ECO Collapses Into The Gap Between Rhetoric And Reality
What Domna’s Anna Moore Thinks Now
For more than a decade, ECO has been the quiet workhorse of UK fuel poverty policy. It has insulated the homes the public never sees and has kept hundreds of small firms alive. It has also done something no other scheme has come close to. It has delivered. But headlines of failure have done for it - this time.
Almost without warning, it is being shut down.
The Budget announcement confirmed that the Energy Company Obligation will end in March 2026. Buried among the Treasury paperwork, the change was framed as a saving for households. The maths does not support that claim. Removing a £1.3 billion levy spread across 27 million households equates to around £48 per home. The Government briefed £150. Experts dispute that. The more pressing question is who loses.
The answer is simple. The poorest households lose, and the retrofit industry loses with them.
A £6.5 billion cut that hits right where Britain is most exposed
ECO4 has been delivering around 5,000 upgrades a month. It has been one of the few schemes that reliably reaches households below £31,000 in income, private renters living with mould, owner occupiers facing damp, disabled residents trapped with dangerous heating systems and families who routinely choose between heating and eating.
The Budget decision removes £6.5 billion of projected investment over this Parliament. It also strips out roughly 10,000 jobs, the equivalent of closing a major car plant. The scheme is funded by energy companies, not the taxpayer. That point has been lost in much of the political presentation.
The removal of ECO benefits the richest households who barely notice the levy. It directly harms the poorest who rely on it. It creates a vacuum in a market that has only recently stabilised after the failures of LAD and the abrupt closure of the Green Homes Grant.
And crucially, it breaks a fragile chain of installers, coordinators, surveyors and SMEs that cannot simply be turned back on later.
Anna Moore has been warning about the gap for months
I've interviewed Anna Moore three times in 12 months. In her UKREiiF visit in May - we talked about the Warm Homes Plan, she was measured. She made the point that the UK needed to modernise delivery and simplify the mess of overlapping acronyms. She talked about the importance of stitching data, design and delivery together. She also warned about the sector’s tendency to “swing from feast to famine and back again”.
Her position then was broadly optimistic. She believed the Warm Homes Plan could work if it was launched with capacity in mind. Her concern was the gap between ECO ending and the Warm Homes Plan beginning.
That gap is now real. And abrupt.
Her tone in response to yesterday’s decision is markedly sharper. The urgency has increased because the risk is no longer theoretical.
Here are her comments in full.
“It makes sense to streamline grants and increase oversight. The Warm Homes Plan is a welcome initiative. However, suddenly yanking £1.3 billion in funding is chaotic, and has created a cliff edge for thousands of low-income households in fuel poverty as well as SMEs employing some 10,000 people. With fuel poverty growing and business under pressure, it beggars belief that a successful scheme funnelling utility firm funding to the poorest households in society should be brutally cut. And for what? To create a few short-term headlines around cutting Net Zero levies.”
And this made us wonder - has political expedience and the need to have the public feel supported (after some, not all installs failed) - driven a policy that still delivered some success in the maws of a lion in the gladiator pit of headlines?
“This fundamentally goes against Labour’s stated values of wanting to help the poor and to fight climate change. This is not the moment to pull up the ladder. Bridging ECO to the Warm Homes Plan is essential if we are to protect residents, protect jobs and protect progress. Right now, we risk losing the installers, coordinators and surveyors. Those SMEs have built up capability over a decade, and their expertise is critically needed. Companies cannot simply be switched back on later like a light switch and the ramifications of this could massively undermine our wider battles to fight climate change and upgrade our ageing housing stock.”
She told us that we needed at least a measured withdrawal rather than a sprint from the front line in a retreat about as brave as a Steve Witkoff negotiation.
“We need clarity and continuity. Extending ECO by one year allows an orderly transition while the Warm Homes Plan is finalised, piloted and mobilised. Without that extension, the sector falls off a cliff in March 2026 and we will be rebuilding capacity from scratch at exactly the moment the government needs to accelerate delivery.”
Moore is also preparing to write to Energy Secretary Ed Miliband requesting that funding for the poorest households be ring fenced and that the Government maintain private sector delivery capacity rather than rely wholly on slow, risk averse public procurement.
Installers are already seeing the ground shift under them
To test how this decision lands outside London, take two of the SMEs interviewed by Domna.
Joel Pearson, director at Net Zero Renewables in Newcastle, said:
“We employ and subcontract over 35 skilled individuals, and have helped take more than 200 homes out of fuel poverty through the ECO scheme. I would urge Rachel Reeves to think again and to at least extend this existing scheme by a year so we can see an orderly transition and support firms like ours helping to mitigate climate change.”
Lee Rix, Managing Director at Eco Approach in Preston, said:
“Each year our 150 plus staff and supply chain use ECO4 funding to make cold, inefficient homes safer and more affordable for thousands of families in fuel poverty. With no transition plan, ending ECO4 risks leaving those families abandoned and undermining the workforce that supports them. We urgently need clarity on a successor scheme.”
In every conversation I’ve had with installers this week, the story is the same. Uncertainty kills pipelines. Uncertainty stops investment. And uncertainty is the single biggest risk to scaling the retrofit sector.
This is not about schemes. It is about sequencing
ECO is a private sector mechanism that delivers quickly because it is not pinned to local authority procurement cycles or the rhythms of a stretched civil service. The Warm Homes Plan will rely on those structures. They have their place, but the hockey stick ramp-up remains real.
In my earlier interview, Moore summed it up neatly. “You cannot build a retrofit revolution on stop-start funding.” Today’s decision makes that warning concrete.
And when we met an optimistic Moore in London at the start of 2025 - the contrast was even more stark - then she had spoken about the potential, the hope and need to work through problems not ignore the fact that "Thousands of homes only need simple fixes to lift from EPC D to EPC C."
The Government’s plan may still work. There is logic in consolidating schemes. There is logic in removing levies from bills if the taxpayer fills the gap. There is logic in building a more accountable, data-driven system.
But logic does not override timing.
Right now the UK is removing the biggest fuel poverty programme before the replacement exists. That is not sequencing. That is a collision of administrative optimism with operational reality.
What happens next?
Domna is calling for a twelve month extension to ECO. Not indefinite. Not open ended. Just enough time to bridge the gap.
They want a ring fenced pot for the poorest households. They want the Government to maintain the ability of managing agents and delivery partners to allocate funding efficiently. They want the Warm Homes Plan to be piloted before it becomes the entire system.
Those asks are not ideological. They are practical. They are rooted in lived delivery experience across thousands of homes a year.
A single year is not much. But without it, the UK will lose capacity at exactly the moment it needs to accelerate.
The bigger question
In her previous interview, Moore told me something that stands out now. “Britain is trying to retrofit its way out of a crisis with a sector that has never been stable for more than eighteen months at a time.”
The closure of ECO without a functioning successor may prove that point.
For now, the industry waits. The poorest households wait. The installers wait. And Labour must decide whether the saving is worth the collapse.