Home Upgrade Grant: Phase 2 – HUG2 Update April 2024

Home Upgrade Grant: Phase 2 (HUG2) Updated Delivery Guidance for Local Authorities In April 2024

This article will help you understand the ECO4 guidance update released in April 2024. Excerpts from the official document have been used. You can download your official copy by clicking the button below to download your free copy of the HUG2 Update April 2024

ECO4 Gurus can help

The final deadline for submitting HUG2 batches is 31 December 2024. All HUG2 projects must be completed by the 31st March 2025. In order to be compliant to PAS2030 and PAS2035 you will no doubt know of the sheer volume of data and documents required to be produced for a compliant, auditable project submission for Trustmark lodgement. PAS 2030 and Retrofit Coordination should be at the forefront of your project workflow and not an afterthought. ECO4 Gurus can help you complete your HUG2 projects compliantly and with a smoother deliverability.

What is HUG2

HUG2 is a government-funded grant scheme. HUG2 provides people who live in low-income households living in the worst quality, off-gas homes in England, with energy efficient upgrades and low carbon heating to improve the efficiency of their homes. The HUG2 scheme allows Local Authorities to supply and install heating and insulation measures to homes who don’t already have gas central heating.

What is the HUG2 Update in April 2024

The update has been released after a review to identify ways in which the scheme can be changed that would not affect the impact of the changes in a negative way. this has helped clarify the changes made for year 2 of the HUG2 Scheme and how it will be affected by the PAS 2035/2030:2023 transitional period. This review is hoped to unlock more delivery within the scheme.

When did the changes take place?

The changes came into effect on the 2nd of April 2024. Any Batches or homes approved after this date fall within this updated policy guidance. Projects started before this April date shall be completed using the previous guidance.

What does the HUG2 Update April 2024 cover?

This HUG2 update covers the following points:

• Eligibility of household income and the threshold increase to £36,000.
• Updated cost caps, using the automatic batch system with the new cost caps and the temporary cost cap flex.
• Benchmarks for measure costs with increased transparency and fraud prevention.
• Grading of eligible measures including high heat retention storage heaters and other eligible measures.
• The updated PAS standards, what they are and how they effect HUG2 delivery. (download the PAS2035/2030:2023 here)

Eligibility: Household income

Based on the statistics on recent wage increases, housing cost increases and changes in TAX, the eligibility threshold has been increased from £31,000 to £36,000.

Other methods may also be used including After Housing Cost (AHC), Equivalisation Factor, to demonstrate that a low-income household is likely to be in fuel poverty. In these cases the grant recipient would have to provide clear pertinent evidence of how this was calculated.

Updated Cost Caps and Flex

Cost caps are a cap on the average cost of each property within the project. Flats and mid-terraced houses will have a cost cap of £8k if they have cavity walls and £15k if they have solid walls.

End-terraced, detached and semi-detached houses shall have an average cost cap of £12k if they have cavity walls and £24k if they have solid walls.

All the above property types shall also have an average cost cap of £14k where ‘Clean Heat’ is provided (renewable heating systems).

Note: Private landlords will be expected to pay at least 33% of the upgrade costs and social landlord must pay at least 50% of the upgrade costs

Automatic Batch System (ABS)

The ABS system has been updated to reflect the update to HUG2 including averaging out of cost caps, overspends and under spending of the average cost of the upgraded homes to give ‘headroom’ for more costly measures to other homes. This ‘headroom’ must be used up on projects started before 2nd April 2024 and can not be used on projects that started on or after the 2nd April 2024.

Temporary Cost Cap Flex

Batches of properties submitted after 2nd April 2024 may exceed the average cost cap by up to 20% on average for this second year. The table below outlines what that could look like in GBP on average.

Table 4 from the HUG2 update 2024

Note: The above 20% flex uplift is based on funds received from the grant, and not from contribution from the landlord or social housing contribution organisation.

Benchmarks for Measure Costs

DESNZ are now sharing the upper bounds of the measure costs benchmarks with grant recipients that sign a non-disclosure agreement (NDA). This will help them understand where measures may exceed the expected levels of average home upgrades in advance so batches can be submitted that are automatically accepted providing they are within the Flex cost caps and overall project spend.

