Ian Preston, director of external affairs at the Centre for Sustainable Energy, argues the retrofit system is broken and offers lessons for the Local Authority Retrofit Scheme.

The Home Upgrade Grant Scheme (HUGs) was launched with noble intentions: to improve energy efficiency in fuel-poor homes and tackle the pressing issues of climate change and the suffering caused by living in a cold home. However, as the Centre for Sustainable Energy (CSE) has found through extensive work with local authorities, the scheme is falling woefully short of its potential.

Despite the availability of funding, bureaucratic hurdles and inflexible guidelines mean that vulnerable households across the country continue to endure cold, energy-leaking homes. The new Labour Government's £6.6bn Warm Homes plan, which promises to double planned investment in insulation and energy improvements, offers hope. But there are crucial lessons to be learned from the implementation of HUGs to ensure this investment truly benefits those in need.

CSE has been at the forefront of HUGs delivery, accounting for a remarkable 25% of all installations nationwide in the first year of the scheme. This success, however, throws into sharp relief the scheme's overall underperformance. As Claire Wilson, retrofit project manager at CSE, bluntly states: ‘The whole funding system is completely broken. It's failing across the country.’

The impact of successful retrofit work can be life-changing for individual households. In Somerset, CSE has installed 244 measures in 75 homes, including insulation, air source heat pumps, and draught-proofing, totalling £1.1m in improvements. But these successes are overshadowed by systemic issues plaguing the scheme.

Bureaucratic bottlenecks

The current approval process involves multiple organisations, creating unnecessary delays and complications. A recent batch of ten properties, with retrofit measures costed at £130,000, languished in the system for five months before being rejected. Six months later, we're still awaiting sign-off on the revised submission. This leaves people in vulnerable circumstances stuck in miserable living conditions for extended periods.

Inflexible guidelines

The HUGs' rigid focus on improving Energy Performance Certificate (EPC) ratings by two bands often overrules professional retrofit assessments. This approach fails to address the specific needs of individual properties and their occupants. As Claire Wilson at CSE notes, ‘After the professional retrofit assessment tells you the property needs something, how can you dictate something else? It baffles me!’

Missed opportunities

The scheme's current structure misses crucial opportunities to future proof homes and tackle both fuel poverty and carbon emissions simultaneously. For instance, homes receiving solar panels should also get solar diverters as standard, alongside batteries and smart meters, to enable flexible electricity use and reduce reliance on fossil fuels.

With the transition to the Local Authority Retrofit Scheme (LARS), there's an opportunity to address these critical issues. CSE recommends the following reforms:

1. Streamline the approval process: Reduce the number of organisations involved in decision-making and implement a more proportionate approach to batching measures.

2. Allow flexible, needs-based retrofit: Focus on residents' situations and individual property needs evidenced through a retrofit assessment, rather than rigidly adhering to EPC improvements.

3. Prioritise both carbon reduction fuel poverty alleviation: Ensure publicly funded schemes tackle both issues simultaneously.

4. Future-proof installations: Incorporate measures that enable households to access cheaper smart energy tariffs and participate in the flexible energy system of the future.

5. Implement performance monitoring: Introduce measurable outcomes and appropriate monitoring to identify and rectify poor performance.

6. Provide comprehensive post-installation support: Offer high-quality advice and guidance to help residents maximise the benefits of new technologies.

7. Ensure long-term, consistent funding: Establish a ten-year national retrofit programme to build sector confidence and encourage supply chain growth.

The Labour Government's commitment to doubling investment in home energy improvements is encouraging. However, the success of this initiative hinges on learning from HUGs' shortcomings. With these improvements, LARS can avoid the pitfalls of its predecessor and deliver meaningful change to vulnerable households across the UK.

As government prepares to deliver its Warm Homes Plan, these reforms are crucial. The potential impact is immense – not just in terms of carbon reduction and reduced delays but in transforming the lives of those struggling in freezing, energy leaking homes and with unaffordable energy bills.

CSE's experience demonstrates that effective retrofit work can be achieved, but only with the right framework in place. As we face the dual challenges of climate change and rising energy costs, we cannot afford to let bureaucracy and inflexibility stand in the way. It's time to fix our broken retrofit system and ensure that public funds truly serve those most in need.

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