In her Labour Conference speech, Energy Secretary Miatta Fahnbulleh announced that she would devolve the Warm Homes Plan, the Government’s £15bn funding pot for upgrading homes.

Putting mayors and strategic authorities in charge of upgrading home energy and heating, Andrew Sissons, director, sustainable future mission at Nesta says makes a lot of sense. After all, home heating is an especially localised issue, with local authorities having a better understanding of local housing stocks, fuel poverty levels and supply chains.

But the Government should avoid devolving the Boiler Upgrade Scheme (BUS), which provides direct subsidies to households that get a heat pump.

Devolution for the sake of it in the face of approaches that are working is not a panacea for greater success.

Nesta notes that whilst the Warm Homes Plan has had issues, BUS has been an effective, demand-led subsidy. and more effective at increasing heat pump installations than its Scottish equivalent, the Home Energy Scotland scheme, and much simpler than its predecessor, the Renewable Heat Incentive.

Devolving heat pump subsidies to local government would effectively mean ending the BUS and replacing it with multiple new schemes at local level. Each strategic authority would receive a share of the funding (due to rise to £700m by 2029/30) and would be responsible for spending it, with or without conditions attached by Whitehall (such as whether the money has to be spent on heat pumps, or how big the subsidy should be). This devolved model would create a number of problems.

First, it would be hard to allocate the right amount of funding to each area. Second, it would create huge uncertainty for the heating industry, and third, devolving BUS could add significant friction to the customer journey for heat pumps.

Overall, Sissons notes that devolving the Warm Homes Plan to strategic authorities would be a good idea, but it will work best with some support retained at national level and the Boiler Upgrade Scheme should be part of that.

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