What is the social housing decarbonisation fund?

The Eco Experts

Britain needs to reach carbon-neutral status. For that to happen, older properties must become more energy efficient. In light of this fact, the UK government has introduced something called the Social Housing Decarbonisation Fund.

But what is this fund? And how will it help UK citizens in social housing decarbonise their properties? This article explains everything you need to know.

A row of social housing in London, UK

What is the Social Housing Decarbonisation Fund?

It’s no secret that our homes are amongst the biggest contributors to the UK’s carbon footprint, with properties accounting for a significant chunk of our total carbon emissions (around 40%).

However, retrofitting a lot of the older social houses is a monumental task, one that requires not only a lot of coordination, but also a lot of money. This has prompted the UK government to set up the Social Housing Decarbonisation Fund, which kicked off in 2019.

The fund has only just opened up the first stage of the scheme, though the initial funding is significant – £160 million has been made available to landlords involved in social housing. They will all bid upon a share of the funding, which they will then be obliged to spend on improving the social homes they manage.

Although initial bidding applications for the fund ended October 15th 2021, it is expected that the next round of funding will be made available to bid on in early 2022. For those that did manage to apply before the initial deadline, information on successful applications will again appear early next year.

Why has it been set up?

The UK has an issue with the energy efficiency of its social housing. The fact is, much of the social housing in the UK (as well as other types of UK housing) was built before we fully understood the need for energy efficiency, and/or at a time when the technology simply wasn’t available yet.

As a result, millions of people living in social housing across the UK are living in properties that have poor energy efficiency ratings. This in turn is causing tenants to pay more than they should in energy bills, adding to the rising wealth inequality present in the UK right now.

The fund specifically targets social housing with an Energy Performance Certificate rating of ‘D’ or below. There are currently around 1.6 million social houses that fall into this category.

The fund aims to both reduce the financial strain on those living in social housing, and help people keep their homes warm when they might otherwise turn off the heating to save money.

Who is going to benefit from the fund?

The UK’s Department of Business, Energy and Industrial Strategy (BEIS) estimates that roughly 38,000 social homes will benefit from the first wave of funding. These homes will receive energy efficiency upgrades including better insulation, new doors and windows, and more efficient heating systems.

These enhancements will help tenants save up to £170 per year on their energy bills, all the while making their homes more energy efficient, easier to warm, and better for the environment.

In future funding stages, tens of thousands of other people living in social housing will be able to see improvements to their homes.


What councils are involved in the fund?

Thus far, a total of seventeen councils have successfully applied for the first wave of the Social Housing Decarbonisation Fund. This includes the Royal Borough of Kensington and Chelsea, which was awarded £19.4 million to retrofit an estimated 535 homes, which will make up the first of the inroads towards a decarbonised neighbourhood.

Other councils include Cornwall Council, which was awarded £1 million to retrofit approximately 75 homes, and Sunderland City Council, which received £900,000 to retrofit roughly 59 homes. Whilst there is a clear disparity in the amounts awarded, this does still represent the first step towards making the UK’s social housing more eco-friendly.


What has been done with the fund so far?

Details on what work has actually been done so far are limited, but each of the successful councils have outlined what they intend to do with the money. For example, Cornwall Council has stated that it will install external wall insulation across the 75 or so homes that are covered in the initial funding.

It also plans to replace oil and gas heating with new air source heat pumps, an exciting technology that uses the ambient warmth in the air to heat a home. Other retrofitting additions include solar panels, which will help Cornish residents generate their own electricity, reduce their overall energy bills, and increase the efficiency of their homes (read more: Are Solar Panels Worth It?)

Two air source heat pumps outside a property.

What retrofitting measures are covered by the fund?

The main point of the Social Housing Decarbonisation Fund is to retrofit social homes to be more energy efficient, so it’s important to understand what this means. One thing not made totally clear in the fund’s details is that certain requirements must be met in order to actually qualify for the funding.

For example, if a landlord wanted to install a heat pump (either air source or ground source), they would first need to ensure that their property adhered to a ‘fabric first’ approach. This means a landlord must focus on heat-loss prevention as a priority, before any other energy-reducing measures are installed.


What is included in a ‘fabric first’ approach?

A ‘fabric first’ approach is a specific way of improving a building’s thermal properties. It is widely regarded as the most effective first step to take in making a property more energy efficient. This approach allows a property to immediately start retaining more heat, which very quickly reduces occupants’ heating bills.

A ‘fabric first’ approach means:




  • Better airtightness in buildings. This helps limit the amount of heat escaping from a building, and stops drafts from entering.

Improved design for greater solar gain. In short, this allows a building to retain more of the sun’s warmth.

Will there be more funding in the future?

As it stands, the Social Housing Decarbonisation Fund is set to provide a total of £3.8 billion in funding over a 10-year period. There aren’t any details yet on whether the fund will continue after these initial 10 years, but if the UK is serious about reaching net-zero emissions, then there will have to be something in place to pick up the slack.

Next steps

An initiative of this scale is never going to be completed overnight, so a degree of patience is almost certainly needed. Of course, many would argue that time is rapidly running out for the planet, but as a first step, the fund definitely has value. We just hope the UK government continues to expand upon it, because the task of retrofitting all of the UK’s social housing is a daunting one indeed.

Written by:
Tom Gill
Tom joined The Eco Experts over a year ago and has since covered the carbon footprint of the Roman Empire, profiled the world’s largest solar farms, and investigated what a 100% renewable UK would look like. Tom has a particular interest in the global energy market and how it works, including the ongoing semiconductor shortage, the future of hydrogen, and Cornwall's growing lithium industry.
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