Fraud prevention

The measure cost benchmarks are shared only with a DNO in place. The confidential obligation must be met including the part of the DNO stating that the measure cost benchmarks can not be shared even to your supply line.

Grant recipients will be provided with a Fraud Management Plan (FMP) and Grant recipients must adopt a proactive, targeted and structured approach to managing errors and fraud with a monthly report of current and emerging fraud risks.

Eligible measure grading

High retention storage heaters (HRSH) have been regraded as a measure grade ‘B’ for electrically heated off-gas flats where air source heat pumps are not a feasible option due to the location, property type or permissions from third parties.

Where the property is not a flat, HRSH will remain a grade ‘C’ measure. The grade of HRSH can be inputted as a grade ‘B’ or ‘C’ within the ABS portal depending on its context.

Below is the table of eligible measures found in the Home Upgrade Grant: Phase 2 – HUG2 Update.

Updated PAS2035/2030 standards

PAS 2035 is a Publicly Available Standard, with guidance that covers all the elements involved in the retrofitting energy efficient measures of existing homes. PAS 2030 specifies requirements for installing energy efficiency measures in existing homes. The installer must install all energy efficient upgrades to PAS2030 and the Retrofit Coordinator assess the compliance of the project to PAS2035.

It is best for the Retrofit Coordinator to be involved in the project from its inception to ensure compliance is guaranteed throughout the project.

New PAS Released

In September 2023 the latest revision of PAS2035/2030 was released. PAS 2035/2030:2023

The beginning of the new PAS explains what changes have been made. There are also clauses that have been included to facilitate scale retrofit, whole dwelling retrofit, the role of the Retrofit Coordinator and the production of an airtightness strategy for projects

The new PAS2035/2030 can only be followed when a retrofit assessment has been completed to the new standard. Projects where a retrofit assessment has been produced using PAS2019, the project must also be assessed against the PAS2035/2030:2019 standard.

After the 30th of March 2025, all projects must comply to this new standard.

If you need more information on the new PAS2035/2030:2023 ECO4 Gurus can help you. Just contact Andrew Foote direct on 07831564351 or email at andrew.foote@eco4gurus.co.uk or click the link below to fill out our contact form.

ECO4 Gurus don’t just work in ECO4!

Did you know ECO4 Gurus don’t just work within ECO4. Yes, that’s where our roots grew but we also work with all ECO retrofit projects funded through GBIS, LAD, SHDF and HUG2.

Why Choose ECO4 Gurus?

ECO4 Gurus provide HUG2 Coordination services for installers and other stakeholders within the HUG2 environment. We advise on Workflow Management, Compliance to HUG2 guidelines with Compliance solutions for PAS2030 and PAS2035 Standards. This ensures a robust method of operation for optimal project outcomes.

And remember, our company owner Andrew Foote started his first construction and renovation company way back in 1993, has a real life understanding of building pathology and domestic retrofit industry and has installed most of the measures contained in PAS 2030/2035 projects. This is just one of the reasons why people use ECO4 Gurus for the coordination of their ECO retrofit projects.

Guidance for HUG2 with ECO4 Gurus

Our guidance ensures projects are completed in an efficient manner with optimal project outcomes. We are involved in the end-to-end process from Retrofit Assessment to lodgement at Trustmark’s Data Warehouse. Once you understand ECO4 Gurus optimal workflow pathway with project milestones towards the final goal of a successful project, you will start to understand why ECO4 Gurus are the best at what we do.

We believe in an open and direct approach so for for help and advice contact Andrew Foote direct on 07831564351 or email at andrew.foote@eco4gurus.co.uk

Click the button below to download your copy of the HUG2 Update April 2024

Download from official Government website > home-upgrade-grant-2-delivery-guidance-2024-update.pdf

HUG2: Phase 2 – Eligible postcodes

Click the button below to learn about HUG2: Phase 2 – Eligible postcodes