National Grid and Community Interest Company, Affordable Warmth Solution (AWS) have established a £150m Warm Homes Fund (WHF) designed to support local authorities, registered social landlords and other organisations working in partnership with them, to address some of the issues affecting fuel poor households.


Around 4 million UK households are in fuel poverty, unable to heat their home to the temperature needed to stay warm and healthy. As well as being on low incomes many of these households are also faced with the additional burden of relying on heating systems that are expensive to run and/or inadequate for their needs. Furthermore, because of their circumstances or property type they may not currently be able to benefit from existing mandated schemes.

In 2014 the UK Government introduced a statutory target to ensure fuel poor homes in England achieve a minimum energy efficiency rating of Band C by 31 December 2030, with targets in Scotland and Wales also set by the Scottish Parliament and Welsh Assembly respectively. NEA’s Annual Fuel Poverty Monitor reports that without additional investment and ambition these targets may not be realised.

The Fund

The WHF is a £150million fund administered by AWS across England, Wales and Scotland, primarily designed to address some of these issues by incentivising the installation of affordable heating solutions in fuel poor households who do not use mains gas as their primary heating fuel. It is envisaged that the fund will be used to supplement local strategic plans and other funds available.

The fund is split into three broad categories:

  • Category 1: Urban homes and communities – we anticipate this will involve new gas heating systems which provide space heating and domestic hot water. It could also include heat network solutions. Under this category new gas connections will continue to be undertaken by Gas Distribution Networks and funded through the Fuel Poor Network Extension Scheme. The WHF is therefore targeting the ‘in-house’ systems.
  • Category 2: Rural homes and communities – some of the most severely fuel poor households are those without a mains gas connection in rural locations. This category will therefore primarily focus on ‘non-gas’ solutions which may include air source heat pumps, oil and LPG.
  • Category 3: Specific energy efficient/health related solutions – this may involve national or regional programmes which bring together relevant organisations and charities to promote energy efficiency and/or health related programmes in relation to fuel poverty. This is not intended to fund new central heating systems.

To maximise the impact of the WHF, all properties are expected to be insulated to the recommended industry standards and bidders and their partners are encouraged to seek additional funding to ensure these standards are met. The aims of the fund are to reduce bills, increase comfort in non-gas fuel poor households, and improve health outcomes for some of the most severe levels of fuel poverty.

Bid Process

Further information about the bid process and the requirements for a successful bid can be found within the relevant tabs on this website.

Warm Homes Fund Facts
Over £100m committed to date to deliver first time central heating & related solutions to fuel poor households

Our fund has generated an additional £106m for investment in fuel poor homes. We anticipate this will grow to some £200m by the end, making a total investment of £350m

4,000 installations already completed with more than 40,000 households expected to benefit from the fund

Over 100 Local Authorities and Registered Social Landlords currently contracted to deliver 150+ projects

Further bidding rounds scheduled for September 2019. All installations to be complete by end 2021

Voluntary contribution of £150m to address the challenges people face living in cold, damp and energy inefficient homes


Your Questions Answered

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  • Updates Feb 2019
  • Bidding Process
  • Eligible Properties
  • Eligible Technologies
  • Commercial Arrangements

Can we use WHF money to replace electric underfloor heating with an eligible WHF technology?

Yes, this would be eligible under the current scheme rules

What happens if our costs are less than planned and the amount of WHF funding reimbursed on the cost per measure basis exceeds the amount required to fully fund the project?

In accordance with the contract terms your own funds should be used in the first instance with WHF monies used as a ‘top up’ to enable you to complete the installations. If you have delivered your project and there are surplus funds available, our preference is that you deliver an agreed number of additional central heating systems to utilise those funds. If properties cannot be identified into which additional first time central heating systems can be installed, WHF will seek reimbursement of the surplus from the Recipient.

Will WHF fund hybrid systems e.g. LPG and ASHP hybrid installations?

