Ahead of the spring budget, a climate and energy think-tank has published new analysis which reveals that the government has not spent a third (£2.1bn) of the funding pledged to make buildings energy efficient and decarbonise heat. The 2019 manifesto pledged a total of £9.2bn by 2030, of which £6.6bn was due between 2020-25.

E3G found that more investment in leaky buildings will be needed to get on track for the UK’s carbon budgets, to a sum of £8.67bn.

The analysis warns of regional differences in the availability of support, skills and subsidies. Schemes like the Home Upgrade Grant (HUG) offer support for rural fuel-poor households, but are not nationally available due to the competitive nature of funding pots.

Since local authorities, who are already engaged and competent, are most likely to successfully apply for these schemes, households living in areas already struggling to get on top of the retrofit challenge are left further behind, with nationally available schemes unable to plug these gaps.

E3G has called on the Treasury to replace competitive funding mechanisms with fair distribution of public investment in energy efficiency and clean heat to “level up” access across the whole country.

They also add that there are challenges which stand in the way of delivering nationwide retrofit at scale in the UK. Years of boom-bust policy-making has left industry “decimated”, and there is a need for long-term certainty to build back the confidence needed to plan and invest in skills and supply chains.

E3G go on to say that this is compounded by additional “nuts and bolts” challenges associated with delivering current government-backed retrofit schemes, which are struggling to achieve their full potential. The UK’s cornerstone fuel poverty energy efficiency programme, ECO, is currently delivering at around a quarter of its intended scope, and energy efficiency installers report problems associated with meeting the scheme’s criteria.

As part of their analysis, E3G has made recommendations to build strong foundations to build up the retrofit market rapidly and sustainably. These include tightening energy efficiency standards for the private rented sector (PRS), introducing an energy saving stamp duty, supporting installers in skilling-up in order to deliver programmes to a high standard, and boosting household awareness across the country.

Juliet Phillips, senior policy advisor at E3G said: “Getting on track for UK climate and energy security targets will require a significant step-up from today’s level of investment in energy efficiency and heat pumps. Currently, there is a warm homes postcode lottery in the UK – with a need to level up access to skills, support and subsidies.

“In the global race to spur investment in clean industries, the UK can gain a competitive edge by ramping up long-term support for this vital sector by providing the right set of policies and economic incentives. The forthcoming Spring Budget provides a platform for the government to launch a decade-long programme to support warmer homes, green industries and good jobs across the whole of the UK.”

For more information, you can read E3G’s briefing here.