Form

Sustainable Warmth competition: questions and answers

Updated 7 October 2022

Applies to England

1. Delivery and timescale

1.1 What is the delivery timeframe for the funding provided under the Sustainable Warmth competition?

Delivery of HUG phase 1 and LAD phase 3 projects started from January 2022 and installations must be complete by 31 March 2023. Local authorities (LAs) have until the 30 April 2023 to lodge measures with TrustMark and complete their reporting.

1.2 Does LAD phase 3 overlap with LAD phase 1B or LAD phase 2?

Yes, however we are working with LAs to minimise the impact on delivery during the time frame where projects run in parallel. Delivery of the remaining projects under LAD phase 1B and 2 have been granted additional time to complete works with a new delivery completion date up to 30 September 2022, to ensure eligible homes signed up to the scheme can be delivered. We expect the delivery of LAD phase 3 projects to have begun in early 2022 in line with the forecasts LAs set out when they applied for funding.

1.3 Is there any support for issues with contractors?

LAs should contact their account managers in the first instance to raise any issues. Account managers should be notified at the earliest opportunity if there are issues with contractors as this may impact the delivery planned.

LAs can also discuss any delivery issues they are experiencing with other LAs at the HULA Forum. The forums have been set up to encourage knowledge sharing between LAs.

1.4 What is the process if a case of fraud is identified?

LAs should make BEIS aware of any suspected fraudulent or erroneous activity at the earliest opportunity via their account managers and in the relevant section of the Data Collection Template. LAs should ensure that they are reporting all cases of fraud and error, large and small, including preventions, detections, losses, and recoveries.

Each instance of suspected fraud or error will be dealt with on a case-by-case basis through liaison with the Sustainable Warmth Delivery Team, the relevant LA’s own internal fraud/audit mechanisms, and BEIS counter fraud teams where appropriate. Account managers will also request additional information on the case to fulfil our fraud and error reporting requirements.

As outlined in the Memorandum of Understanding (MoU), LAs will be responsible for carrying out the reasonable ongoing due diligence, controlling, monitoring, and reporting of fraud and error, as well as managing and investigating any specific cases of suspected or identified fraud. This includes providing BEIS with an up-to-date Fraud Risk Assessment upon request and maintaining robust fraud management plans. Further information on this can be obtained in paragraphs 67-71 of the MoU or through the LA’s account manager.

1.5 Does Sustainable Warmth have any national branding or a logo?

‘Sustainable Warmth’ is the overarching name for the application process which was used to simplify access to applying for one or both funds. It consists of 2 separate funds: LAD phase 3 and HUG phase 1. As such, there isn’t a logo or other branding produced for Sustainable Warmth.

LAs are encouraged to create their own branding if desired – but should reference that the source of funding is from BEIS.

1.6 Is an LA expected to attend account management meetings with the BEIS team?

As set out in paragraph 57 of the MoU, the “Project Team and the Authority may seek to have a regular monthly meeting to discuss the progress of delivery of the Proposal and any issues arising from the Monthly Report”.

Regular engagement is key to the successful management of your grant. If an LA is not able to attend the monthly meeting with their account manager, we request that this is notified and rescheduled at the earliest opportunity. We would request that you prioritise these meetings to enable us to manage the fund effectively and support you to do so.

2. Grant funding

2.1 Can LAs request more grant funding?

A Local Authority can request additional grant funding if they believe they can successfully deliver a higher volume of measures / households by 31 March 2023. The LA is required to submit a change request to their BEIS Account Manager, detailing the change to delivery if additional grant funding was to be accepted.

2.2 What should LAs do if they are expecting to have an underspend of grant funding?

LAs are encouraged to report any risks and issues early on to their account managers and work with them to identify appropriate mitigations. If underspend is inevitable, then a change request may be required. If an LA is not delivering to the KPIs documented in the MoU, a recovery plan may be requested in which any underspend will be returned to BEIS prior to the end of the project.