While not discounting this for category 2 projects we would need to be satisfied as to the rationale for using hybrid systems and the justification for the additional costs involved. We would certainly expect additional contributions from the bidder/other sources in order to offset some of those increased costs.

With the removal of ECO funding, will WHF still consider oil installations as part of a category 2 project?

Notwithstanding the changes in ECO funding, we still see oil as a potential solution to addressing fuel poverty in rural areas. As such, we have been in discussions with a number of stakeholders (including BEIS) regarding the funding of oil central heating measures alongside a carbon offsetting arrangement. This would enable us to ring fence some funds for oil solutions particularly for private households but also for social housing where a 50% contribution is provided by the landlord. The eligibility criteria may also differ from the normal WHF rules in relation to a maximum income threshold. Those discussions are continuing and we will make further announcements if and when a scheme is agreed. In the meantime we recommend that you continue to submit proposals which include oil as a solution albeit we may defer a decision on that element of your proposal pending the outcome of the discussions outlined.

Who can apply? Are joint bids acceptable?

Local Authorities (LAs) and Registered Social Landlords (RSLs) are able to directly apply to the WHF. Other commercial organisations such as community groups, charities and private landlords would need to be part of a bid from a LA or RSL. Joint bids from LAs and RSLs, supported by their partners, are encouraged where there is a clear benefit from doing so e.g. to share a project management team, to benefit from economies of scale in procurement or to encourage wider learning. One party will need to be designated as the lead and will be responsible for completing the application form. The funding will be paid directly to the lead name on the bid.

Can I apply for funds in more than one category?

Yes, you can apply for more than one category, indeed this is encouraged. There is a separate application form for each category and you should ensure that there is sufficient information provided about each individual scheme.

If an organisation was successful in an earlier round, are they precluded from bidding in later rounds?

No, the bids in each round are considered separately so the fact that you were successful in one round does not mean that you will be denied funds in a subsequent bidding round but neither does it guarantee success as the quality and quantity of bids may vary from one round to another.

You have said that you are looking for ambitious category 3 bids. What are you looking for in this area?

We want to encourage innovative solutions which will really make a difference in connecting people to resources whether that be for advice or support. We encourage collaboration across neighbouring areas and we want to see schemes which have the potential to grow and be sustainable beyond the life of the WHF.

Can you clarify what is eligible within the ‘emergency fund’ and what proportion of funds might be available for this?

The emergency fund is principally intended for boiler repairs and replacements, for example to facilitate vulnerable people leaving hospital and being able to go back to their own home. Anything not eligible for funding under ECO e.g. tank lagging, draught proofing would not be eligible for use as part of the emergency fund. We expect the emergency fund to represent only a small part of the amount requested from WHF.

Are we able to submit appendices in support of our application?

It is important that the majority of information is provided within the application form. Appendices can be used if necessary to provide additional detail, but you should ensure that any key points are included within the standard application form template. In the guidance at paragraph 1.5.1 (page 8) we have also requested that, where 3rd party funding has been identified, evidence is provided that it is in place e.g. letter of support from funding partner. The application form has a section that will allow attachments to be referenced and embedded within the document.

Can existing staff and infrastructure costs (e.g. call centre costs) be included within matched funding as ‘contributions in kind’?

In developing your application it is important that you capture all costs and sources of funding within Section D of the application form. The element of the staff and infrastructure costs that relate to your bid should therefore be captured within the total project costs. The funding of these costs could then be included within bidders own funds (if it relates to direct costs incurred by the bidder) or in ‘other funds’ as staff resources in kind (if it relates to costs payable by a 3rd party).

I want to propose a scheme which will not deliver central heating but which will deliver innovative energy efficiency measures. How do I do this?

If you are not delivering central heating measures this type of proposal would need to form part of a category 3 bid. Within the analysis of project costs and funding in Section D of the application you would need to include the funding sought from WHF for measures within the column titled ‘other’ and explain what the funding is for in the box below. Supporting independent evidence needs to be provided that will enable the WHF team to accurately evaluate your proposal for cost effectiveness.

