Warm Homes Plan faces deeper cuts after UK budget

LONDON — The U.K. government's flagship Warm Homes Plan could be cut by as much as £2.5 billion, as ministers look to redirect funding across Whitehall.

The government confirmed at Wednesday's budget that £1 billion would be slashed from the Warm Homes Plan in order to fund spending on defense.

Government documents showed that other funding under the Warm Homes Plan, previously pledged to “financial transactions” — or loans — to help poorer households access green tech, would be used instead to help fund a new £4.7 billion scheme to help first-time home buyers.

Two industry figures familiar with government thinking, granted anonymity to speak candidly about Whitehall plans, told POLITICO £1.5 billion was likely to be cut from that “financial transactions” pot, on top of the £1 billion capital grant cut.

The government had promised a total of £5 billion in financial transaction funding, as part of the Warm Homes Plan published earlier this year, some earmarked to fund low and zero-interest loans to help people install clean technologies in their homes. 

The first tranche of those government-backed loans were rolled out earlier this week.

The proposed cuts come after weeks of reports that ministers would raid the £15 billion Warm Homes Plan — promised as part of Labour’s manifesto in 2024 — in order to fund other spending priorities. 

Energy Secretary Miatta Fahnbulleh had suggested the promise to kit out millions of homes with climate-friendly tech would be a “success” only if the government stuck to the full £15 billion plan.

A third industry figure told POLITICO the confirmed £1 billion capital grant cut would include £700 million in cuts to the Boiler Upgrade Scheme — which subsidizes households to shift off gas boilers to energy-efficient heat pumps — on top of £200 million in cuts to retrofit schemes for low-income households after 2028 and another £100 million clawed back from an underspend on heat networks.

One of the first two figures said they expected the cuts to fall slightly differently, with the low-income retrofit schemes slashed by £180 million and heat network funding cut by up to £140 million. 

The Department for Energy Security and Net Zero did not immediately respond to a request for comment.