Guidance

Central Heating Fund FAQs

Updated 2 September 2015

1. Bidding process

1.1 Where can I find out more about the fund?

Guidance on the scheme and how to apply

Please do get in touch with the DECC team [email protected] if you have any further queries not answered in this document. Additional questions and answers will be added to the document as new queries are raised.

1.2 Who can apply? Can Social Landlords or Housing Associations apply directly?

Only Local Authorities are able to directly apply to the Central Heating Fund and the funding will be paid directly to the local authority even if this will then be passed onto a housing association or registered social landlord. However, we know that in many cases local authorities will want to work closely with partners in preparing bids, and we encourage this to take place.

1.3 Are joint bids better than single authority bids?

There is no hard and fast rule for this – we will assess the content of the bids rather than which local authorities have submitted them. We encourage authorities to link up with others to form consortium bids where there are clear benefits from doing so, for example, to share a project management team, to benefit from economies of scale in procurement or to encourage wider learning. Where local authorities are forming consortiums, one local authority will need to be designated as the lead authority and be responsible for completing the application form and receiving funds.

1.4 I can’t access the application form. It appears password protected or pop-ups appear with errors.

We are aware that some people have been having problems using the form due to compatibility settings. We have uploaded an alternative version

If you continue to have problems, please contact the central heating fund team at DECC [email protected]

1.5 Is there an advantage in applying earlier than the cut-off date?

Bids won’t be assessed prior to the 5th June deadline. However, in order to avoid any unforeseen problems with submitting forms, we encourage bidder not to leave applications to the last minute. We will answer individual queries via [email protected] as well as publishing FAQs and hosting webinars before the deadline.

1.6 Are the criteria weighted?

We have not set out the exact weighting that will be used but the most heavily weighted criteria will be an assessment of the bids’ value for money in terms of bill savings per pound spent and amount spent per installation and the fit with the recently launched fuel poverty strategy. Alongside that we will also score bids on:

• Ability to leverage in funding whilst ensuring additionality.
• Strength of delivery plans, project management and assurance of delivery.
• Delivery to rural properties.
• Supporting households’ use of new central heating.

1.7 Is funding per property capped?

There is no overall cap per property and bids will be compared on the comparative costs of delivery. Furthermore, we will assess bids on a whole project basis so it may be that bids will want to combine low cost installations offset against more expensive, hard to treat, options.

1.8 Do bids need to meet all of the criteria to be eligible?

We are aware that in some cases local authorities will not be able to meet every criterion for the bids (e.g. if they do not have any rural properties in their area) and therefore bids do not have to meet all the criteria. However there are certain key parameters, namely measures must be provided to fuel poor, non-gas households installing a first time central heating system.

Where an authority is not able to meet a criterion, the reason for this should be set out in the application form.

1.9 Is the scheme for this year only?

The intention is that the spending by local authorities would take place this financial year as that is when the funds have been allocated for. There may be future rounds of the fund but no decision has yet been made on this.

1.10 Will payment be made to projects up front?

As the funds are being provided to local authorities under s31 of the Local Authority act the standard practice will be to provide the funds to the local authority up front. However, we would expect local authorities to take differing approaches in how they pass on funds to partners or procured contractors where a staggered payment approach may be more suitable.

1.11 Can I see a copy of the memorandum of understanding that will be agreed between successful bidders and DECC?

A draft of the template memorandum of understanding (the exact details will be specific to each project) is available on request from the team at DECC. Please email [email protected] for a copy.

2. Eligible properties

2.1 What does off-gas mean?

For a household to be defined as off-gas (or non-gas), they should not currently have a mains gas central heating system being used in the property as their primary heating fuel.

For clarity, the Central Heating Fund is designed to incentivise first time central heating systems and therefore houses with pre-existing central heating systems, whatever the heat source, are not eligible for funding.

However, bids which plan to install measures in properties which currently use single gas fires (from mains gas) as the primary source of heating, but are not centrally heated, will be eligible but may score poorly on both strategic fit and value for money. Any bids planning to replace single gas fires will need to very clearly set out how the bid meet these criteria.

2.2 Can we use an area based approach and how will this impact the assessment of the bid?

An area based approach to targeting may have some benefit in terms of ease of delivery. However, we are keen to ensure that the households receiving measures can be evidenced as being in fuel poverty in line with the low income/high costs measure, or our permitted proxy, the ECO AW group. For clarity, area based eligibility alone, such as any property within a deprived geographical area on the indices of multiple deprivation is not sufficient.

2.3 Are there expectations or guidance in terms of split between rural/urban areas within bid?

Although we are looking to encourage the delivery of measures to rural properties, and will therefore be weighting bids which contain a high rural element accordingly, we also expect to receive bids that include a large number of properties treated in urban and semi-rural areas.

2.4 Is a contribution from the householder expected?

We do not require that a contribution from the householder is sought, but equally authorities may decide that they want to include the potential for this in their bid if they think it will make the money go further or improve the value for money of the bid.

2.5 I see from the guidance that new build and self-build properties are not eligible? How should these types of properties be defined?

The central heating fund is designed to upgrade existing heating systems to first time central heating. New build or self-build properties are not eligible - the heating system for which funding is being bid for must not be installed before the property is first occupied.

