UK (Parliament Politics Magazine) – Experts warn the insulation scheme cuts may leave low-income homes colder this winter and trigger 10,000 job losses across the retrofit sector.
As reported by the Guardian, experts say cuts to the insulation and heat pump programme could leave vulnerable households facing cold, damp and unsafe conditions this winter.
Housing groups are calling for a one-year extension to the scheme to keep projects stable and stop small retrofit businesses from shutting down. Firms warn that funding for solar panels and insulation is already being pulled, leaving homes colder as winter arrives.
What did experts say about the cuts hitting home retrofit plans?
Chancellor Rachel Reeves has pledged to cut average energy bills by £150 a year, a move partly funded by ending the £1.3bn ECO scheme that supported upgrades for households earning below £31,000.
The scheme is set to end in March. The government plans to roll out a “warm homes plan” for heat pumps and other home upgrades, though the initiative has faced repeated delays.
According to experts, the cuts could disrupt around 222,000 planned retrofit projects, which could have lowered energy bills for low-income households. About 23,000 homes were affected by issues with their external wall insulation.
Despite issues with faulty external wall insulation, the programme has improved more than 15 million homes since 2013, helping households save £110bn on energy bills.
Industry experts said that uncertainty and gaps between schemes could lead to job losses and force companies to shut down.
According to the climate change thinktank E3G, the funding cut could cost 10,000 skilled jobs, including apprenticeships, similar to the workforce at Jaguar Land Rover’s Solihull facility.
Anna Moore, former head of UK construction at McKinsey and now running Domna, a retrofit company supporting housing associations and councils, has urged Energy Secretary Ed Miliband to secure funding for low-income families and extend the warm homes plan by a year.
She said,
“Suddenly yanking £1.3bn in funding is chaotic, and has created a cliff edge for thousands of low-income households in fuel poverty as well as small and medium enterprises employing some 10,000 people.”
Ms Moore added,
“With fuel poverty growing and business under pressure, it beggars belief that a successful scheme funnelling utility firm funding to the poorest households in society should be brutally cut. And for what? To create a few short-term headlines around cutting net zero levies.”
She said,
“This fundamentally goes against Labour’s stated values of wanting to help the poor and to fight climate change. This is not the moment to pull up the ladder. Bridging ECO to the warm homes plan is essential if we are to protect residents, protect jobs and protect progress.”
Ms Moore continued,
“Funders are pulling back on anything new that hasn’t already been allocated (we had several calls to that effect from installers today, saying their funding has been cut – literally pressing pause on about 1,500 homes receiving insulation or solar pre-Christmas). The immediate impact is slamming the breaks on programmes, right in the middle of a cold snap.”
Small businesses have urged the government to extend the scheme and provide clear guidance to protect operations.
Joel Pearson, director at Net Zero Renewables, a -based solar panel installer, said,
“We employ and subcontract over 35 skilled individuals, and have helped take more than 200 homes out of fuel poverty through the ECO scheme.”
He added,
“I would urge Rachel Reeves to think again and to at least extend this existing scheme by a year so we can see an orderly transition and support firms like ours helping to mitigate climate change.”
Lee Rix, the managing director at Eco Approach, a Preston-based installer, said,
“Each year our 150-plus staff and supply chain use ECO4 funding to make cold, inefficient homes safer and more affordable for thousands of families in fuel poverty. With no transition plan, ending ECO4 risks leaving those families abandoned and undermining the workforce that supports them – we urgently need clarity on a successor scheme.”
Experts warn that ending the scheme without a replacement warm homes plan may prolong fuel poverty, despite the cost-saving benefits of insulation and solar panels.
How does the Government plan to spend £15bn to tackle fuel poverty?
A spokesperson for the Department for Energy Security and Net Zero said,
“The ECO and great British insulation schemes were not delivering value for money. We are instead investing an additional £1.5bn into our warm homes plan, taking it to nearly £15bn – the biggest ever public investment to upgrade homes and tackle fuel poverty.”
How did Rachel Reeves defend the £26bn Budget tax hikes?
Chancellor Rachel Reeves insisted her £26bn tax measures are “fair and necessary,” saying that higher earners should contribute more to the economy.
She faced accusations of misleading the public about the country’s finances to support her tax hikes, insisting on “hard choices” even though there was a £4.2bn surplus.
The chancellor stood by her decision to introduce 43 separate taxes and freeze income tax thresholds, which will push millions into higher taxes, refusing to make cuts.
She said,
“I wasn’t willing to cut public services, because people voted for change at the election.”
The chancellor maintained that the financial burden of restoring Britain’s struggling public services should fall on the wealthy and denied claims that working-age citizens are paying more than pensioners.
Ms Reeves said,
“It’s quite clear that the economic burden in the budget was not about age. It was about wealth. People who bear more of the burden are those with big incomes and assets… so I don’t accept that. We’ll never get out of this problem of weak growth unless we’ve got investment in the economy, and we’re investing in things to boost our productivity.”
She added,
“People often talk about what chancellors do in their budget, but sometimes what’s more important are the things you don’t do. One of the things I didn’t do was cut the investment that I put into capital spending, new schools and hospitals, new energy infrastructure, rail infrastructure.”
The chancellor continued,
“It would have been the easiest thing to do to say the OBR’s done this downgrade, you need to cut our cloth accordingly.”
What is the insulation scheme?
The UK’s main insulation scheme is the Great British Insulation Scheme (GBIS), a government initiative designed to help households reduce energy bills by improving home insulation.
The scheme aims to help around 300,000 households in England, Scotland, and Wales install insulation. It will end in March 2026, having started in April 2023.
Government statistics from May 2025 show that over 76,000 insulation measures had been installed in over 60,000 households
Two main groups are eligible for this, including:
• Low-income group:
Households with a total income under £31,000 or receiving certain benefits (e.g., Universal Credit, Pension Credit).
• General group:
Homes with an Energy Performance Certificate (EPC) rating of D-G and in lower Council Tax bands (A-D in England, A-E in Scotland and Wales).