ECO3 Consultation - AgilityEco briefing for Local Authorities & Social Housing providers

On 30th March 2018, the government finally issued its long awaited consultation on the future of ECO3. Here are some highlights of the key areas that we think have implications for local authority and social housing partners. Responses are required by 29th April 2018. We strongly advise all our supply chain, local authority and social housing partners to respond to this important consultation.

1. The next phase of ECO will run for 3.5 years from October ’18 to March ’22. This should lead to a long period of relative stability in the support mechanism, which is very welcome. This is alongside a 3-year phase of Warm Home Discount. This will enable a more long-term, planned approach to the local community schemes we provide in partnership with with many of you.

2. All of ECO will now be focused onto most vulnerable “Affordable Warmth” (“HHCRO”) sector, with the complete removal of the able-to-pay mechanism (“CERO”).

3. An increase in the Flexible Eligibility cap (“LA Flex”) from 10% to 25% of the scheme is proposed. Under LA Flex, local authorities can declare that certain households, not in receipt of qualifying benefits, are deserving of ECO support due to their being in Fuel Poverty (FP) or on a Low Income and Vulnerable to the Cold (LIVC). This will enable LA’s to increase the numbers of vulnerable households that are supported by ECO measures and ensure nobody falls through the net, particularly in combination with outreach schemes such as our LEAP service.

4. Together we witness a high need for support with heating measures amongst the most vulnerable. It is proposed that several categories of fuel poor households can be supported with heating measures via ECO:

a) Those in private housing with broken boilers (capped at 35,000 broken boilers per annum).

b) Those in private housing with inefficient boilers, where this is combined with an insulation measures such as a loft top-up, in private housing. This is outside the 35,000 cap and not subject to a cap.

c) First-time central heating (including replacement of storage heating) in private and social housing. We are co-operating with many of you on part-funding for such measures via the Warm Homes Fund, and ECO funding via this route is the key source of “matched funding”. This is again outside the 35,000 cap and is not subject to a cap.

5. There continues to be support for communal and district heating, but only in E, F and G rated dwellings, or those meeting the the LA FLex infill criteria, which will make many existing schemes ineligible.

6. There continues to be support for solid wall insulation, but with a “SWI Minimum” of 17,000 dwellings per annum compared to 21,000 at present.

7. There will be support for innovation measures, capped at 10% to 20% of the overall obligation. Support will be via demonstration schemes, uplifts to ECO scores or in-situ performance measurement. This should lead to opportunities for local authorities and social housing providers to partner with equipment manufacturers and AgilityEco on innovative technologies such as smart heating controls and advanced insulation products.

A more detailed note on the proposed changes, combined with some initial thoughts from us on implications, can be found here.