2.3 Can LAs request more time to spend the grant funding?

No. BEIS expects each LA to adhere to their proposal for delivery. LAs have been given a 15-month window, from January 2022 until March 2023 in which to deliver the home installations and upgrades for HUG phase 1 and LAD phase 3. If there are indications that your forecast is no longer deliverable within this period, please notify your account manager as soon as possible. Extensions to delivery are not currently permitted.

3. Reporting and data collection

3.1 What happens if a reporting deadline is missed?

LAs are expected to meet the reporting deadlines. If there are any issues with this, the LA should inform their account manager as soon as possible with the reasoning behind why the report is late and when it will be submitted (ideally the team should be informed if a report will be late prior to the deadline). If there is an issue with access/the reporting tool, the account manager should be notified immediately and will then discuss with the BEIS data team how to assist with the issue and pass on this information to the LA. However, it will be the LA’s responsibility to upload the report as soon as possible to avoid escalation.

3.2 Will a Data Dictionary be circulated separately as mentioned in the Data Collection Template?

The reference to a data dictionary was made in error. We had previously planned to issue a data dictionary, but the guidance is now contained within row 6 of each of the sheets of the Data Collection Template. When you open the Data Collection Template you should see this row of guidance, explaining what is required in each column. There is therefore no need to issue a data dictionary.

4. Making a change

4.1 When should an LA submit a change request?

BEIS expects LAs to do all they can to deliver against the forecast set out in their MoU. In the event that an LA cannot deliver the upgrades as set out in the MoU, an accepted Mid-point Review Delivery Plan, or a previously accepted change request, they must notify the Sustainable Warmth Delivery Team as soon as possible using the Change Request Template (form) and no later than 3 months before the end of the Funding Period.

4.2 How does an LA make a change request?

LA Leads should submit requests for change by completing a Change Request Template which will be supplied by the account manager. This should be returned to your account manager, copying sustainable.warmth@beis.gov.uk. Please contact your account manager if you are unsure on this process.

4.3 How long does the change request process take?

The Sustainable Warmth Delivery team will validate the change request by reviewing the details within the change request before submitting it to the Sustainable Warmth Delivery Manager for further assessment/escalation. Following this triage, we will aim to provide a response within 10 working days.

Assessments will be made on a case-by-case basis, following discussions with the LA and taking account of their individual circumstances and the robustness of the evidence submitted.

4.4 What happens if an LA no longer wishes to participate in my consortium?

Please notify your account manager at the earliest opportunity to enable us to appropriately manage the impact of this change on your delivery.

5. Eligible homes

5.1 Can we use ECO Local Authority Flexible Eligibility (LA Flex) for low-income definition?

As set out in the Sustainable Warmth Competition Guidance, local authorities can use their ECO LA Flexible Statement of Intent criteria and verification processes where these are compatible with income thresholds.

Since 1 July 2022, LAs using ECO LA Flex in Sustainable Warmth projects should be signing households up under ECO4 criteria. However, the ECO4 health referral route will still need to be checked to ensure compliance with the £31,000 ECO4 income threshold or the alternative income threshold set out in the initial Sustainable Warmth application.

5.2 Could you please provide clarity on the household income cap and the use of alternative approaches which can be used where the £30k is too restrictive?

In the Sustainable Warmth guidance, we set out that LAs could either use the £30k income threshold or propose an evidence-backed alternative methodology to target low-income households that are likely to be living in fuel poverty. This may have included total household incomes above the £30k threshold in certain areas where higher housing costs mean the resultant household income after housing costs is likely to be below £20k, or where the household composition means that incomes are stretched.

LAs can use their ECO LA Flexible Statement of Intent criteria and verification processes where these are compatible with Sustainable Warmth guidance. ECO3 ended on 31 March with the interim period running from 1 April to 30 June. Since 1 July, LAs using ECO LA Flex in Sustainable Warmth projects should be signing households up under ECO4 criteria. The ECO4 health referral route will need to demonstrate how you intend to ensure the household meets the low-income criteria for Sustainable Warmth.

If you would like to make any changes to the eligibility criteria set out in your Sustainable Warmth proposal, you may request to do so through the change request process.

