The 2021-2026 Affordable Homes Programme and Modern Methods of Construction (MMC) Policy Brief


  • The new Affordable Homes Programme contains plans to support the use of Modern Methods of Construction.
  • The most significant of these is a need to measure and report on use of pre-manufacturing, with higher levels of grant on offer to incentivise this.
  • To maximise delivery of affordable homes, NHC members should consider their approach to these new requirements.

 What is it?

Government has recently announced an £8.6 billion funding package to build almost 120,000 new affordable homes in England as part of the £11.5 billion Affordable Homes Programme (AHP) from 2021-2026. The Affordable Homes Programme 2021-2026, managed by Homes England, has made Modern Methods of Construction (MMC) a key part of the grant programme.

The latest Affordable Homes Programme Capital Funding Guide  sets out plans to support MMC developments: key elements of plans to do this include:

  • Homes England is seeking a commitment from their Strategic Partners to make 25% of their bid MMC (chapter 9 section 3.5).
  • Organisations can also make a Continuous Market Engagement bid whereby the process is more case by case (chapter 9 section 3.5).

Bids can be made by several registered providers as part of consortia.  All agreed projects must start by 2025 and be completed by 2028. This commitment is made within the context of Homes England’s Strategic Objectives to achieve the aggregation of demand and generally boost construction productivity.

As it is a major part of how this new programme will operate as well as the first significant step in promoting MMC as part of an Affordable Homes Programme this brief will mainly focus on the concept of Pre-Manufactured Value (PMV) and what it means for new MMC developments.

What is Pre-Manufactured Value/PMV?

The AHP’s promotion of MMC in housebuilding is to be welcomed as it actively rewards those who utilise a form of construction which will likely boost productivity on a national level.  Additionally, its use of Pre-Manufactured Value (PMV) to calculate MMC gives a clear framework for measuring progress.

To determine the proportion of homes being delivering using MMC, the Government has adopted PMV as a key measurement metric of its funding programme. This measures the proportion of the home that was manufactured off-site. Under the AHP, homes will only meet the requirement of being delivered using MMC if they have a PMV score of 55% or more.

  1. PMV Score

A Pre-Manufactured Value score is generated by an online calculator accessible via this link: Cast PMV Estimator ( score is said to effectively represent the proportion of work that takes place offsite. In order to qualify as an MMC project that is applicable for Homes England funding a development must have a minimum PMV score of 55%. If a project secures a higher score of 75% and above, then a greater amount of funding will be made available.

  1. How to get a good PMV Score

As stated previously a good PMV score is around 55% as this earns an MMC portion of Affordable Homes Programme funding. However, a higher score such as 75% or above will likely ensure access to higher grant rates for the units in question.

2.1 Single Highest scoring category

The most effective way to attain either of these scores is through the use of what the Government deems as Category 1 MMC which the calculator calls “3D Structural Systems”. These are otherwise known as volumetric construction methods and have an average PMV of 73.07% in houses and an average of 75% in any buildings larger than 5 storeys. The highest scoring single method for PMV regardless of building type is Category 1c whereby a structural chassis is premanufactured, the unit is fitted out internally and external cladding or roofing has also been done offsite.

  • Mix and match Approaches

Although slightly less simple, mixing categories of MMC for a development is also possible to reach a higher PMV score, and secure the higher grant rate from the AHP/Homes England. Categories 2 (2D Structural Systems), 3 (Structural Assemblies and Sub-Assemblies) and 5 (Non-Structural Assemblies Volumetric Pods/Panelised) are the best choice for this as a fairly flexible combination of these categories will ensure 75% PMV.

  1. By-products of measuring PMV

It is important to note that as well as monitoring PMV, a PMV score can also illustrate other important elements about a development that might help organisations further emphasise the positives about how they design/develop their portfolio. For example,  the creators of the calculator (Cast) state in PMV’s technical manual  that a higher PMV can also lead to quicker on-site delivery, less disruption in local communities and a lower amount of embodied carbon in the built environment.   