For clarity, we are not specifying that households built after a specific date are not eligible. We are stating that the central heating fund will not fund the first heating system installed in a property if that system would have otherwise been required by building regulations.

2.6 Are park homes included as eligible?

Yes, any household which is at risk of fuel poverty, has no central heating and is non-gas is able to be included in a bid.

2.7 Does the bid have to provide exact detail on every property that will receive measures under the scheme?

We would welcome any detail that local authorities are able to provide on the households that will be receiving measures under the bids. This will allow us to make a more accurate judgement when scoring the application. However, we are aware that in many cases local authorities will not have been able to identify all of the properties prior to submitting bids (particularly where the focus is on private properties) and we will not therefore be expecting detail on every property.

3. Eligible technologies

3.1 Are all parts of the heating system eligible for funding?

All of the parts of the heating system used to generate or distribute heat are eligible for funding including the heat source (e.g. a boiler), the pipework and the radiators.

3.2 Can I remove night storage heaters and receive funding?

Yes, storage heaters can be replaced with a central heating system as long as the bids demonstrate good value for money and bill savings. In the guidance for the scheme, we have tried to set out that that the “worst first” policy means that replacing storage heaters is not at the top of the list of priorities. In comparison to a project removing e.g. electric convection room heaters, the bill savings and SAP improvements for replacing storage heaters will be lower and they will therefore score less well on the value for money assessment.

Therefore, local authorities that are intending to replace storage heaters should include the rationale, including estimated bill savings in their bid.

3.3 Can I install storage heaters?

No, we do not consider storage heaters to be a central heating system for the purposes of the Central Heating Fund.

3.4 Why haven’t you made insulation mandatory or eligible under the scheme?

The core aim of the Central Heating Fund is to see the greatest number of first time central heating systems installed in fuel poor households, as, in England, support has been limited for these kinds of measures. Addressing this specific issue is the basis on which DECC were allocated funding in the 2014 autumn statement. As the size of the funding we have for the Central Heating Fund is limited, we made the decision to be stricter on the measures eligible under the scheme. However, we want to emphasise the importance that insulation can play in both reducing the fuel poverty gap for these households and improving the efficiency of the new heating systems. We expect that local authorities will utilise other funding sources, such as ECO affordable warmth funding to install insulation, so we still expect to see a good number of insulation measures installed as part of the Central Heating Fund.

3.5 Can households with partial heating systems (where only some of the rooms are on a central heating system) be included in the bid?

Provided that a central heating system is installed that provides heating to one or more additional rooms, and involves the replacement of the heating source, then these households can be included in bids. For example, a system with a solid fuel fire with a back boiler with distribution to more than one, but not all of the property’s rooms would be eligible for replacement and extension. However, any existing central heating system fuelled by mains gas is not eligible for replacement or extension under the fund and, as highlighted above, the replacement of any single room gas heating will score poorly.

4. Combining government funding streams

4.1 What are the State aid implications we need to consider in bids?

We consider that central heating measures installed in housing association or private rented properties using money received from the Central Heating Fund could amount to a state aid. Therefore, the De Minimis Regulation will need to be complied with in order to ensure that such aid is given lawfully. While there are other options available to Government to ensure that aid is given lawfully we consider that the approach taken is the most appropriate bearing in mind the nature and purpose of the Central Heating Fund.

The selection of installers and installation products can also have state aid or procurement law implications, as can the involvement of other commercial organisations. We therefore encourage local authorities to consider the state aid implications of any partners chosen as part of the bid.

4.2 Can I claim the Central Heating Fund and the Renewable Heat Incentive?

If you intend to claim the domestic Renewable Heat Incentive for a system installed using Central Heating Fund money then you will need to be aware that any Central Heating Fund funds used to pay for the heating source itself (such as the heat pump or biomass boiler) will be deducted from the domestic Renewable Heat Incentive payment received. If the Central Heating Fund money or other grants are used to pay for the entire costs of the heating source, it may become ineligible for the Renewable Heat Incentive. However, the Central Heating Fund can be used for the other in house works such as the pipework and the radiators. More information about domestic Renewable Heat Incentive

If you are proposing to install renewable heat in a district heating system (where one heat exchanger serves more than one property), or a single property which may not be considered domestic (e.g. a farmhouse), and claim the non-domestic Renewable Heat Incentive then you should check the eligibility requirements. Under the non-domestic Renewable Heat Incentive a grant from public funds cannot be used for the purchase or installation of the heating technology however a grant can be used towards other costs associated with a heat network, for example piping. Eligibility and how to apply

4.3 Could a shared heat pump qualify as a district heat system and therefore claim non-domestic Renewable Heat Incentive?

The Central Heating Fund does not prohibit access to the non-domestic Renewable Heat Incentive, however the Renewable Heat Incentive has specific rules around the use of funding from a public source – so you should check the scheme documentation.

4.4 Does the EPC need to be based on a site visit or will a desk based report be sufficient?

We have not strictly defined this as part of the guidance of the scheme. Desk based EPCs are permissible, however bids will need to ensure, and evidence, that appropriate measures have been put in place to ensure the accuracy of the reports.