5.3 What is meant by “off-gas” and “on-gas”?

HUG funding is exclusively reserved for off-gas grid homes (homes which are not heated using gas, i.e. dwellings that use oil, liquid petroleum gas (LPG), coal, solid fuels, or electricity for heating purposes.) Households connected to the mains gas grid for heating purposes are not eligible, including where the primary heating source of a mains gas boiler is broken, and the secondary heating source is electricity.

5.4 Are Alms Homes eligible?

LAs can treat properties owned by charities the same as PRS (the landlord contribution would still be required).

The LA still needs to be sure that the property meets the domestic premises tests set out in the scheme guidance. For a premises to be used as a home, the occupants should be living there on more than a short-term basis (typically more than 3 months). This could be evidenced through the receipt by the occupant of 3 months of utility bills relating to the premises, or the existence of a lease or licence of longer than 3 months in the name of the occupant (such as a tenancy agreement) may indicate that the premises are used as a home. There may be other indicators that may be considered acceptable evidence.

LAs should use their discretion to consider whether funding upgrades to particular households falls within the policy intent to of a fuel-poverty scheme, and whether other residents in their regions would better benefit from upgrades.

5.5 What is being done to allow for listed buildings or those in conservation areas to be upgraded?

These buildings can be upgraded with suitable measures. The PAS 2035:2019 standards set out the assessment and additional considerations that must be taken for heritage, listed and traditional buildings as well as those in conversation areas.

All projects must be compliant with PAS 2035:2019 Retrofitting dwellings for improved energy efficiency. Specification and guidance which is available on the British Standards Institute (BSI) website.

5.6 Can we increase the amount of EPC band D properties compared to what was originally proposed in our application?

For HUG phase 1, LAs should deliver the amount of EPC band D homes set out in their application and should not make changes to their projects without agreement from BEIS through the change request process.

In the scheme guidance we capped EPC band D properties at 30% to ensure that LAs focus on the least energy efficient homes with an EPC band of E, F and G. However, following a review of LAD phase 3, BEIS has decided to allow LAs to include up to 50% EPC band D homes in their projects. Please note that the 50% cap only applies to LAD phase 3 – it does not apply to HUG phase 1. Please contact your account manager in the first instance if you need to discuss your proposed delivery.

5.7 What EPC improvement requirements apply in LAD phase 3 and HUG phase 1?

In the scheme guidance for HUG, we set out that EPC band F-G homes should be upgraded to D or above and band D-E homes to C or above to meet statutory fuel poverty targets of EPC band C by 2030 and the interim milestone of band D by 2025. We have listened to your feedback that a two-band EPC improvement in HUG is not possible for all homes, and it is important that fuel poor households are not excluded from scheme funding as a result.

Therefore, we are open to receiving requests to include homes in your HUG projects that will not meet the two-band EPC improvement where a fabric-first approach is still followed. You will need to include the proportion of HUG homes that are unlikely to reach the two-band improvement. If you need to request this, please contact us to discuss.

For LAD phase 3, we are seeking Reduced data Standard Assessment Procedure (RdSAP) score improvement and an energy bill saving for the resident - there is no minimum target, and the aim is to get as much improvement as possible.

5.8 Under HUG phase 1, the guidance states that EPC band F/G homes must be brought up to band D. This is often not achievable for park homes - can there be some flexibility?

Park homes do not typically have EPC ratings, as such we expect pre and post Reduced data Standard Assessment Procedure (RdSAP) scores to demonstrate levels of improvement. We did not expect park homes to be a prominent part of projects as they account for less than 1% of England’s housing stock.

5.9 If a property had an EPC band D rating when it qualified but comes out as EPC C following the retrofit assessment, can we still include it?

This would disqualify the home from Sustainable Warmth funding as the fuel poverty target is to a minimum of EPC band C. The retrofit assessment is the most up to date data on the property whereas EPCs could be up to 10 years old and still be valid. The property may be eligible for other forms of support such as the Boiler Upgrade Scheme.

6. Eligible measures

6.1 Can solar PV be included, and can it be combined with batteries?

LAs must not make changes to their measure mix without prior agreement from BEIS.

