Thousands of Britons will miss out on the chance to lower their bills this winter as councils across the country close their waiting lists for solar, insulation and heat pump grants due to overwhelming demand.

Local authorities across the country have seen overwhelming demand for vouchers under the Warm Homes Plan, the Government’s central policy for reducing fuel poverty and moving homes off fossil fuels.

Government underfunding is preventing many residents from accessing support, councils say, having received less than a third of the funding requested.

But policy experts are not hopeful that ministers will boost funding for the scheme, as the Department for Energy Security and Net Zero faces budget cuts to help fund the Government’s £15bn Defence Investment Plan.

Funding far below ‘significant’ demand

Labour has promised to upgrade five million homes with solar, heat pumps and insulation by 2030 through a mix of no-interest loans and grants for low-income households.

Grants are being delivered by local authorities who bid to the Government for funding based on how many homes they think they can upgrade.

At the end of 2024, councils bid for a collective £1.7bn worth of funding but have so far been granted just £500m up until 2028.

As a result, many councils are oversubscribed and have long waiting lists, with some closing for applications entirely for the time being.

Liverpool, Leeds, Northumberland and Tunbridge Wells are among the councils no longer accepting applications due to the scheme being oversubscribed.

Councillor Douglas Johnson, chair of the Housing Policy Committee at Sheffield City Council, said more than 26,000 homes in the city are in fuel poverty and the funding they have will upgrade around 1,000 homes by 2028.

“Demand for our Warm Homes scheme is already high enough that we need to ration by strict need criteria…If the Chancellor commits the rest of the Warm Homes funding at the Budget, we can start delivering more comfortable homes this winter rather than telling families they need to wait,” he said.

Lewisham Council said it had identified 4,500 homes that are eligible for the funding but that it only has enough to “bring 800 of those homes up to a decent standard by 2028”.

A spokesperson added: “The queue behind those 800 homes is long. What we need from the Budget is certainty that the rest of the Warm Homes money will flow to local communities, and the flexibility to deliver a truly multi-year programme so the teams and supply chains we have built can keep working to provide comfortable homes year-round.”

Councillor Rosy Moore, deputy leader of Cambridge Council, which is part of a partnership across Cambridgeshire and Peterborough, said the authorities have already allocated their entire £3.5m Budget for this financial year.

She said “demand has been significant” and urged the Government to provide them with more funding to “help more households with warmer, healthier and more energy-efficient homes”.

No ‘war plan’ for Warm Homes

Published in January this year, the Government’s Warm Homes Plan promised to issue a total of £4.4bn in grants for upgrades to qualifying households over the course of this parliament, but only £500m has been made available to date.

James Dyson, Senior Researcher at climate think-tank E3G, urged ministers to “ take the bull by the horns by allocating the funding it promised”, particularly given “the looming threat of further increases in energy bills”.

Sir Keir Starmer’s Government was considering such a move, according to documents leaked to Sky News setting out a policy agenda drafted by Number 10 in April to keep the former Prime Minister in power.

The documents laid out plans to announce a “dash to get off gas” via the Warm Homes Plan in July, which would involve “a war effort on home insulation and electrification”.

Burnham is yet to make any announcements on the Warm Homes Plan since becoming Prime Minister and councils fear the programme will not be in line for a boost at the upcoming Budget due to the prioritisation of other areas of spending, such as defence.

In June, the Government committed to a £15bn Defence Investment Plan, which will be partly funded by a £2bn cut to the Budget for the Department for Energy Security and Net Zero (Desnz).

Energy bill increases 

The surging demand for solar, heat pumps and insulation comes against the backdrop of rising energy bills caused by the war in the Middle East.

Analysts have predicted the average energy bill could increase by 25 per cent in January to £2,152 per year, while the Bank of England warned on Thursday that rising energy costs could push inflation above 4 per cent early next year.

The Government has said a three-bedroom house that receives a full retrofit under the Warm Homes Plan could save up to £550 per year on energy bills.

A spokesperson for the Local Government Association (LGA) said councils are “pleased to see the significant investment” in the Warm Homes plan but added that local authorities “need more powers and long-term, devolved funding so we can get on with improving homes and protecting tenants”.

Meanwhile, a Desnz spokesperson said: “Households around the country are already benefiting from the Warm Homes Local Grant, which is helping families cut their bills.

“Our priority is bringing bills down for good, and our Warm Homes Plan will roll out more upgrades to millions of homes.”