The UK's retrofit industry is sounding the alarm over government plans to axe a major insulation funding scheme, warning of a devastating 'cliff edge' that could leave thousands of homes cold this winter and wipe out an estimated 10,000 skilled jobs.
Budget Cut Creates a Funding 'Cliff Edge'
Chancellor Rachel Reeves used her recent budget to announce a £150 reduction in the average annual energy bill. However, a key part of the funding for this cut comes from the termination of the £1.3 billion Energy Company Obligation (ECO) scheme, which is scheduled to end in March 2025.
This scheme has been instrumental in providing energy efficiency upgrades, like insulation and solar panels, to low-income and fuel-poor households. Industry experts have condemned the sudden withdrawal of funding as chaotic and short-sighted.
Industry Leaders Warn of Immediate Consequences
Anna Moore, former head of UK construction at McKinsey and founder of retrofit firm Domna, did not mince words. "Suddenly yanking £1.3bn in funding is chaotic," she stated, highlighting the dual impact on vulnerable residents and small businesses.
"It has created a cliff edge for thousands of low-income households in fuel poverty as well as small and medium enterprises employing some 10,000 people," Moore explained. She added that funders are already pulling back, with programmes for around 1,500 homes being paused immediately, right in the middle of a winter cold snap.
Joel Pearson, director of solar panel installer Net Zero Renewables, shared his company's direct experience. "We employ and subcontract over 35 skilled individuals, and have helped take more than 200 homes out of fuel poverty through the ECO scheme," he said. Pearson urged the Chancellor to extend the scheme for at least a year to allow for an orderly transition.
Jobs at Risk and a Plea for Clarity
The thinktank E3G has projected that the retrofit sector could lose up to 10,000 skilled positions as small firms struggle to survive without the ECO scheme's pipeline of work.
Lee Rix, managing director of Preston-based installer Eco Approach, emphasised the scale of the impact on his operations. "Each year our 150-plus staff and supply chain use ECO4 funding to make cold, inefficient homes safer and more affordable for thousands of families," he said.
His primary concern is the lack of a clear successor plan. "With no transition plan, ending ECO4 risks leaving those families abandoned and undermining the workforce that supports them – we urgently need clarity on a successor scheme," Rix argued.
Anna Moore concluded with a stark political warning, stating the move "fundamentally goes against Labour’s stated values" of helping the poor and fighting climate change. "This is not the moment to pull up the ladder," she said, calling bridging finance to a new warm homes plan essential to protect residents, jobs, and environmental progress.