 Other Initiatives

Government’s support for promoting MMC can be seen through several initiatives:

  • The Construction Playbook, launched last December, introduces the possibility of not just longer-term contracts but also policies that encourage shared MMC requirements as well as more common standards like pre-manufactured value in public procurement.
  • In March 2021, Government announced the formation of an MMC Taskforce with a remit to investigate the barriers to MMC and to accelerate the use of MMC. Membership of the Taskforce is being set up.  The Taskforce will be backed by £10m of seed funding and will be based at DLUHC’s new office in Wolverhampton.
  • A recent Government consultation on The Future of the New Homes Bonusscheme from 2022/2023 proposed options for incentivising homes built using MMC methods via an MMC condition on receipt of funding and a premium for MMC.  You can read the NHC’s response to this consultation here.
  • Homes England’s study with Atkins is testing the performance of a range of MMC solutions over the long term.


In summary, the new Affordable Homes Programme brings a stronger focus on the use of Modern Methods of Construction, the most significant change being the introduction of Pre-Manufactured Value, which gives a clear framework for measuring progress.

The kind of approach to tracking and encouraging certain kinds of development seen in this new iteration of the Affordable Homes Programme may be accompanied by additional calculators or metrics to promote decarbonisation and MMC in the future, especially if projects such as the aforementioned Homes England study with Atkins yields positive results.

As a result, it is recommended that to maximise the delivery of much-needed affordable homes across the North, NHC members should develop their approach to meeting PMV requirements through the use of MMC.

 NHC contact

This will be the first of a series of MMC policy briefings produced by the NHC. For any policy enquiries about MMC and how the NHC can assist members who want to adopt it please contact:

Joseph Breen – Policy Specialist in MMC

Finally, if you are already planning an MMC project, NHC members can freely access CPC’s MMC procurement solutions such as NH2 and MB2

Locata – Giving officers on the ground control of their IT systems

A video showing how the “tasks and questions” procedure can help local authority officers design, build and deliver their own workflows

More and more councils are taking control of their customer facing IT systems and configuring their own workflow processes using Locata’s unique intuitive software.

Local authority officers are encouraged to develop their own tasks within the system to suit the processes that work best in their local area.

This means that councils do not need to compromise on their software system as they cast around to find the approximate “best fit” for their local needs.

Instead, the Locata software can be easily adapted using its unique “task and question” procedure to deliver each local authority’s precise requirements.

Kirsty Farmer, Housing Manager at New Forest DC, has been overseeing the introduction of a new Locata module called Private Sector Housing (PSH) at her council.

“I am not from an IT background and have not configured a system before. However, the tasks and question functionality is very simple to use,” she told Locata’s National Users Group (NUG) earlier this month.

“I have been able to tailor the system to how I want the team to work, rather than the confines of the system dictating the way we work.”

The functionality giving control to users of the Locata system was first developed with a module called HPA2, developed for officers to reflect the new duties placed upon them by the Homelessness Reduction Act 2017.

Locata worked with a Development Group formed by practitioners from 27 councils. The officers on the group made it clear during the development of HPA2 that each would need the ability to configure the system slightly differently from each other, based on their own local need.

The resulting homelessness system with its unique “tasks and questions” functionality impressed local authorities across the country and is now used by more than 120 councils.

The platform that HPA2 was built on has now been re-purposed for a series of new modules, including Temporary Accommodation and Rents Accounting, Third Party and Housing Related Support, and Private Sector Housing – each giving officers unique control over their workflows.

“The implementation of the PSH module allowed me to review all of our processes”, Kirsty Farmer told the NUG meeting. “The beauty of the ability to amend the system so freely means I can change processes and fields at any time.

“Previously we would need to instruct our IT department and the software provider, wait a number of weeks and agree a cost to make even the most simple of changes, even if they were possible in the first place.

“With the Locata PSH system I have been able to create multiple case types and add workflows accordingly to manage cases that were often held outside of our previous system.”

Locata is also planning to move its much admired and widely used Choice Based Lettings software over to the new platform to give housing officers even greater control of the way they work as part of a “Complete Lettings Digital Solution”.

To find out how our unique software can benefit your council, please contact Locata at


APPG Housing in the North Leads Way on Green Jobs Agenda with Dedicated Meeting

Next week the All Part Parliamentary Groups representing Housing in the North and Housing and Social Mobility will join forces to host the event ‘Green Jobs, Housing, and Skills’. The event will see Government Ministers, industry stakeholders, and Parliamentarians discuss how to advance the huge job creation potential offered by decarbonising our existing homes.

The event’s inception can be traced to January 2021, where the APPG for Housing in the North launched its rolling focus looking at the ways housing can support the Government’s priorities of achieving net zero, levelling up the regions, and building back better from the Coronavirus pandemic.