Solar PV is an eligible measure. However, a fabric first approach (installing insulation and heat loss prevention measures as a priority) is strongly encouraged and scored more highly against the ‘Strategic Fit’ assessment in the application form. As such, we required details from LAs in the application form on why solar PV is the most appropriate technology for some homes.

At present, battery storage is not an eligible measure in either HUG phase 1 or LAD phase 3 as storage measures are not included in the Reduced data Standard Assessment Procedure (RdSAP). This could change with the anticipated RdSAP10 update, so we would advise LAs to check for RdSAP updates.

6.2 Are window replacements eligible?

LAs must not make changes to their measure mix without prior agreement from BEIS.

Window replacements are eligible when replacing single glazing under LAD phase 3 and HUG phase 1. Applications where less cost-effective measures (such as double glazing) represented a high percentage of total measures installed (or a high percentage of the total costs of upgrades) received lower scores in the ‘Value for Money’ assessment.

6.3 Can existing old storage heaters be replaced with new efficient ones?

High retention storage heaters are eligible. However, a fabric first approach (of insulation and heat loss prevention measures) is strongly encouraged. We expected LAs to focus on low temperature heat pumps as the lead technology for off-gas grid dwellings in their applications. In homes where low temperature heat pumps are unsuitable for the dwelling, we expect high temperature heat pumps, solid biomass, and high retention electric storage heaters (in electrically heated flats and small dwellings only) to be installed as the next best option for deliverability, value for money, affordability, sustainability, and air quality. High retention storage heaters are required to have at least 0.8 + Standard Assessment Procedure (SAP) responsiveness rating.

Please note, LAs must not make changes to their measure mix without prior agreement from BEIS.

6.4 Are hybrid forms of heating permitted?

Under HUG phase 1, for homes off the mains gas grid, hybrid forms of heating are not permitted.

Funding may be used to install hybrid forms of heating for homes currently heated by mains gas under LAD phase 3. For details, see section 2.15 on eligible measures in the Sustainable Warmth competition guidance.

6.5 How is the boiler efficiency for hybrid system installation determined? What evidence would you expect to be given?

All boilers fitted alongside a hybrid heating system must have an energy efficiency rating under the Energy Related Products system of A or above. Additionally, the retrofit coordinator should be satisfied that the boiler is in good working order to be fitted alongside a heat pump.

LAs must either provide evidence of purchase of a brand-new boiler (which cannot be funded through the Sustainable Warmth competition) or evidence of the efficiency rating of the current boiler.

6.6 PAS 2035 requires ventilation upgrades for many insulation measures. Has mechanical ventilation been factored into the funding? Is improved ventilation (trickle vents/fans) classed as a measure?

Ventilation is not classed as a separate measure as is a fundamental aspect of installing insulation and it must be improved where appropriate to ensure is it adequate for the building post insulation installation. The costs can either be covered by capital or admin and ancillary budgets. Please consult your accounting officer for guidance.

6.7 Is there a list of electric heating measures eligible under HUG phase 1?

We encourage air source heat pumps where suitable for electrically heated homes, and air to air heat pumps or high retention storage heaters in electrically heated flats (or homes where an air source heat pump is not suitable). However, all measures compatible with the Reduced data Standard Assessment Procedure (RdSAP) that improve the energy efficiency of the home are technically eligible, with the exception of heating systems which are solely fuelled by fossil fuels.

6.8 Is the retrofitting of a block of private landlord flats currently using electric heating with a biomass CHP district heating network eligible within HUG phase 1?

Heat networks are eligible within HUG phase 1, if HUG cost caps are not breached.

However, the deployment of biomass CHP heating is restricted to:

• dwellings in areas not subject to air quality control restrictions (that is, rural areas only, not urban)
• dwellings that cannot reasonably or practicably accommodate a heat pump (low temperature or high temperature)
• dwellings that commit to the appropriate maintenance of these systems, and any other sustainability and air quality requirements from the Renewable Heat Incentive, including the exclusive use of sustainable fuel sources to approved standards.

