In November 2025, the Guardian reported that the UK government was considering a policy which would create a multi-billion-pound black hole in the budget for the Warm Homes Plan. This would hamstring ambition and performance in schemes across the plan. A range of policies are threatened by this, including the Boiler Upgrade Scheme (the UK’s highly successful heat pump grant scheme) and fuel poverty alleviation through the Energy Company Obligation (ECO) itself, a long-running energy efficiency scheme aimed at tackling fuel poverty.
The plan was to cut funding for the national insulation scheme. Given this scheme’s importance for meeting fuel poverty targets, the Department of Energy Security and Net Zero (DESNZ) would need to find a way to absorb the cost into its existing Warm Homes Plan budget – or see it scrapped altogether.
In collaboration with the Heat Pump Association, E3G coordinated a joint public letter to the Prime Minister and Chancellor to defend planned spending for clean heat and energy efficiency improvements. The rapid response to the letter secured almost 400 signatures from across the home decarbonisation industry. Energy suppliers, leading financial institutions, manufacturers, civil society organisations, and scores of SME businesses all answered the call to action to defend the BUS and warm homes funding more broadly. The Sunday Mirror promoted the story on 23 November.
We call on the Chancellor and Prime Minister to protect warm homes funding in the upcoming Budget on Wednesday 26 November 2025 and prioritise moving renewables levies on electricity bills into general taxation instead of cutting VAT across energy bills. E3G and our joint signatories emphasise that this is the way to permanently lower energy bills, generate growth in our economy, improve the UK’s energy security, and move to a cleaner, fairer energy system for all.