At the session, parliamentarians were joined by IPPR North outlining their research, supported by the Northern Housing Consortium, on the environmental and economic stimulus brought about by investing in retrofitting the North’s traditionally older, colder homes.

Decarbonising these homes, as put forward by IPPR North, would lead to the job creation of c.77,000 jobs in the North of England by 2035. It was noted that these figures were extrapolated from research by IPPR indicating that a national programme of similar home improvement works would create c.325,000 jobs in the United Kingdom by 2035, with every region benefitting from associated growth in local enterprises and the wider supply chain.

Subsequent discussion between APPG members centred on the current barriers to scaling up the retrofit supply chain and realising this job creation potential. The industry required to take on the challenge of decarbonising existing homes is emergent as demand from customers is still in a latent phase. At the same time, there are not yet enough workers with the requisite levels of skills, training, and accreditation to take on the scale of home improvements outlined.

The role of the social housing sector was here considered as a route to driving expansion in necessary industries. Social Housing providers are likely to be early adopters of retrofit technology given their role as stock owners and managers of property conditions across neighbourhoods, the sector also has a demonstrable historic capacity to deliver home improvement projects. Equally, social housing providers have a vested interest in driving skills and demand in their own organisations including supporting residents into secure livelihoods. Investing first in decarbonising social rented homes could thus offer a ‘catalytic role’, unlocking the decarbonisation of other tenures by driving supply chain growth, pushing down costs, and driving up skills development over time.

The meeting is open to all observers, and more information, including how to confirm your attendance, can be found here:

Social Housing Tenants’ Climate Jury Completes – Recommendations to the Sector Launches at Northern Housing Summit

With the Social Housing Tenants’ Climate Jury recently completing, eyes now look ahead to the Northern Housing Summit where the Jury’s recommendations to the Sector will be launched.

The Jury brought together 30 social housing tenants from NHC members First Choice Homes Oldham, Karbon Homes, Salix Homes, Thirteen Group, and Yorkshire Housing to question experts and work together to give their views as to how tenants, social housing landlords, and others could work together to tackle climate change in our homes and neighbourhoods.

The process was designed to bring tenants into the heart of the discussion on preparing homes for net zero. In turn, gaining a greater understanding of

The final group of tenants was the result of a random invitation process, with 7500 invitations being sent to households from involved landlords tenant base with an invitation to be involved. From the 162 applications to take part, sampling was used to establish a group that reflected what we know about the demographics of social housing tenants in the North of England.

Over ten weeks, and 30 hours of deliberation, the Jury heard from and discussed climate change with invited experts coming from organisations like The Grantham Institute for Climate Change and the Environment, the Chartered Institution of Building Services Engineers, National Energy Action, and representatives from the Department for Business, Energy and Industrial Strategy. The Jury were also able to question Lord Callanan, Minister for Business, Energy and Corporate Responsibility, as part of the process.

At the end of the ten week Jury, 19 recommendations were finalised under four key themes:

  • Retrofit Technology
  • Costs and Managing Disruption to Tenants
  • Education, Raising Awareness, Communications and Housing Association Collaboration
  • Tackling Climate Change in Our Neighbourhoods

The detailed recommendations contain a number of practical suggestions to the sector as well as longer term ambitions to ensure social housing leads on tackling climate change through good quality retrofit programmes and creating greener healthier neighbourhoods. They underline the sense of urgency felt by the group, an emphasis on ensuring high standards, a need to develop considered retrofit strategies over the medium-longer term, suggestions as to how communication can be made more honest and transparent, how the sector can be upfront on costs both now and in the future, the value placed on collaboration and pooling risk and reward across the region, and finally how the sector as a whole, both tenants landlord officers, can improve its knowledge on both renewable heating technology and climate change more broadly.

The Northern Housing Summit will this year host the official launch of the Social Housing Tenants’ Climate Jury and offers a first look in detail on the Jury project. Attendees will be joined by a number of people involved in the project; Nick Atkin, Chief Executive, Yorkshire Housing, and Donna Cezair, Chief Executive, First Choice Homes Oldham, who will both discuss why they decided to support the work and how they will work with the Jury’s Recommendations; as well as Jenny Osbourne, Chief Executive, TPAS, and Rashida Owoseni, a Customer Committee Member at Salix Homes, who both formed part of the Jury’s Oversight Panel.