Is there a defined allocation of funds available between the three categories i.e. urban, rural and referral networks?

At this point we are interested in receiving bids in relation to all three categories and we have not set specific targets for each. Allocations in round one were £21.2M in category 1, £8.6M in category 2 and £1.1M in category 3. We would like to encourage bids in categories 2 and 3 but awards are entirely dependent on the quality of the proposals.

Is there a defined allocation of funds between England, Scotland and Wales

We have an allocation in mind based on the respective populations of each country and additional support available via Government schemes. This is principally intended as a guide however, and we would not want to reject a strong bid from one country in favour of a weaker bid from another. In round 1 the allocations were 81%/ 8%/11%.

Can you provide more clarity regarding your expectations of VAT rates and what you will and will not fund

VAT legislation is complex and the application of the standard or the reduced rate of VAT to the supply of both materials and cost of services in relation to the installation of materials for a central heating system and/or other energy saving measures, varies depending on what is being supplied, to whom it is being supplied, where it is being supplied and under what circumstances e.g. grant funded.

Furthermore, whether any VAT incurred by an organisation (Local Authority (LA) or Registered Social Landlord (RSL)) in relation to the installation costs for a central heating system installation or energy saving measures can be recovered will depend on the VAT status of any particular organisation.

The VAT rates to be applied to goods and services to be provided as part of home energy projects are determined by HMRC. Whether VAT incurred by an organisation in such a project can be recovered from HMRC, would again be determined by HMRC.

AWS and the WHF team cannot (and do not hold themselves out to be able to), provide any guidance to bidders on either the VAT rates that would be applicable to goods and services to be provided as part of a home energy project; or the recoverability (from HMRC) of any such VAT cost incurred. In all instances, any queries by bidders should be addressed to their local HMRC VAT officers. The VAT helpline number is 0300 200 3700.

As set out in our guidance document all costs included in the funding application should be stated net of VAT. Where VAT is irrecoverable from HMRC and the bidder wishes to recover the cost from WHF funds, this amount should be captured separately within the application. In relation to funds requested from WHF, at our sole discretion, we will decide whether the bidder is entitled to recover such costs through the Fund. These circumstances will be limited to successful Local Authority bidders who are funding the installation of central heating and other qualifying measures to private homes.

Where funding is requested by a Local Authority to meet costs associated with the installation of measures in private households we require the irrecoverable VAT to be disclosed separately.

Is VAT to be applied to Quarterly Funding Instalment Payment Requests?

In the event that a bidder is successful and enters into a Recipient Agreement with AWS, the agreement makes it clear that there is no VAT chargeable on the amount of any Funding Instalment.

Are there any restrictions on the tenure of homes which can be included?

The critical requirement is that households are in or at risk of fuel poverty. There is therefore no restriction on the type of tenure. We are particularly interested in proposals which target homes in the private sector (including private rented).

If a householder meets the WHF eligibility criteria, will they be guaranteed to receive a free gas connection under the FPNES?

In developing the eligibility criteria for the WHF we have aligned it closely with the FPNES. That said, there may be circumstances in which the WHF criteria are more flexible (e.g. in relation to top 25% IMD) therefore it is important that you engage with the relevant Gas Distribution Network at the earliest opportunity to determine eligibility for gas connections under the FPNES.

Do we need to validate the eligibility of all households to receive central heating measures or would it be satisfactory to confirm eligibility for the majority of households within a scheme?

In order to receive central heating measures the eligibility of each individual household would need to be confirmed against the WHF criteria. You may be able to obtain funding for the infrastructure costs (e.g. for a district heating scheme) if you can demonstrate that the majority of households are eligible. In the case of gas connections early engagement with the appropriate GDN is recommended to determine eligibility and any associated costs.

Are park homes included?

Yes, any household which is in, or at risk of, fuel poverty, has no central heating and/or is non-gas, can be included in a bid. The home must, however, be permanently resided in for 12 months of the year. If a gas connection is required, you should evidence that you have engaged with the relevant Gas Distribution Network or their partner organisations. We would expect an assessment of how long the new heating system would be in place i.e. when is the home being replaced?