7. Eligible installers

7.1 Are you expecting Sustainable Warmth to be delivered using PAS 2030:2019 and PAS 2035:2019?

Yes. All projects must be compliant with PAS 2035:2019 Retrofitting dwellings for improved energy efficiency. Specification and guidance which is available on the British Standards Institute (BSI) website.

PAS 2035 is the overarching document in the retrofit standards framework. It brings in the ‘whole house approach’ to retrofit and the need for a project to be overseen and lodged in the TrustMark Data Warehouse by a retrofit coordinator. PAS 2035 requires that all energy efficiency measures within the scope of the PAS 2030:2019 standards must be delivered by installers who are certified to this standard and all low-carbon heating measures must be installed by a MCS certified installer. PAS 2035 covers the commissioning, installation, and handover of retrofit projects.

We expect all contractors to work safely as we recover from the pandemic, following COVID-19 secure working practices.

7.2 Do installers need to be both PAS 2030:2019 and MCS certified?

No. Installers must be suitably certified for the measures that they are installing. This will depend on whether they are installing energy efficient measures (PAS 2030;2019) or low carbon measures (MCS) but regardless of measure a retrofit coordinator must lodge all measures in accordance with PAS 2035:2019 on the TrustMark Data Warehouse.

7.3. Do subcontractors need to be PAS/MCS certified?

If the primary installer subcontracts any part of the work involved in installing eligible improvements, this must be carried out in accordance with TrustMark’s requirements, and the relevant PAS or MCS requirements as applicable, regarding subcontracting.

The primary installer assumes full responsibility for any subcontracted work. All measures must be lodged onto the TrustMark Data warehouse by a TrustMark-registered retrofit coordinator.

7.4 Do air source heat pump installers have to be TrustMark registered or is certification via MCS sufficient?

All measures must be compliant with PAS 2035 and the appropriate installation standards. For energy efficient measures this is PAS 2030:2019 and for low carbon heat measures this is the relevant MCS standards. All measures must be lodged in the TrustMark Data Warehouse, therefore retrofit coordinators need to be registered with TrustMark.

7.5 What is the role of the retrofit coordinator?

The retrofit coordinator is the individual responsible for overseeing the assessment of dwellings as well as the subsequent specification, monitoring, and evaluation of energy efficiency measures, in accordance with PAS 2035. Their job is to comply with PAS 2035, ensure quality is maintained throughout, and lodge measures onto the TrustMark Data Warehouse.

8. Funding and eligible costs

8.1 Is there scope to transfer funds between HUG phase 1 and LAD phase 3 (that is, combine the pot)?

No. These are separate funding pots aimed at targeting two different housing stocks. While we streamlined the application process through the Sustainable Warmth competition to ease the burden on LAs, the funding remains separate and must be used as set out in the funding application and subsequent MoU.

8.2 What are the cost expectations for LAD and HUG per home, and will landlords be required to contribute?

LAD phase 3

For owner occupied homes, LAD has a maximum average subsidy of £10,000 and no contribution is required towards the cost of upgrades.

For rented properties (either with a private landlord or social landlord), the maximum average subsidy is £5,000 with the landlord funding one third of the overall cost.

HUG phase 1

The average cost expectations of upgrades are on a sliding scale according to the EPC band and fuel type.

For rented properties (private/social landlord), the landlord is required to fund one third of the cost of upgrades. A breakdown of the costs is provided in the Sustainable Warmth competition guidance.

8.3 Can the cost caps in HUG phase 1 and LAD phase 3 be averaged across all homes?

LAD phase 3

LAD has a maximum average subsidy of £10,000. This means that the average cost per property should not exceed £10,000 when averaged across the housing stock being upgraded. Therefore, it is possible for a property to exceed £10,000 however other properties would need to receive less subsidy to average support to £10,000.

For example: If a LA receives £250,000 of LAD funding, they could spend £10,000 per property on 25 properties which would mean their average per home is £10,000. However, they could also support 25 homes but differ the amount spent on each home (including spending above £10,000 on some homes) as long as the total sum spent on those 25 homes does not exceed £250,000.

HUG phase 1

Due to the higher level of cost per home, averaging across the housing stock is not allowed under HUG. However, LAs may average costs on HUG for homes that fall within the same EPC band and starting fuel type.