For further information and to confirm your attendance at the Northern Housing Summit, follow this link:

The Social Housing Tenants’ Climate Jury’s dedicated webpage, including further information on the Jury process as well as recordings of the presentations by the Jury’s invited commentators, follow this link:

Wellbeing series with Mental Health in Business: training and support

We’ve partnered with Mental Health in Business (MHIB) to offer reduced-price training for NHC members.  

The team at MHIB have many years’ experience working within the mental health and wellbeing fields, including qualified mental health first aiders, clarity™ certified coaches and Samaritan listeners. Committed to supporting businesses in promoting, improving and raising awareness of the importance of mental health in the workplace, MHIB are offering three workshops at a reduced rate for NHC members. 

Anxiety & Change 

A number of factors contribute to a person experiencing good mental health and well-being from day to day. Being calm and clear-headed at work are signs of good mental health; which result in good performance, job satisfaction and a happier workforce.  

But what happens if employees are experiencing the opposite of calmness and clarity?  

This can be a sign that employees are experiencing high levels of stress, anxiety and overwhelm which if left unchecked (and unsupported) could result in serious ill-health, poor performance, and sickness absence. 

Individuals attending this workshop will learn about some of the the triggers of anxiety, how to manage feelings of anxiety and improve overall well-being. 


Resilience is fundamental to good mental health and well-being, and success in business/work and life. Resilience is something that can be developed and is a major protective factor against mental ill-health.  

This 2-hour workshop will explore how we can all develop resilience in ourselves and in our teams. This will include practical advice and tools to help you to build your own resilience, including how to set appropriate boundaries.  

The session will involve interactive discussions and group exercises which are specially designed to ensure effective learning in a short timeframe within an online environment. 

Stress & Burnout 

Since early 2020, we have collectively been living through an extraordinarily stressful time – most people have been coping with unforeseen change and challenges, uncertainty, anxiety and worry.  

Many people have had their businesses hugely impacted by the coronavirus pandemic, many have lost their jobs, been adapting to working at home, coping with isolation and home-schooling children who may themselves be struggling emotionally. Sadly, many people have been bereaved during the pandemic and, like many people with existing physical or mental health conditions – may not have been able to access the support needed. 

We all experience stress to some degree – some might say that some stress is healthy or helpful, because it motivates us and keeps us moving. However – there is considerable evidence that suggests that high levels of persistent stress at work can lead to mental ill-health and contribute to serious physical ill-health or even burnout. 

This powerful workshop will help attendees to manage stress better and avoid burnout. 

Sessions can be delivered online or in person for a reduced rate of £846 + VAT – this is a saving of over £600 on standard prices, for bookings made before 31st December 2021. 

For more information, contact

North Homes Retrofit: The Health Dividend

Author: Sue Adams, CEO of Care & Repair England

The Covid-19 pandemic has focussed attention on the connections between poor quality housing, people’s health and wellbeing. The pandemic has also ‘exposed and amplified housing-related health inequalities’ [Kings Fund, 2020] and revealed that sectors of the population who are more likely to live in poor housing (older people, those with long-term health conditions, BAME groups, those on low incomes) are often the same groups more vulnerable to Covid-19.

This disproportionate impact of Covid-19 on disadvantaged communities has been starkly evident in the North, as more evidence emerges of the significant geographical differences in death rates and falling life expectancy (Marmot, 2021).

Even before the pandemic, austerity had taken its toll on the health of people living in disadvantaged areas of the North. Whilst life expectancy rose in most places from 2000-2010, from 2010 in some areas it started to decline. By 2014 that life expectancy deterioration had accelerated, and the worst-hit places were urban areas in the North, including Blackpool, Leeds, Liverpool, Manchester and Newcastle (Lancet Public Health Journal, 2021).

The Commission for Housing in the North played a critical role in highlighting the poor condition of many existing homes in the North, noting that national housing policy and resources were focused on new home building, whilst maintaining or improving our current housing stock was, to say the least, a neglected area.

Following on from this observation by the Commission, the NHC tasked the Smith Institute to examine the health impacts and wider costs of poor housing.  The hidden costs of poor quality housing in the North identified the scale of costs to the NHS and social care, as well as negative economic, welfare and environmental impacts. It also revealed the high concentration of non-decent homes in the owner occupied sector in the North, with 1 million households affected compared with 354,000 private rented.

