Nesta warns against devolving Boiler Upgrade Scheme
UK – Nesta has warned the UK government against devolving the Boiler Upgrade Scheme, arguing that the national heat pump grant should remain centrally administered as greater control over the wider Warm Homes Plan is handed to mayors and local authorities.
The research and innovation foundation, which works on issues including reducing household carbon emissions, supports greater local control over the £15bn Warm Homes Plan. However, it says devolving the Boiler Upgrade Scheme could create funding imbalances between regions, increase complexity for installers and make the customer journey more difficult.
The government has allocated around £2.7bn to the scheme through to 2029/30, with annual funding due to rise from £400m in 2026/27 to £709m in 2029/30.
Concerns over regional funding
Nesta said local authorities are well placed to deliver area-based retrofit programmes because they understand local housing stock, fuel poverty and supply chains.
However, it argues that dividing Boiler Upgrade Scheme funding geographically would be harder to manage because heat pump demand varies between regions and from year to year.
Some areas could underspend while others run out of funding, potentially creating uncertainty for installers and customers.
The Boiler Upgrade Scheme should be seen as a core part of this national spine
Andrew Sissons, director of Nesta’s sustainable future mission
Installer complexity
Locally administered versions of the scheme could leave installers dealing with different eligibility rules and application processes depending on where projects are located.
The current national, demand-led model instead allows funding to follow demand rather than being allocated geographically in advance.
Nesta also pointed to Scotland’s Home Energy Scotland Grant and Loan scheme, arguing that its more complex customer journey may have contributed to lower heat pump uptake compared with BUS on a population-adjusted basis.
National scheme with local flexibility
Rather than devolving the scheme itself, Nesta wants local authorities to have greater flexibility to use it within area-based projects.
It has proposed allowing councils and strategic authorities to aggregate grant applications across multiple properties, including networked ground source heat pump projects.
Under the proposal, BUS would remain a national programme while becoming easier to combine with locally delivered Warm Homes Plan projects.
The Boiler Upgrade Scheme currently provides £7,500 towards eligible air-to-water and ground-source heat pumps, including water-source systems and shared ground loops, and £2,500 towards air-to-air heat pumps. A £5,000 grant is also available for biomass boilers in limited circumstances. Until 31 March 2027, eligible off-gas-grid properties replacing oil or LPG heating can receive £9,000 towards an air-to-water or ground-source heat pump. The scheme applies in England and Wales.