8.4 Do the cost caps include VAT?

The cost caps include VAT where the VAT is unable to be reclaimed from HMRC by the LA.

8.5 Does the grant include VAT?

VAT is not included in the grant. For clarity, this means that BEIS and LAs will not pay VAT upon the transfer of grant funds and LAs should not claim grant funding for VAT that will be recovered by the LA.

8.6 Are LAs able to use LAD phase 3 funding for homes that have already received upgrades via LAD phase 1 or 2, or a Green Homes Grant Voucher?

Homes that received upgrades as part of LAD phase 1 or 2 or have had upgrades funded by a Green Homes Grant Voucher, are eligible to receive different measure upgrades under HUG phase 1 or LAD phase 3 as long as the property has a starting EPC rating of D or below and the household meets the income eligibility criteria.

8.7 Where a property has previously received funding through other government schemes, is there a maximum cumulative grant that applies to each household?

There is no maximum cumulative amount of funding that a household can receive. Homes that have been supported under LAD phase 1 or 2 can receive funded measures, subject to the eligibility criteria, under LAD phase 3 or HUG phase 1. As long as the property and household meet the eligibility requirements set out in the Sustainable Warmth competition guidance, the household can receive different measures through LAD phase 3 or HUG phase 1.

8.8 Will local authorities be able to combine other funding streams such as ECO4?

Funding that LAs receive from the Sustainable Warmth competition can be blended with other government schemes such as the Energy Company Obligation (ECO), Green Homes Grant Vouchers, or the Social Housing Decarbonisation Fund (SHDF), at property and project level but not for the same individual measure. For example, a contractor delivering support to a household may be funded through ECO4 to install solid wall insulation, then funded separately by HUG phase 1 to install a heat pump.

8.9 Will local authorities be able to combine Sustainable Warmth funding with the Renewable Heat Incentive (RHI)?

An exception to prohibiting the blending of funding for the same individual measure is the Renewable Heat Incentive (RHI). The Sustainable Warmth competition is grant funding from public funds, therefore, for the purposes of the Renewable Heat Incentive (RHI) any funding from the Sustainable Warmth competition for low carbon heating measures would be deducted from RHI’s payments as per the RHI rules on grant funding.

8.10 Can service/warranty costs of installs be included within the capital costs?

Warranties can be included in the capital cost of the measure. To provide maximum flexibility, we are not overly prescriptive on admin and capital spend but we have listed suggestions in the Sustainable Warmth guidance (section 2.1.6 Funding and Eligible Costs). Please consult your accounting officer for guidance.

8.11 Are properties that are not compliant with the Minimum Energy Efficiency Standard (MEES) Regulations eligible for funding?

Government funding should not be used to make properties compliant with existing regulations. We can only support landlords that are already compliant with MEES Regulations (whether that is because their property is EPC E or above, or because they have a registered exemption). The landlord can pay for work to make the property compliant if it is below an EPC E and not exempt but that does not count towards the HUG/LAD landlord contribution.

9. Administrative costs

9.1 What percentage of administrative and ancillary costs are allowed in LAD phase 3 and HUG phase 1? Does this include additional delivery staff costs?

LAs should use the admin and ancillary costs they set out in their application to BEIS.

LAs can use up to 15% of HUG phase 1 funding to fund administrative, delivery and ancillary works to support delivery to off-gas homes. Similarly, 15% of LAD phase 3 funding can be used for administrative, delivery and ancillary costs to support delivery to on-gas homes. Examples of administrative and ancillary costs are included in Section 2.1.6 of the Sustainable Warmth competition guidance.

9.2 Where should retrofit assessor and coordinator costs sit - within capital or admin/ancillary costs?

In the guidance (section 2.1.6) we have suggested that this could be either an admin or capital cost. This is to allow flexibility in costs to deliver the scheme most effectively.

9.3 If we use an external ‘full customer journey’ partner, then they will be including admin in their margin on the measures - can we still add our admin on top?

LAs should use the admin and ancillary costs they set out in their application to BEIS.

