Chancellor Greenlights Full £13.2 Billion for Warm Homes Plan as Part of New Budget Strategy

Chancellor Rachel Reeves has confirmed that the UK Government will fully fund the Warm Homes Plan with £13.2 billion as part of a wider five-year Spending Review that covers significant investments across energy, transport, industry, health, and defence. Speaking to Parliament on 11 June, Reeves announced that the initiative would be expanded to support more vulnerable communities and enhance energy efficiency in social housing.

The plan, designed to cut heating bills and bring cleaner energy solutions to homes, is expected to launch fully in the autumn. This follows months of concern from campaigners, especially after last year’s Autumn Statement earmarked only £3.4 billion for energy efficiency through to 2028.

Alongside Warm Homes, the government has pledged £14.2 billion for Sizewell C, the first nuclear power station in the UK to receive state funding since 1988. Another £2.5 billion is being set aside for one of Europe’s first small modular reactor programmes, a move that’s been closely watched by the energy sector.

Carbon capture and storage (CCS) projects are also getting a boost, with £9.4 billion committed to support large-scale rollouts. This includes backing for the Acorn project in Aberdeenshire and the Viking project in the southern North Sea.

The Acorn initiative, located near Peterhead, has been in development for years and is considered key to advancing Scotland’s hydrogen sector and decarbonising industries, such as Grangemouth. However, the technology still hasn’t been proven on a commercial scale. The Viking project focuses on capturing carbon emissions and storing them beneath the seabed, helping reduce industrial pollution over time.

The Chancellor also confirmed £8.3 billion in funding for Great British Energy to support the UK’s broader clean energy transition.

Health and defence were also in the spotlight. The NHS will receive a £29 billion boost aimed at reducing wait times and modernising services. Meanwhile, defence spending will rise by £11 billion over the review period.

Transport is also receiving significant attention. Reeves reaffirmed a £15.6 billion investment to improve public transport across England’s city regions. This funding will support a wide range of local transportation projects aimed at enhancing daily connectivity and reducing congestion. Delivery is planned through to 2031.

Another £2.3 billion has been allocated for upgrades across other regions between 2026 and 2030. The long-anticipated East West Rail line, which will link Oxford and Cambridge, is receiving £2.5 billion in funding. Cardiff Central Station will be upgraded, and other projects like the TransPennine Route Upgrade and the Midlands Rail Hub will continue moving forward to strengthen the national rail network.

Reeves also shared that updates to the Treasury’s Green Book will soon allow more effective evaluation of regional and place-based public investments.

The Spending Review places heavy emphasis on industrial development. Complete Infrastructure and Industrial Strategies are expected to be released in the coming weeks.

Among the headline figures is £22 billion in funding for research and development. The government is also investing £2 billion in support of its AI Action Plan, aiming to position the UK as a global leader in artificial intelligence.

The British Business Bank will see its lending capacity expanded to £25.6 billion, giving more support to small and medium-sized businesses. To equip young people for this shifting economy, £1.2 billion per year will be allocated toward training programmes and apprenticeships.

In the lead-up to the announcement, environmental advocates were worried about possible cuts to England’s sustainable farming budget. Groups like The Wildlife Trusts argued that reducing funds would weaken the UK’s legal commitment to stop nature’s decline by 2030.

In the end, there were no cuts. The government reaffirmed its £2.7 billion per year commitment to sustainable farming and nature recovery through 2029, a move welcomed by campaigners. Still, there were no new announcements on how the UK plans to actually meet its legally binding nature targets.

Organisations such as the World Wide Fund for Nature had called for a more detailed plan. Still, nature restoration and land use received little to no airtime in the Chancellor’s speech. Signe Norberg from the Aldersgate Group called this a missed opportunity, pointing out that environmental protection and economic growth do not need to be at odds.

The only reference to climate adaptation came through farming resilience. Environmental groups continue to call for a more ambitious investment in climate adaptation and flood protection, particularly as the Government’s national plan is now facing a legal challenge at the European Court of Human Rights.