Net zero department will have to make sacrifices to fund defence, minister says

He continued: “I think we can do that without jeopardising what we’ve set out in the Warm Homes Plan. I think there’s ways that we can make sure that we work efficiently and effectively to make sure that that money goes as far as possible.”

The minister explained that “we are facing some of the most significant defence challenges that this country has faced in a generation, not just what we’re seeing... on the frontline in Ukraine against Russia, but also challenges that we’ve never faced before from the likes of China and elsewhere. And the government has a duty to make sure that they defend the population.”

He added that the Warm Homes Plan “is about increasing domestic resilience here, so that we’re no longer as reliant on petrostates, dictators, who are basically determining our energy future”.

“All government departments are going to have to make sacrifices in terms of funding defence, but I think when it comes to funding the Warm Homes Plan, it has an integral part to play in our own country’s resilience,” Mr McCluskey continued.

DESNZ published the Warm Homes Plan in January. It allocated £15bn of public funding to capital grants, such as the ongoing Warm Homes: Social Housing Fund and Warm Homes: Local Grant, heat pump grants, low-interest consumer loans, retrofit investments, devolved governments and heat networks. 

Mr McCluskey also said he hoped the government’s proposed Warm Homes Agency will be launched “either this year or next year” to improve retrofit quality and consumer protections.

“It’s really important we get this up and running, because the UK has been behind in this territory,” he said. “I know there has been some nervousness among mayoral authorities and local authorities specifically, that what we might do is replicate what you’re already doing. That is not the intention. 

“The intention is very simple: it’s to bring all the schemes that are already existing, bring the people who are working on them, who are currently spread across Salix, Ofgem and DESNZ, put them under one roof, so that we have a unified approach to schemes, and then also provide the advice and guidance that’s needed to provide a level playing field across the country.”

Inside Housing also asked Mr McCluskey for more information on the Warm Homes Plan’s proposed shift towards ‘area-based’ retrofits.

The minister said “it’s partly about learning what’s already going on”, citing area-based schemes in regional governments such as the Greater Manchester Combined Authority, “but then it’s also about expanding that, making sure [retrofit] is built into the scheme’s design”.

He added: “So we want to see the likes of DNOs [distribution network operators], social housing organisations, landlords and local authorities being able to work together, to come together in an area in order to provide upgrades to people’s homes. That’s going to be central to the scheme design.”

Mr McCluskey also addressed the need for more funding to help social landlords bring their existing heat networks up to forthcoming standards.

He said: “We’ve obviously just concluded the consultation recently on this... We are going to examine in detail exactly the feedback that’s come through that consultation.

“We can’t afford to get it wrong, in short. In terms of further funding, we’re already having conversations with the National Wealth Fund, and we also obviously have the Warm Homes Fund.

“That consultation just closed recently as well. We’ve had a lot of input from local authorities or heat network providers and others about how we might be able to look at using some of the Warm Homes Fund around that.

“I’m not rushing to any conclusions on this, because I think we need to examine closely the consultation responses, but there are conversations going on about how we might leverage funding that’s around.”