The worst affected households were older home owners, and that situation continues to this day. Shockingly, our recent analysis of non-decent homes data reveals a rise of 31% in the number of those over 75yrs living in a non-decent home, with a disproportionate impact on those living in the North. A third of all of the non-decent homes occupied by householders over 75yrs in England (700,705) are in the North (233,425). Given the increasingly serious health impacts of cold, hazardous homes as people age, this has potentially dire consequences for the NHS.

Sadly, despite the Commission’s recommendations and NHC/ Smith Institute evidence, when it came to housing renewal policy, funding or action, little changed over the subsequent five years and to this day there is no dedicated, national capital funding or programme to improve non-decent homes.

However, the challenge of climate change has now highlighted the critical importance of retrofitting the existing housing stock to reduce carbon emissions, with NHC championing the case for investment to improve the thermal standards of homes in the North.

Social landlords can undoubtedly play a key role in this housing transformation, and they could make a huge difference not only for their own tenants but also for those living in other tenures. As early supporters and developers of original Care & Repair and home improvement agencies, they demonstrated vision and wider social purpose. It is no accident that most of the remaining Care & Repair services that are still delivering housing help that goes beyond Disabled Facilities Grants (important as these remain) are in the North of England. They continue to be the leading national pioneers, including targeting housing interventions at the most at risk NHS patients e.g. Manchester Care & Repair contacts and offers housing help to every older patient discharged from hospital.

The Northern Mayors are making the links between action on climate change, improving current homes, health inequalities, employment creation, and economic regeneration. There is a strong case for CO reduction retrofit programmes to incorporate small but critical ‘Healthy Homes’ measures to tackle other non-decent homes hazards (e.g. falls) into programmes of work. For a very small additional cost the health dividend would be significant, and it would leave homes not only warmer but also healthier and safer for generations of occupants.

With the necessary investment, the North could be the first demonstrate far reaching fiscal and social benefits of co-ordinated housing retrofit, including health gains and reductions in health inequalities. Let us hope some of those making decisions at COP26 are listening.


Heat and Buildings Strategy Published

The Heat and Buildings Strategy has finally been published and will have wide-reaching implications for households, landlords and councils.

The package of measures in the strategy amounts to a £3.9bn from Government, of which £450m will be spent on grants subsidising the upfront cost of heat pumps for homes. £800 million has been pledged for the Social Housing Decarbonisation Fund over the next 3 years, with a further £950m for Home Upgrade Grants.  The Strategy also announced that Government intends to consult on a long-term regulatory standard to improve social housing to EPC C.

The Heat and Buildings Strategy builds on pledges made in the government’s 10 Point Plan for a Green Industrial Revolution, and the Energy White Paper.

Pledges included:

  • £3.9 billion funding package to decarbonise heat and buildings.
  • £5,000 government grants from April next year through a £450 million 3-year Boiler Upgrade Scheme to help install low-carbon heating systems. (This is not open to social landlords, but will run alongside other funding packages such as the Social Housing Decarbonisation Fund).
  • £60 million Heat-Pump Ready Innovation Fund to make clean heat systems smaller and easier to install and cheaper to run.
  • All new heating systems installed in UK homes from 2035 to be low carbon.
  • At local level, continued support for the Local Net Zero Hubs (previously known as the local energy hubs).

The £3.9bn funding for decarbonising heat and buildings for the 3-year spending review period 2022 to 2025 is broken down as follows:

  • £950 million for the Home Upgrade Grant scheme
  • £800 million for the Social Housing Decarbonisation Fund
  • £450 million for the Boiler Upgrade Scheme
  • £338 million for the Heat Network Transformation Programme
  • £1.425 billion through the Public Sector Decarbonisation Scheme

Also launched is the Net Zero Strategy: Build Back Greener.  This strategy sets out policies and proposals for decarbonising all sectors of the UK economy to meet net zero target by 2050.

Local Climate Action

Key Points in the Strategy

  • Set clearer expectations on how central and local government interact in the delivery of net zero.
  • Build on existing engagement with local actors by establishing a Local Net Zero Forum to bring together national and local government senior officials on a regular basis to discuss policy and delivery options on net zero.
  • Continue the Local Net Zero Programme to support all local areas with their capability and capacity

The Strategy recognises the role of local government in meeting climate targets and sets expectations on how central and local government interact.

