Housing associations can underpin the next government’s warm homes ambitions

Ahead of July’s general election we’re calling on all political parties to embrace a quick win and commit to a renewed and bolstered Social Housing Decarbonisation Fund.

The climate emergency is well and truly here, and this election will lead us into the first of just five parliamentary terms until 2050 when we must have met our legally binding net zero target. Early next year, the new parliament will face the Climate Change Committee’s 7th Carbon Budget, a landmark report on our progress as a country to cut carbon emissions. The analysis is likely to confirm that we’re some way off where we should be.

The importance of addressing this isn’t just about the climate. As the main political parties have recognised, it is also about delivering permanently lower bills, warmer homes and greater energy security in our volatile world. For housing associations, net zero isn’t just an exercise in asset management, it is an opportunity to help reduce fuel poverty among their residents.

Housing associations can continue to be the bedrock of this national mission. I know this because the current Social Housing Decarbonisation Fund (SHDF) is a proven success story among the current government’s housing retrofit programmes, as Kate Henderson explains in her recent comment piece for Inside Housing.

In addition to their record investment in improving the condition of existing homes, housing associations have more than matched the £1bn in SHDF grant funding since 2020. The fact that housing associations continue to commit funding to decarbonisation despite serious financial pressure shows just how seriously the sector takes its role in the transition to net zero. The ongoing success of the SHDF scheme meant that just before the general election was called the government set out plans to deliver a further £1.2bn in grant funding through Wave 3 of the SHDF between 2025-28.

That funding will again be more than matched by housing associations and will deliver not only for social housing residents, but, through the proposed strategic partnerships, it will supercharge supply chains and innovation in everything from retrofit technology to financing - essential for the rest of society to meet the challenge of net zero.

However, the sector’s long list of competing investment priorities limits the amount housing associations can continue to do alone so we are calling on all parties to commit to delivering Wave 3 of the SHDF and if possible, increase the funding available. Our sector is prepared to be more ambitious and in the longer-term that will require a new funding settlement for the sector. But Wave 3 of the SHDF (or an equivalent funding programme) offers the chance of a quick win as well.

The design of Wave 3 could also be further improved. Currently, it is proposed to be delivered over three years in a 40/40/20 split. This tapering off creates uncertainty for housing associations and their suppliers and leaves already struggling supply chains without the confidence they need to scale up decarbonisation of residents’ homes. We would like to see this issue addressed as well.

Housing associations are uniquely placed to offer the ambition, scale, collaboration and long-term certainty to deliver retrofit funding and support the next government to get the nation on track to meet the net zero target. Now is not the time to pause vital funding for our sector.