In order to reach net zero, the UK needs to substantially reduce the emissions coming from buildings. One way to do this is to improve the efficiency of energy use in buildings (for example by installing insulation).
Across the fourteen years (2010-2024) during which the Conservatives were in government, progress was mixed on building energy efficiency policy. Historically, UK government schemes had helped to install insulation at high rates before they dropped off dramatically from 2013 onwards, following a policy reorientation, and never recovered. There were also some unsuccessful schemes during this period such as the Green Deal and Green Homes Grant. However, the percentage of English homes with an energy efficiency rating of band C or higher increased from 12% in 2010 to 56% in 2024.
Given the Labour Party has been in government for over two years (approaching the midway point of a potential five-year Parliament), now is a good moment to evaluate whether a change in the governing party has led to a significant policy pivot on building energy efficiency. Particularly as the government made cuts in this area in the recent budget.
This blog focuses on policy relating to the energy efficiency of homes (not non-residential buildings like offices) and on policies launched by the UK government only (much of this policy area is devolved) since the 2024 general election.
It was announced in Autumn 2025 that the Energy Company Obligation (ECO), which funded energy efficiency measures in homes through a levy on energy bills, would be discontinued, and the Great British Insulation Scheme also ended as planned in March 2026. This allowed the government to take the levies which funded ECO off energy bills, saving households around £60 per year. This was a significant move as the ECO scheme had been the UK’s principal energy efficiency scheme for several years and the UK has had supplier obligation schemes in place since the 1990s.
The main focus of government action in this area has been the Warm Homes Plan, which was published in January 2026 and detailed a range of policies to cut building emissions.
The plan outlined various publicly funded initiatives supporting households to install measures such as insulation, roof-top solar and low carbon heating technology. These included several pre-existing funding schemes, some of which were tweaked or expanded, and some new schemes, such as the Warm Homes Fund.
The Warm Homes Plan outlined new minimum energy efficiency standards for private rented properties from 2030 and similar plans for the social rented sector. The plan trailed the government’s intention to tighten up the standards expected of new buildings (so they use less energy and emit less carbon), which were then announced in Spring 2026. It also detailed institutional reform via a new Warm Homes Agency which will support the delivery of the plan.
More recently, it has been suggested that much of the Warm Homes Plan will be devolved as part of efforts to push power out of Whitehall.
The most obvious shift in approach is that the new government has moved away from schemes delivered by (private) energy suppliers, funded by bill levies, to focus on schemes delivered by public bodies and funded through general taxation.
The 2019 Conservative manifesto committed to invest “£9.2 billion in the energy efficiency of homes, schools and hospitals”, with £6.6bn of this spending planned for 2020-2025 (and the rest after that). The Conservative government allocated this £6.6bn to publicly funded schemes supporting energy efficiency and heat decarbonisation (not exclusively building fabric improvements) before leaving office in 2024 (on top of the energy efficiency improvements funded via bill levies through ECO). Although the delivery rates and actual money spent lagged behind the funding announcements in this Parliament.
The 2024 Labour manifesto promised an “extra £6.6 billion over the next parliament” to improve “energy efficiency in British homes”. The Warm Homes Plan amounted to £15 billion of public investment to upgrade homes (including but by no means exclusively through improving building fabric) over the financial years 2025-26 to 2029-30. Though much of this was not new funding (and came alongside ECO ending), it still represented an increase in public funding to support reductions in energy use and carbon emissions coming from buildings.
The picture changed somewhat in the recent budget where the government cut £1 billion from the Warm Homes Plan to increase defence spending. There are reports of further cuts in this area, potentially an additional £1.5 billion (which would reduce the funding behind the Warm Homes Plan from £15 billion to £12.5 billion).
The initiatives in the Warm Homes Plan include a big focus on fuel poverty and low-income households, the use of regulations to drive up housing standards, a substantial role for local authorities as delivery agents, and potentially coordinated upgrades to entire streets of social housing.
A lot of this is not actually particularly novel, representing a continuation in approach from some Conservative government initiatives which had a fuel poverty focus, had introduced some (less stringent) minimum energy efficiency standards in the private rented sector and given significant roles to local authorities. However, these relatively interventionist approaches to policymaking were always less natural for Conservative politicians, and the Labour government have taken them on much more wholeheartedly.
While the plan does support the deployment of insulation measures, this is only one part of a broader focus on supporting more efficient and cleaner use of energy in homes (e.g. battery storage and roof-top solar), and deploying low carbon (and generally more efficient) heating technology (e.g. heat pumps). It therefore does not take a ‘fabric first’ approach to building emissions.
The Conservative government did publish a Heat and Buildings Strategy in 2021 (though much of the progress touted in this document did not materialise). Nonetheless, as a relatively coordinated plan for reducing building emissions, the Warm Homes Plan is a useful step in itself.
There are several obstacles which may imperil the vision of mass retrofitting of Britain’s homes. Firstly, even before the cutbacks announced in the budget, the scale of the challenge means that it was not clear that the Warm Homes Plan was sufficient to reduce emissions from buildings at the rate required to meet net zero by 2050.
Secondly, this policy area is littered with past examples of good intentions which have not been matched by delivery on the ground. The government and the new Warm Homes Agency will have to work hard to see their plans realised in practice.
Thirdly, the level of ambition (in terms of funding) announced in the January 2026 Warm Homes Plan lasted less than a year before it was cut back in the recent budget. Next year’s spending review is also expected to impose spending restraint on departments which could further constrain future funding for energy efficiency and building decarbonisation initiatives.
Finally, the budget announcements were an example of exactly the type of chopping and changing which has bedevilled this area of policy for years. Substantially reducing emissions from buildings will require a consistent suite of policies which remain in place over the long term, something governments in the UK have repeatedly struggled to achieve.