Government will continue to support the Local Net Zero Hubs (previously known as the local energy hubs). The North is home to two such Hubs – the North West Hub, based at Liverpool City Region; and the North East and Yorkshire Hub, hosted by Tees Valley Mayor and Combined Authority.

BEIS will establish Local Net Zero Forums to bring together national and local government to discuss policy and delivery options on net zero.  Chaired by BEIS, the Forum will be cross departmental and bring together national and local government senior officials on a regular basis to discuss policy and delivery options on net zero.  The Forum will support the establishment of clearer delivery roles for local government and provide a single engagement route into HM Government in a coordinated and coherent way.

The Strategy recognises that there are multiple funding streams at local level and a review will look to simplify and consolidate funds which target net zero initiatives at the local level where this provides the best approach to tackling climate change.

For local planning authorities there will be a review of the National Planning Policy Framework to make sure it contributes to climate change mitigation and adaptation as fully as possible.

Measures to increase heat pump installations

Key Points in the Strategy:

  • reduce the upfront and running costs
  • improve installation process and increase consumer satisfaction
  • increase public awareness and consumer familiarity
  • improve UK supply chain capacity and capability

Heat pumps are recognised by the Strategy as a key solution for decarbonising homes.  In addition to the Boiler Upgrade Scheme described above, a number of other measures have been announced. The Heat Pump Ready Programme will support the development of innovative solutions across the heat pump sector. The programme is expected to launch in winter 2021.  Heat Pump Ready innovation programme, part of the Net Zero Innovation Portfolio.

Government aims to drive down the cost of low carbon heating technologies like heat pumps, with heat pumps costing the same to buy and run as fossil fuel boilers by 2030, with big cost reductions of between a quarter and a half by 2025 expected as the market expands and technology develops.

Householders will not be forced to remove their existing fossil fuel boilers, with this transition over the next 14 years seeing households gradually move away from fossil fuel boilers.

To ensure electric heat pumps will be no more expensive to run than gas boilers, Government wants to reduce the price of electricity over the next decade by shifting levies away from electricity to gas. A call for evidence is expected to be published with decisions made in 2022.

A Heat Network Efficiency Scheme (HNES) demonstrator programme will help existing heat network projects ensure they are running at optimal levels to maximise carbon savings and heating services provided to households and businesses.

Green Skills

Key Points in the Strategy

  • Publish sector and supply chain development plans for key low carbon sectors
  • Work with business to encourage investment in green skills
  • Support the development of a skilled, competitive supply chain
  • Legislate for skills required for jobs that support action on climate change
  • Deliver a Lifetime Skills Guarantee and grow key post-16 training programmes
  • Introduce a sustainability and climate change strategy for education

The Strategy recognises in the construction and heating sectors, up to 230,000 skilled trades people could be required in 2030 to deliver the retrofitting of houses and to meet our ambition of installing 600,000 heat pumps a year by 2028, we will need to rapidly increase the number of qualified installers from around 3,000 to 35,000 within the next 7 years.

The Strategy addresses the challenges set out by the Green Jobs Taskforce and that these require further work through the cross-cutting delivery group, maintaining the momentum generated by the Taskforce to drive action across the green skills agenda.  Further evidence is required on the skills gaps which could hamper the net zero transition if left unaddressed, and to identify further opportunities to flex key skills programmes to support green sectors and occupations.

Further consultations

The Strategy either launches or promises consultation in several areas:

  • A consultation will be held on the case for enabling or requiring new gas boilers to be readily convertible to use hydrogen (‘hydrogen-ready’) by 2026.
  • Consideration will be given to setting a long-term regulatory standard to improve social housing to EPC band C. Consultation will be held with the sector before setting any regulatory standard.
  • A Fairness and Affordability Call for Evidence will be launched on these options for energy levies and obligations to help rebalance electricity and gas prices and to support green choices, with a view to taking decisions in 2022.
  • A consultation is launched seeking views on proposals to introduce a market-based mechanism to support the development of the UK market for low-carbon electric heat pumps.
  • Phasing out fossil fuel heating in homes off the gas grid Government is seeking views on proposals to phase out the installation of fossil fuel heating systems in homes off the gas grid.
  • The Government published its response to the Clean Heat Grant proposals within the Future support for low carbon heatconsultation, which sets out plans for a Boiler Upgrade Scheme.

