Nesta, the research and innovation foundation, published a blog and press release on 1 and 2 October 2026 warning that devolving the Boiler Upgrade Scheme (BUS) to local authorities would be a mistake. The intervention follows Energy Secretary Miatta Fahnbulleh's announcement at Labour Party Conference on Monday 28 September that she would devolve the Warm Homes Plan, described by Nesta as the UK government's £15 billion funding pot for upgrading homes1.
Nesta's blog, by Andrew Sissons, a director in its sustainable future mission, argues that putting mayors and strategic authorities in charge of upgrading home energy and heating "makes a lot of sense", because home heating is a localised issue and local authorities understand local housing stocks, fuel poverty levels and supply chains2. But it says the government should avoid devolving the BUS, which provides direct subsidies to households that get a heat pump and is available to any household that replaces a boiler with a heat pump, covering several different types of heat pump2.
"Devolving heat pump subsidies to local government would effectively mean ending the BUS and replacing it with multiple new schemes at local level."
Sissons sets out three problems with a devolved model. First, allocating the right amount of funding to each area would be difficult, because heat pump uptake is uneven and unpredictable, leading some areas to underspend and others to run out of budget2. Second, it would create uncertainty for the heating industry, since a significant majority of retrofit heat pump installations depend on the BUS, especially now that the Energy Company Obligation scheme (ECO) is gone2. Third, different local schemes would likely have different requirements, adding friction to the customer journey2. Nesta points to Scotland's Home Energy Scotland Grant and Loan scheme, which it describes as having a much more friction-heavy process for the household compared to the BUS in England and Wales, and a lower rate of take-up on a population-adjusted basis despite being more generous and serving a higher proportion of off-gas grid homes2. It notes that Octopus Energy, one of the largest installers in England and Wales, does not offer heat pumps in Scotland2.
Nesta says the BUS funding is due to rise to £700 million by 2029/30, and that wherever a local authority runs a scheme to upgrade multiple homes with heat pumps, including networked ground source and air-to-air, it can access the BUS2. It suggests the scheme could be changed so local authorities can aggregate BUS applications for place-based schemes, rather than individual homeowners or installers applying separately2. It also says the government-announced Warm Homes Agency should exist mainly to help local areas, offering tools, guidance and specialist expertise, and that the BUS should be seen as a core part of that national support2.
Why it matters for households
The BUS is the main national grant for replacing a fossil fuel heating system with a heat pump, and Nesta's warning concerns whether that route stays uniform across England and Wales or is replaced by separate local schemes with their own rules and budgets2. For a household, the practical difference lies in how simple the application is, what the subsidy is worth and whether funding is available in their area at the time they want to install2. Nesta argues that a national, demand-led scheme directs money wherever it is needed, while a devolved model risks gaps in funding and differing requirements between areas2. It also states that abolishing the BUS could wipe out the heat pump industry in England and Wales, which it says would jeopardise the UK's climate goals and leave more households burning imported gas2. No decision to devolve the BUS has been reported.
What happens next
The Energy Secretary's announcement covered devolving the Warm Homes Plan, not the BUS1. Nesta's blog sets out how the BUS could be made to work better for local authorities, including aggregated applications for place-based schemes2. No timetable for further decisions on the BUS has been reported.
Sources4 cited
- Nesta warns against devolving key heat pump scheme on back of Energy Secretary announcement | Nesta, nesta.org.uk
- Devolving the Warm Homes Plan to local government makes sense - but the Boiler Upgrade Scheme should stay | Nesta, nesta.org.uk
- Nesta warns against devolving key heat pump scheme | Heating & Plumbing Monthly Magazine (HPM), hpmmag.com
- Nesta warns against devolving key heat pump scheme on back of Energy Secretary announcement - Heat Pumps & Renewables, renewableenergyinstaller.co.uk