Applying For The Social Housing Decarbonisation Fund Wave 2.1

Executive summary for wave 2.1

As committed in the 2019 Conservative Manifesto, the government has pledged to provide £3.8bn for the Social Housing Decarbonisation Fund (SHDF) over a 10-year period. This was to improve the low energy performance of social housing, in line with the government Net Zero 2050 goal. The SHDF aims to provide warm, energy-efficient homes that reduce carbon emissions and energy bills, helping to tackle fuel poverty and support green jobs in the community.

The Department for Business, Energy & Industrial Strategy (BEIS) is running the SHDF to support the Prime Minister’s 10 point plan for a green industrial revolution by investing money into increasing the energy performance of homes across the UK.

In line with the Net Zero 2050 goal, the government has committed £800m to the Social Housing Decarbonisation Fund as part of the 2021 Spending Review settlement. The wave 2.1 competition will allocate as much of this funding as possible to support the installation of energy efficiency and performance measures in social housing across England.

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What's the difference between Wave 1 and Wave 2.1?

SHDF Wave 1, which awarded approximately £179m of funding to social housing energy efficiency projects, due to be delivered between 2022 and 2023, focused solely on providing local authorities with funds.

The Social Housing Decarbonisation Fund Wave 2.1 centres around providing funding for local authorities, social housing providers, combined authorities, and registered providers. This includes housing associations and Arms-Length Management Organisations, otherwise known as ALMOs, that are registered social housing providers. 

There will also be a longer delivery window. Where Wave 1 will be delivered from 2022 to 2023, Wave 2.1 must be spent by 31st March 2025.

Wave 2.1 is co-funded, meaning applicants will receive grants that cover 50% of total eligible costs. This figure must be provided by the applicant when applying for the SHDF Wave 2.1 competition.

In order to qualify for the Social Housing Decarbonisation Fund Wave 2.1, applicants must have more than 100 properties, and a majority of them are required to have an EPC rating lower than C.

To support you throughout your SHDF application, this guide includes everything you will need to know, such as: 

• How the application process works
• Tips for applying to SHDF Wave 2.1
• Eligibility and bid size
• SHDF application checklist
• Key dates
• Funding and delivery FAQs
• Creating your SHDF Wave 2.1 application
  
  

How does the Social Housing Decarbonisation Fund application process work?

Although the second wave of the SHDF can help thousands of properties across the UK minimise their carbon footprint, applicants have to prove their properties are eligible, and offer a compelling reason why the project should be funded.

This is supported by providing the government with detailed information and data on your:

• Property portfolio.
• Proposed work.
• Contractor information and their credentials.

The key to a successful SHDF application is maintaining and showing evidence of detailed data across your property portfolio. This can be done by assessing and analysing:

• The risk of delivering appropriate energy efficient projects, such as providing external wall insulation. What would this project entail? How much is it likely to cost? Will there be any further works that are needed to be done to complete this decarbonisation retrofit (such as new, appropriate window frames)?
  
  
• Current property data. With the information you already have, such as EPC ratings, or average cost of bills per year at that property, assess what efforts can be made to minimise the carbon footprint and cost per annum.
  
  
• Properties where data is missing. The right documentation is essential for your eligibility. Required information includes repair records, demographics and income data of residents, and stock condition. Without adequate information, applications run the risk of not meeting requirements.
  
  
• Stock analysis. By displaying an in-depth understanding of your properties, you increase the chance of a successful application. It’s best to know the following:
  
  
  • Stock condition and EPC data
  • Resident feedback on property, through complaints, turnover rates, and other mediums
  • Asset renewals and repair records
  • Complaints and HHSRS requirements
  • Planned maintenance opportunities and budgets
  • Data on residents, e.g. income and demographics
    

To have the best chance at a successful Social Housing Decarbonisation Fund Wave 2.1 application, it’s essential that you are highly engaged with your local authority and planning office.

Early engagement with the supply chain is vital to ensuring your application is successful, you’ll need to provide the details of your contractors. You will need to provide contact details and business information, as well as their:

• Procurement status, proving their ability to charge for their services or pay for goods.
  
  
• TrustMark registration. All installers are required to be TrustMark Registered or equivalent. This means that your contractor provides government endorsed quality work.

It may be beneficial to provide other information from your contractor, including their appropriate certifications, estimated cost of work, time it may take to complete, and any issues they can identify throughout the retrofit. Your budget should include a buffer for any other potential issues, or any extra manual labour hours that could be required. 

When  submitting your proposed plan for each property, it’s vital you ensure they meet the following three standards:

1. The proposed work will align with Net Zero, Your proposed plan must illustrate the work needed to reach EPC band C, minimising heat lost from the property.
   
   
2. The projects are compliant with PAS 2035:2019, or “retrofitting dwellings for improved energy efficiency specification and guidance”.
   
   
3. You’ve conducted a proper risk assessment. Although you will have given a detailed description of the work that needs to be done in order to make each property more energy efficient, a proper risk assessment needs to be provided. This is to make sure the work will not cause any substantial accident, damage or severe disruption to anyone on or near your social housing. Safety and quality of the work is even more crucial in buildings that are considered safety critical.

To ensure your data is in order, working with a third party is advised. They will help you understand how carbon-neutral each of your properties are, and assist you in gathering all of this complex information at short notice. Due to the tight application window, if you do not have access to detailed information, such as EPC ratings and supply chain information, of each of your properties, this will decrease your chances of securing funding.