NHC Reaction

A new funding injection of £450m over three years for heat pump installation is a boost for the manufacturing and installation of this technology, but we must consider the scale of the transformation needed.

In the North alone this includes an estimated 4.6 million homes needing heat pump installation, and 1.1 million homes to be connected to heat networks.

£450m delivered via individual £5,000 grants will mean 90,000 heat pump installations over three years which falls short of the Government’s aim to deliver 600,000 heat pumps a year by 2028. Of the 600,000 heat pump installations a year by 2028 – half will be to existing housing, requiring insulation first.  There will be just three years to make this transformation happen.

Investment will help to drive down the cost of heat pumps, and technical innovation plus skills training is a part of this, but so is the scale of the challenge.

The Strategy talks about regional differences and the need for local supply chains to be developed, and the retention of local Energy Hubs is a positive here. It will be important the awaited Levelling Up White Paper takes account of this economic opportunity.

Tracy Harrison, NHC Chief Executive said,

“Whilst we welcome today’s announcement, the Government have missed the opportunity to make a far bigger impact on their net zero and levelling-up agendas. Accelerating and targeting investment in the Social Housing Decarbonisation Fund would have injected certainty into regional supply chains, laying the ground for tens of thousands of good green jobs across the North. The Chancellor must use next week’s Spending Review to confirm that today’s announcements are just the start of a more ambitious long-term investment plan.”

In our submission to the Chancellor as part of the three-year Spending Review we have called for the acceleration of Conservative Manifesto commitments to bring forward the full £3.8bn Social Housing Decarbonisation Fund into this Spending Review period (2022-23 to 2024-25).  The offer of £800 million released for the Social Housing Decarbonisation Fund over the spending review period is modest in comparison to the scale we estimate is needed to incentivise the market.

The full release of the Social Housing Decarbonisation Fund would unlock a further £2.1bn of contributions from landlords, creating a total investment of more than £8.4bn in energy efficiency nationally.

We also recommended to Government that investment is allocated via BEIS’ local Energy Hubs on the basis of each Hub’s share of England’s fuel poor households. This would result in a £2bn investment in energy efficiency across the North from Government, co-funded with over £700m from social and private landlords, creating a combined £2.76bn investment in the North’s homes over this spending review period: tangible evidence of Government’s commitment to levelling-up.

Read the NHC’s spending review submission here and look out for our on-the-day briefing when the Chancellor sets out his spending plans next Wednesday, 27th October..

Spending Review 2021: NHC makes the case on net zero and levelling-up

Chancellor Rishi Sunak will present his multi-year spending review next week – and the NHC has been making the case that housing in the North can help him deliver on net zero and levelling-up.

Our Spending Review Representation focuses on three key priorities:

Delivering on net zero and levelling-up through a programme of green home upgrades

We’re urging the Chancellor to confirm and accelerate Conservative Manifesto commitments to invest in green home upgrades.  We argue that:

  1. The full £3.8bn Social Housing Decarbonisation Fund should be brought forward into this Spending Review period (2022-23 to 2024-25).
  2. The £2.5bn Home Upgrade Grant programme for private rented and owner-occupied homes should be confirmed.

The Heat and Building Strategy published this week set out allocations to these funds for the next three years. But regardless of how much is earmarked, to ensure that this investment reaches places in need of levelling-up, and avoid the uneven outcomes that can be delivered by national competitive bidding rounds, we’re urging the chancellor to target this investment on the basis of fuel poverty, allocating funding via BEIS’ local Energy Hubs. This would also inject confidence into regional supply chains, enabling them to gear up capacity and skills to meet forthcoming demand.

The clear and objective targeting mechanism we’ve set out would result in an allocation of over £2bn to the North of England, which has some of the country’s highest levels of fuel poverty. With co-investment from private and social landlords, this would result in a coordinated investment of £2.76bn in the North’s homes : levelling-up in action.

Delivering on net zero and levelling-up through enhanced local capacity

We’re calling on the Chancellor to enable our councils to deliver more and better homes by addressing the capacity constraints that hold us back. Our evidence shows that spending on housing services by councils in the North has reduced by 58% since 2010 – compared to a reduction of just over 1/3 elsewhere in England.  We argue that the Spending Review should set out a clear commitment to a real-terms increase in local government funding. We also argue that Homes England’s strategic objectives should be updated to clearly focus the Agency’s significant human and financial capacity on contributing to levelling-up and net zero.  Re-building capacity would enable councils to do even more to deliver more and better homes; and unlock their crucial local leadership in tackling the ¼ of carbon emissions across the North which come from our existing homes.