As set out in the guidance, admin and ancillary costs need to be below or equal to 15% of your overall grant. The admin calculation includes both admin spend by a partner and the LA.

9.4 Can local authorities spend their admin and ancillary budget costs before starting delivery?

We understand that some of the admin and ancillary costs (such as marketing) may need to be paid before capital spending for installing into homes.

10. Commercial and procurement

10.1 Are BEIS looking to procure a new central Dynamic Purchasing System (DPS) or framework agreement which we can call-off suppliers to facilitate the delivery of LAD phase 3 and HUG phase 1? If not, are there any key arrangements already out there in the UK that we can look to for help on procurement for this competition?

BEIS are not planning to procure any DPS or Framework agreements for use during the delivery window for LAD Phase 3 or HUG Phase 1. BEIS does not have full access or knowledge of local procurement opportunities available to LAs but would encourage LAs to look at their local supply chains and any national or regional frameworks or DPS that have been identified or procured by their regional Local Net Zero Hub on LAD Phase 2, which could be utilised for their delivery.

10.2 Is there a list of the potential partner installation organisations with contacts available?

We do not endorse any installation partner over any other as part of this scheme. We encourage LAs to compete their procurements where possible and to engage with the market to identify the extent of the capacity within the market and use compliant and appropriate procurement methods to award contracts to potential suppliers.

10.3 Can something be done to support and engage local supply chain engagement?

We encourage LAs to engage with local supply chains, and we very much support the use of Small & Medium Enterprises (SMEs) within the supply chain. BEIS has its own SME action plan.

We do not want to actively dictate the commercial models that LAs will use. In line with best commercial practice, the use of competition wherever possible and the use of commercial models which provide value for money is encouraged. We invite LAs to propose models which achieve this and contribute to national procurement objectives. For more information, see the recently published Public Procurement Notice PPN 05/21.

11. Definitions

11.1 What is the definition of ‘gross income’?

Gross income is total earnings before taxes, housing costs and other deductions. This includes income from all sources, including employment, benefits, etc.

11.2 How is Social Housing defined in Sustainable Warmth?

HUG phase 1 and LAD phase 3 have a 10% cap on social housing. Only registered social housing providers would count towards the 10% cap.

11.3 What is meant by shared ownership homes?

Shared ownership is where a proportion of the property is still owned by the scheme owner and rented by the leaseholder. These homes should be treated as rental properties and as such the scheme owner (the housing association) is responsible for contributing (at least one-third) to the upgrade of the property.

12. Other

12.1 Could you provide more detail regarding consortium applications and lead officer/deputies sharing responsibilities?

We will always manage the relationship with the lead authority. We are aware that lead authorities may administer the grant in various ways, and we do not specify an approach.

12.2 Are we able to do our own new preinstall EPC to get a more accurate result?

Yes. We expect that many LAs will want to undertake pre-install EPCs to verify the home energy efficiency rating, continue to build up knowledge of the housing stock and undertake a full Reduced data Standard Assessment Procedure (RdSAP) assessment with recommended measures.

As part of PAS 2035:2019 a preinstall assessment is required to be conducted by a retrofit assessor to recommend appropriate measures for the home. The process will also use an RdSAP assessment that will be used to provide baseline energy cost and carbon emissions information about the property, which will enable calculation on notional bill savings and carbon abatement following installation.

12.3 Why does BEIS focus so heavily on using EPC banding for eligibility criteria?

At present, EPC ratings are the most universally used measurement for energy efficiency ratings in domestic dwellings. PAS 2035 recommends Reduced data Standard Assessment Procedure (RdSAP) assessments pre-install. Therefore, if you think an EPC rating on file is incorrect you can reassess ahead of installation.

12.4 Are Heat Pumps expensive to run?

The heat and buildings strategy prioritises the decarbonisation of off-gas grid homes prior to on-gas grid homes. However, an EPC C-rated home with a gas boiler is generally considered to be suitable for a heat pump in terms of the impact on bills for the resident. This is because the efficiency of a heat pump depends on how well insulated a property is; bills wouldn’t increase for residents in all cases where a gas boiler is replaced with a heat pump.