Streamline the process and submit your application by November 2022. Get in touch with our in-house experts, who will gather your data and ensure you have the best chance of securing government funding

Tips for applying

For each property within your portfolio, you need to ensure that you are making the right decisions for each property and tenant. When building your application, it’s important to take into consideration the following:

Current EPC level

Each SHDF bid requires at least 100 properties with an EPC rating under band C. 

Some properties that are in EPC band C will be eligible if they are in an existing block of flats or terrace properties, where the surrounding houses will be retrofitted. There should only be a few of these properties per bid, however, as the government want to maximise the amount of properties that can raise their carbon monoxide levels.

The amount of properties

Each Social Housing Decarbonisation Fund bid requires at least 100 eligible properties. However, if you have less than 100 properties that need support, this does not mean you cannot apply.

The government is accepting bids from consortiums; multiple organisations that are grouped together with properties lower than EPC band C. 

If you’re looking to join a consortium, you must find other organisations, or work with an external agency, such as a third party organisation, such as a property compliance consultant, who will find one on your behalf.

Notify your tenants

When planning work that needs to be completed in each of your properties, it’s important to notify your tenants. They are likely to have valuable insights into what can be done to improve each property’s EPC rating, or point out areas of concern.

The Department for Business, Energy and Industrial Strategy (BEIS) expects tenant engagement to go beyond leafleting and cold calling. 

For each tenanted property, it is recommended you inform each occupant that you’re applying for SHDF Wave 2.1 and explain the work which may be carried out on the property in order to raise the EPC rating. Clearly inform them of how long this is approximated to last, and the disruption they may expect for the duration. 

You may also wish to provide them with information on:

• How this will improve the heating of their property
  
  
• COVID-19 measures your installers will take, especially with vulnerable tenants
  
  
• The support you will provide during the retrofit and occupancy to maximise the benefits they will receive in line with the higher EPC rating band (e.g. ensuring all windows are closed while heating is on).

If your tenant does not agree to the proposal, you may not be able to retrofit that property, or carry out all of the work you intended. 

Potential planning issues

Before you apply, you need to mitigate any potential risks before they arise. Depending on the work involved, this can include:

• Health and safety - like working at height or installing electrical systems.
• Unexpected work that may need to be carried out.
• Unexpected injuries that may occur while on site.

To prepare for any potential unexpected risks, bids must include a buffer in both funding offer, and timescale for work proposed. It’s important to communicate with local authorities during the early stages of your application for constraints regarding listed buildings, conservation areas and other spaces or properties that may slow the development process.

Key performance indicators

Key performance indicators play an integral role when creating a proposition - and they can be contextualised by being measured against the client’s intended outcomes, and strategic objectives.

These should be in place to measure your project progress after the grant is awarded, and that you are delivering, reporting, and monitoring the success of your retrofits back to the The Department for Business, Energy and Industrial Strategy (BEIS). 

Due to the funding period, it may be difficult to include firm completion dates, depending on the size of your bid and any potential contingencies. To mitigate this, a KPI could be to have 25% of homes retrofitted within three months of being awarded funding.

Want support with your application process? Our experts can help gather data, contact tenants, and help you join a consortium in time for the November 2022 deadline

Bid Size

To maximise the chances of a successful Social Housing Decarbonisation Fund application, you need to ensure your bid contains:

• Social housing only. Non-social housing, such as privately rented properties, will not be considered for application
  
  
• At least 100 properties between EPC D-G, from individual organisations, or consortiums

It’s important to note that there is no maximum number of properties that can be included in a single bid, and there’s no threshold for funding. All proposed work needs to improve the EPC rating and comfort of its tenants.

The size of your bid should factor contingency plans into your project. This should cover both funds and eligible homes, including homes that may have been retrofitted and undocumented, or work refused by tenants. This is to ensure you meet the minimum criteria.

For example, if your bid is proposing to refit exactly 100 properties, and five properties are ineligible for a retrofit, and four tenants reject work being carried out on their property, funding may be rejected.

Social Housing Decarbonisation Fund application checklist

To ensure you have everything you need for a successful bid, here's an application checklist to make sure you have all the right information and approval on the following areas:

• Organisation
• Internal
• Key stakeholders onboarded
• List of eligible properties
• Consortium (if applicable)
• Key stakeholders onboarded
• Main Applicant information
• List of your eligible properties sent to Main Applicant 

• Social housing
• Tenant contacted 
• List of eligible properties
• At least one hundred
• EPC rating of D-G
• Up to date EPCs
• All property data
  
  
• Proposed work
• Accurate timeline and scale of work
• Approximate cost
• Key performance indicators
• Contingency information
• Tenant agreement

• Contractor 
• • Basic information
  • Procurement status
  • TrustMark certificate (or equivalent)

• Risk assessment
• Property
• Tenant
• Potential 

Social Housing Decarbonisation
Fund Key dates

In order to ensure your application in on track, it must be submitted before the applications close, any applications sent after the following date will not be considered.

To make sure you send your application on time, and have the best possible chance of success, here are some key dates outlined by The Department for Business, Energy and Industrial Strategy (BEIS):

In order to secure funding, you must submit your application by November 2022. To make sure your bid has the best chance of being successful, get in touch with our experts, who can gather data, plan proposed work, and create a realistic timeline for your retrofits