Can households with partial heating systems (where only some of the rooms are on the heating system) be included in the bid?

Yes, this is possible but only for existing coal fired systems.

Can we install secondary energy efficiency measures without installing a central heating system?

No, the primary aim of the fund is to install first time central heating systems. Secondary measures can be considered provided other sources of funding have also been researched but homes would need to have a new central heating system installed before the additional measures could be considered eligible.

Secondary measures may make our bid look expensive when compared against others. Would that mean that our whole scheme would be rejected?

We have said in our guidance that we encourage whole house solutions and that we encourage the use of funds from other sources to supplement the monies available through the WHF.

If your scheme looks prohibitively expensive we may agree to the funding of the central heating measures alone rather than rejecting the full bid.

Your guidance states that “all properties are expected to be insulated in line with the pre-install EPC”. In some cases, particularly where homes are of solid wall construction, some insulation measures may not be viable. What are your expectations?

We would expect that you would include within your application details of the insulation measures being installed and the funding provided. If ECO funding is available, it would suggest that industry standards are being followed both in terms of the type of insulation measures and the installation quality requirements. Where measures may not be considered economically viable e.g. industry standards might suggest something like external wall insulation, but it may not be feasible from a cost perspective, this should be documented in your proposal and evidenced in any future Funding Use Report.

The guidance states for category one – urban homes and communities – you anticipate that this will involve new gas heating systems. Does that imply that non-gas solutions will not be considered?

We would expect gas solutions to be the first option considered. Thereafter, if it is un-economic to get a new gas connection based on your discussions with the appropriate gas distribution network operator, we would look at alternative solutions.

Could we present a bid to extend a district heating scheme to a new high rise block where homes are currently heated by electric storage heaters, without a central heating system, in a dwelling off the gas grid?

Yes, in principle this would be an eligible scheme. For cost comparison purposes you should submit this as a separate bid. It would not preclude you from submitting another bid in the same category for individual heating systems.

Are we able to install new heating systems in replacement of old warm air systems?

Individual homes will be considered on a case by case basis. Communal systems powered by a gas heat source would not be eligible.

We are unable to obtain outstanding post install EPCs due to the Covid-19 crisis. What is your guidance around this?

The decision tree below combines both our existing guidelines and some additional flexibility arising from Covid-19 to set out how we will deal with missing EPCs.  The guidance seeks to distinguish between process issues which are the Recipient’s responsibility to address and specific Covid-19 related delays.


Can the payment terms be negotiated as payment quarterly in arrears presents some challenges for us?

We would encourage bidders to factor this into their cashflow requirements in conjunction with other sources of funding being accessed. It is important that your finance teams understand the commercial arrangements at the time you submit your bid and that the most advantageous payment terms are negotiated with suppliers.

What happens if a scheme includes a mix of measures? How is the average cost/measure for payments derived? What would happen if a bidder installs the expensive solutions in the mix first?

All funding payments will be made at the same average cost/measure over the entirety of the planned scheme for ease of administration. This needs to be considered by bidders in the plans submitted for the schemes. The type of measures that you actually deliver will need to be broadly consistent with your application and planned installations.

We are not able to work with the Recipient Agreement, how do we negotiate changes?

The Recipient Agreement represents the terms and conditions for managing awards under the fund and we will not enter into negotiations regarding those terms.

You require EPC certificates both pre and post measures. What if an EPC rating is already in place for the property?

You will need a pre and post measures assessment and one of those can be a desktop calculated report. We expect the initial EPC to reflect what is in the house immediately prior to installation and if an EPC has been lodged within the last five years and nothing has changed, this can be used.

How long do we need to keep information relating to the households and properties who receive assistance under the scheme?

We may exercise our rights to audit at any point during your project so information should be retained at least until the project closure report has been approved by ourselves and outstanding liabilities settled. Beyond that you should ensure that all information relating to the project is held for a period consistent with your organisation’s data retention requirements.