UKGBC responds to the Government's Autumn Budget 2025

Simon McWhirter, UKGBC's Chief Executive, responds to the government's Autumn Budget 2025. Read UKGBC’s take on the investment and fiscal measures announced across our policy platform.

Today, Chancellor Rachel Reeves set out her plans for the UK economy during her Autumn Budget in the House of Commons.

Cutting funding for insulation is bloody reckless, it will cost jobs and make Britain’s homes colder and more expensive to heat. While we welcome the electricity levy reduction announcement, this progress is overshadowed by the damaging cut to the national insulation scheme. After claiming global leadership at COP30 last week, this move delivers the opposite at home. Cutting this funding, on Fuel Poverty Awareness Day, will destroy thousands of jobs, wipe out investor confidence, and leave low-income households colder and paying higher bills.”
Simon McWhirter, Chief Executive, UKGBC

Analysis

There’s a complete mismatch between government’s claimed climate leadership position on the global stage last week at COP30, and this latest budget rollback on its already fragile domestic agenda.

The government’s decision to cut funding for the national insulation scheme (ECO) on Fuel Poverty Awareness Day is nothing short of reckless. The industry has already been destabilised by years of stop-start policymaking, but today’s decisions will cut thousands of jobs overnight – destroy investor confidence, freeze private capital, and once again leave households paying the price.

This significantly undermines the Warm Homes Plan, creating a major deficit in the funding which will worsen fuel poverty, deepen health inequalities, and lock people into higher bills for years to come. We urge the government to address this short-sighted move and replace this funding with a reformed scheme which delivers for the households who need it most.

However, we welcome the Chancellor’s decision to significantly reduce the levies currently inflating electricity bills by temporarily removing three-quarters of the Renewables Obligation cost from household bills. Cutting electricity prices is one of the fastest and fairest ways to lower bills and support the shift to clean, efficient electric heating. This move directly tackles a long-standing distortion that has made electricity artificially expensive, holding back heat pump adoption and penalising households already struggling with high costs.

Reducing these levies will give families immediate relief, while helping to unlock the investment needed to electrify our homes and stabilise energy bills for the long term. It is a smart, strategic step that will reduce fuel bills overall, help address fuel poverty, and strengthen the UK’s energy security. The government must now build on this by delivering a long-term plan that permanently rebalances energy taxes and supports households to upgrade their homes.

Key Announcements from Budget Documents on Warm Homes, Retrofit and Clean Heat

Energy Bills & Levies

The government announced several major changes to the way energy policies are funded:

Energy Company Obligation (ECO) to end in March 2026: ECO has been a core part of the UK’s fuel poverty and retrofit strategy for two decades. The government will not continue placing its costs on energy bills.
£1.5 billion of new Treasury funding for fuel-poor households: This is intended to replace elements of ECO and support home upgrades through the Warm Homes Plan.
Renewables Obligation (RO) relief for households: For three years (2026–27 to 2028–29), the government will fund 75% of the domestic share of the Renewables Obligation, with only 25% remaining on electricity bills. This is expected to reduce electricity prices by temporarily removing part of the subsidy cost currently paid through bills. The government has also said it will bring forward further measures to reduce electricity costs relative to gas, with details to be set out in the Warm Homes Plan.
Warm Home Discount expansion: An additional 3 million low-income households will become eligible for the £150 rebate.

Planning Reform

Several major planning changes were confirmed, which the government argues will speed up housing and infrastructure delivery:

The new National Planning Policy Framework (NPPF) is forecast to increase annual housebuilding by 30% by 2029–30, adding an estimated 170,000 extra homes over the period.
Councils and ministers have also approved new commercial projects on grey belt land, including data centres and film studios.
Wider reforms aim to support delivery of: 1.5 million homes in England; 150 major infrastructure consents; create additional commercial premises.
1,400 extra staff will be recruited across planning and environmental regulators to speed up decisions and unlock housing and infrastructure delivery.

Public Assets & Potential for Retrofit

The Government highlighted the need to improve the management and use of its £2.7 trillion of public assets, including £190 billion of property, plant and equipment. This includes:

Ensuring buildings are well maintained.
Commercialising unused space (retrofitting).
And repurposing or disposing of surplus assets, which may create opportunities for retrofit, refurbishment or repurposing of public-sector properties.

Skills & Employment

Several announcements relate directly to workforce development relevant to retrofit, construction and clean heat:

More than £1.5 billion will be invested in employment and skills programmes across the Spending Review period.
Growth and Skills Levy (£725m) to support apprenticeships for young people, including fully funded apprenticeships for SMEs hiring under-25s – More than 90% of companies in the built environment sector are SMEs, meaning the apprenticeship funding changes could significantly expand access to retrofit, construction and clean heat training.