At the centre of this plan is a commitment to double current funding (to £13.2bn up to 2030) for retrofitting homes and rolling out clean heat.

Labour wants to use this funding to help upgrade five million homes, save families ‘hundreds of pounds’, slash fuel poverty, and ‘get Britain back on track’ to meet our climate targets.

The manifesto doesn’t go into detail about how this funding would be broken down, saying only that Labour would offer a mixture of grants and low interest loans to support investment in insulation and other improvements such as solar panels, batteries and low carbon heating to cut bills.

At the start of the election campaign, we called for increased and longer-term retrofit funding so I'm also pleased to see this commitment from Labour in the form of the Warm Homes Plan. This additional funding would also help meet another of Labour’s welcome related manifesto commitments to ‘support councils and housing associations to build their capacity to ensure more social homes can be built’.

In addition, there is also a commitment for Labour to ‘work with the private sector, including banks and building societies, to provide further private finance to accelerate home upgrades and low carbon heating’.

Labour has committed also to partner with combined authorities, local and devolved governments, to roll out this plan, hinting at devolution of retrofit funding. This is already the case for Greater Manchester Combined Authority and West Midlands Combined Authority under their ‘Trailblazer deals’.

And finally, on broader energy bill policy the Labour manifesto commits to ensure a tougher system of regulation that ‘puts consumers first and attracts the investment needed to cut bills’, with reform of standing charges, pre-payment meters and better compensation too.

Conservative Party manifesto

The Conservative manifesto continues on the path set out by the Prime Minister in his ‘net zero reset’ in Autumn 2023. The manifesto reannounced their December 2023 commitment to invest £6bn in energy efficiency over the next three years to make around a million homes warmer. This included the £1.2bn of the Social Housing Decarbonisation Fund Wave 3 announced just before the election. As mentioned above, we had called for all parties to commit to the Social Housing Decarbonisation Fund so this is very welcome. It also promises funds for an energy efficiency voucher scheme, open to every household in England, but no costings or timelines are given for this.

On energy bill policy, there are some positive commitments to lowering energy bills through reforming standing charges and smart tariffs. It also promises to ensure household energy bills are lower each year of the next Parliament than they were in 2023. The NHF has raised before that energy bill levies can hit the poorest hardest and, as levies are mostly put on electricity bills they also disincentivise heat pumps. They do however fund valuable retrofit schemes such as the Energy Company Obligation (ECO) and it isn’t clear whether the Conservatives are aiming to alter the funding mechanism of these schemes or scrap them altogether.

Liberal Democrats manifesto

The Liberal Democrat manifesto made some strong commitments on housing decarbonisation generally, although with little reference to social housing specifically as part of this. It promises:

  • An emergency Home Energy Upgrade programme, with free insulation and heat pumps for low-income households.
  • Incentives for installing heat pumps.
  • A new subsidised Energy-Saving Homes scheme, with pilots to find the most effective combination of tax incentives, loans and grants, together with advice and support.

It also pledges to reintroduce the requirements for landlords to upgrade the energy efficiency of their properties to EPC C that were proposed for the private rented sector but scrapped in 2023.

On reforming energy bills, the Liberal Democrats set out some welcome proposals. These measures would go a long way to address fuel poverty and incentivising switching to clean heat:

  • A cheaper ‘social’ energy tariff.
  • Energy bill support (funded by windfall taxes).
  • Decoupling electricity prices from the wholesale gas price.
  • Eliminating regional differences in energy bills.

It is clear all major parties remain committed to the rollout of home decarbonisation. The Conservatives remain committed to the next wave of the Social Housing Decarbonisation Fund, the Liberal Democrats have set out some positive ideas on energy bill reform and Labour’s spending plans on home and energy decarbonisation are substantial.

The whole social housing sector is more than prepared to work in partnership with the next government to deliver on these commitments.