The Welsh Government published the Warm Homes Programme policy statement on 15 June 2023, together with a lessons learned report and its response to the consultation held in 20221. The Minister for Climate Change, Julie James MS, set out the plans in a written statement on 14 June 20233. The new scheme will focus on the owner occupied, private rented and housing co-operative sectors, and the current Nest contract has been extended to guard against delays3.
"The new scheme will tackle both the climate emergency and fuel poverty."
The statement says the programme has invested more than £420m in home energy efficiency over the last 12 years, benefiting more than 73,000 lower income households, and that more than 176,500 people have received energy efficiency advice since its launch in 20113. The policy statement sets a long-term ambition to improve the energy efficiency of Welsh homes, and notes that in 2020 Welsh homes accounted for approximately 11% of all greenhouse gas emissions in Wales1. It defines fuel poverty in Wales as needing to pay more than 10% of full household income to maintain a satisfactory heating regime, with more than 20% considered severe fuel poverty, and aims for no more than 5% of Welsh households in fuel poverty by 20351.
Eligibility for support with energy efficiency measures will change. The current test based on means tested benefits will be replaced by a low income threshold, and the new programme will cover dwellings with an EPC rating of E and below1. Individuals with a recognised health condition living in a household with an EPC of D will also be eligible, while a lower income household with an EPC of D and no health condition will be placed on a reserve list1. Homes without a current EPC will not be prevented from applying1.
| Element | Current programme | New programme |
|---|---|---|
| Eligibility test | Means tested benefits | Low income threshold1 |
| Property rating | EPC E or worse | EPC E and below; EPC D with a health condition also eligible1 |
| Applications | One per household | Multiple applications intended, subject to updated Regulations1 |
| Target standard | Not stated | Minimum one EPC band uplift or band E, whichever is higher1 |
The policy statement says a fabric first approach will continue, with heating and ventilation measures available only once thermal efficiency has been improved to a satisfactory standard, and low carbon technologies prioritised where it makes sense1. Long-term investment in fossil fuel heating systems will be permitted only exceptionally1. The lessons learned report records that, at the time of Audit Wales's review, 95% of main heating systems installed by Nest and 98% by Arbed were fossil fuel based, and that between April 2018 and April 2021 Nest installed measures in 18,047 homes, the majority receiving a new central heating system, primarily gas boilers2. It also notes that around £7.5 million of EU grant funding had not been used, with substantial delays even before the pandemic2.
Why it matters for households
For a household in Wales, the practical effect is a change in how support is assessed. Eligibility will turn on income rather than which benefits are received, which the policy statement says is intended to better target the poorest in society1. Homes rated EPC E or below remain the core focus, and a health condition can bring an EPC D home into scope1. Advice remains open to all households in Wales, whatever their tenure or income, including on how measures can be funded1. The statement also confirms that private homes registered for business purposes are eligible, subject to the criteria, and that this will be made explicit1. For a home's energy independence, the direction is towards fabric improvements first, with low carbon heating following, and a whole house assessment captured in a passport setting out what work is needed and in what order1. The lessons learned report recommends removing the single application cap and designing a more intelligent means of limiting costs than the current grant cap2.
What happens next
The Minister said a tender specification for the procurement of a new, demand led scheme will be published shortly3. The current Nest contract has been extended to ensure there is no gap in provision between the new and existing programmes3. The Welsh Government intends to update the Regulations to allow multiple applications per household1. No date has been given for the launch of the new scheme.