The Welsh Government is injecting a further £17 million into housing retrofit schemes, using existing budget within the portfolio of Siân Gwenllian MS, Cabinet Minister for Local Government, Housing and Planning. The minister set out the allocation in a written statement published on 16 July 2026, alongside a report on her review of the existing Warm Homes Programme1.
The £17 million is split three ways. £5 million goes to the Nest scheme, taking total funding for the demand-led scheme to £37 million this financial year. A further £8 million goes to the Optimised Retrofit Programme, bringing its total budget to £106.75 million this financial year. The remaining £4 million is for alternative and novel delivery models, working with local partners across Wales, with details of those schemes to be set out in due course1.
"I am using existing budget within my portfolio to inject a further £17 million of funding into housing retrofit schemes."
The minister described Nest as a lifeline for many low-income households living in cold, damp homes, and said the scheme has been proven to deliver quality installations and outstanding benefits to households. She said this is the last year of the Optimised Retrofit Programme, and that insights from it will inform future policy and interventions1.
| Allocation | Amount | Resulting total this financial year |
|---|---|---|
| Nest scheme | £5 million | £37 million |
| Optimised Retrofit Programme | £8 million | £106.75 million |
| Alternative and novel delivery models | £4 million | Not stated |
The £4 million for new delivery models will complement Tai Clyd Caerdydd, a pilot area-based project in the Splott, Adamsdown and Fairwater areas of Cardiff, delivered in partnership with Cardiff Council. The previous government committed £3 million to the project, which will explore a neighbourhood level approach to cross-tenure retrofit. The minister confirmed it will open for applications in September, when eligible residents will be contacted with further details1.
Community Housing Cymru reported the announcement on 24 July 2026, dating it to Monday 20 July and describing it as a £17 million investment in home energy upgrades aimed at cutting household energy bills and tackling fuel poverty across Wales. Its account lists £8 million for the Optimised Retrofit Programme to retrofit social homes with energy efficiency measures and £4 million for new area-based activities2. The Welsh Government statement itself is dated 16 July1.
Elly Lock, Community Housing Cymru's Head of Policy and Research, said the funding was welcome news and that rising bills are hitting housing association tenants hard. The body is asking the Government to review and rephrase wider WHQS 2023 requirements so that social landlords can focus investment where it provides the greatest benefit for tenants, prioritising year-round healthy indoor temperatures through energy-efficient measures with low running costs2.
Why it matters for households
The money is directed at retrofit: physical work to existing homes rather than new build. For households in social housing, the Optimised Retrofit Programme funding is the route by which energy efficiency measures reach their homes, and the Welsh Housing Quality Standard sets the wider requirements landlords work to The Welsh Housing Quality Standard and Home Energy. For low-income households in cold, damp homes, the additional Nest funding increases the budget of a demand-led scheme, meaning households apply rather than being selected Home Energy Grants in Wales.
The £4 million for alternative delivery models and the Cardiff pilot test a neighbourhood level approach to cross-tenure retrofit, which would cover homes of different ownership types in the same area rather than one tenure at a time. The minister said the review report identified further work over the coming months to inform the next emissions reduction plan, starting with a review of evidence on cost-effectiveness and where Welsh Government funding and wider policies should be targeted, alongside looking for opportunities to maximise the benefit to Wales of UK Government funding streams1.
What happens next
Tai Clyd Caerdydd opens for applications in September 2026, with eligible residents contacted with further details1. Details of the schemes funded by the £4 million for alternative and novel delivery models will be set out in due course1. The review of evidence on cost-effectiveness, feeding into the next emissions reduction plan, starts immediately1.