Delivering on net zero and levelling-up by making better use of brownfield land

The Chancellor should build on the success of the Brownfield Housing Fund he launched at his first budget by investing £500m in a further round of the fund.   This would enable housing in the North to tackle eyesore brownfield sites and enable the development of 30-40,000 new homes for ownership and rent, creating and protecting jobs in remediation and homebuilding.  This also delivers on net zero by enabling the construction of new energy-efficient homes on former brownfield sites, which are often centrally-located and served by existing infrastructure, reducing their environmental impact further.  Brownfield land can’t meet all the North’s diverse housing needs, but this investment would build on the success of the existing fund – building out more of the North’s 5,000 brownfield sites – changing the local housing mix and providing visible evidence of investment and confidence.

The NHC has been making the case on net zero and levelling-up through extensive engagement with MPs, Peers, ministers, officials and the media. In October alone, our analysis has featured in The Times; and NHC CEO Tracy Harrison has appeared on BBC Politics North and on Look North outlining the case for the Chancellor to invest in Green Home Upgrades. Many thanks to NHC members who have shared our representation with local MPs.  The full document is available to read online, and you can expect an on-the-day briefing with the key announcements to hit your inbox next Wednesday.

Delivering on net zero and levelling-up through green home upgrades

On Wednesday 27th October, Rishi Sunak will deliver his long-awaited Spending Review, which we expect will set out Government plans to invest in readying our homes for net zero.

Over the last eighteen months, the Northern Housing Consortium has been making the case that a programme of green home upgrades in the North of England presents him with an opportunity to deliver on two of the Government’s top priorities: net zero and levelling-up.

Upgrading homes would not only cut carbon (the North’s homes are responsible for over ¼ of the region’s emissions) but also create thousands of jobs in areas targeted for levelling-up – we reckon there’s potential for 77,000 good green jobs undertaking home upgrades across the North by the 2030s. Investing in home upgrades would also provide evidence of Government’s determination to tackle the rising cost of energy, which is a real threat to living standards in our region.

To unlock the potential of green home upgrades, here are the three things we need the Chancellor to do on the 27th October:


  1. Confirm plans to invest.

The 2019 Conservative Party manifesto pledged £3.8bn to decarbonise social housing, and a further £2.5bn for Home Upgrade Grants for the private rented and owner-occupied sectors.  We need Rishi Sunak to confirm these plans. If he does so, our Spending Review Representation estimates he will unlock a further £2.1bn of contributions from landlords, creating a total investment of more than £8.4bn in energy efficiency across the country.


  1. Accelerate that investment

A lot has changed since the Conservative manifesto was published in 2019. Rapidly rising energy prices make the need to act more urgent; and a global pandemic has slowed progress on the Government’s important levelling-up agenda.  That’s why we think there’s a strong case to accelerate the 2019 plans – bringing them forward within this 3-year Spending Review period, rather than trickling them out over a longer period, as originally proposed.


  1. Target that investment.

To maximise the local impact of this investment, Government must make sure funding finds its way to places in need of levelling-up. Our Spending Review Representation sets out a clear and objective way to do this : allocating investment via BEIS’ local Energy Hubs on basis of the share of England’s fuel-poor households within each Hub area. That would result in an allocation of over £2bn to the North of England, which has some of the country’s highest levels of fuel poverty. With co-investment from private and social landlords, this would result in a coordinated investment of £2.76bn in the North’s homes: levelling-up in action.

Targeting the investment might be the third point in this list, but it’s a vitally important step. It would ensure the funding reaches the homes and places that need it, and avoid the uneven outcomes that national competitive bidding rounds can deliver.  It would send clear signals to the private sector supply chain about the scale of investment work coming forward in each region – enabling them to scale-up their capacity in anticipation of the work to come.

This Government has legislated for the most ambitious carbon reduction target in the industrialised world, and will play host to COP in November. Its pledge to level-up has even more resonance in light of the pandemic and the ongoing squeeze on living standards brought about by fast-rising energy prices. If Government want to cut carbon, control household bills, and create jobs, then a green home upgrade programme is the way to go.  On October 27th, Rishi Sunak must confirm, accelerate and target investment in green home upgrades: delivering on net zero and levelling-up.