CIH response to Department for Energy Security and Net Zero (DESNZ) consultation on the Heat Network Technical Assurance Scheme (HNTAS)

We have concerns about the consultation’s lack of discussion of the possible impacts of HNTAS on social and affordable housing supply. As around 90 per cent of heat networks are in England, we refer mostly to that specific context. However, we also refer to impacts in Scotland and Wales where appropriate.

In July 2025, the government published a five-step plan to deliver a decade of renewal for social and affordable housing in England. This plan committed to delivering the biggest increase in social and affordable housebuilding in a generation, alongside a transformational and lasting change in the safety and quality of social housing.

In a January 2026 update, the government reiterated it would implement a 10-year rent settlement for social housing in England and introduce rent convergence to address the disparity between actual social rents and formula rents. It confirmed that rent convergence will be implemented by up to an additional £1 on weekly rents each year over and above CPI+1 per cent from 1 April 2027, and by up to an additional £2 on weekly rents each year over and above CPI+1 per cent from 1 April 2028, until formula rent is reached.

The purpose of introducing rent convergence in England is to accelerate improvements to the quality of existing social housing and, crucially, to enable social housing providers to build more social homes. Previous analysis undertaken for CIH and submitted to MHCLG’s consultation on introducing rent convergence indicated that the implementation of £2 per week convergence would mean housing associations would have £2.2 billion additional income over 10 years, with local authorities benefitting from £3.1 billion additional income over the same period. Our analysis outlined that this would enable the building of approximately 43,000 new homes.

Additionally, in our response to MHCLG’s previous consultation on rent convergence, we warned that “the cost per home of meeting HNTAS in existing homes across the social housing sector could be significant. This cost would need to be folded into existing asset improvement programmes and could absorb a substantial amount of the rental income providers obtain from convergence [in England].”

We are therefore very concerned to find that the present consultation on HNTAS does not include any consideration of the impact of the proposals on social and affordable housing supply across England, Scotland, or Wales. Nor, more specifically, on the government’s five-step plan to deliver a decade of renewal for social and affordable housing in England. 

Based on the government’s own options assessment, a quantitative estimate of this impact can be estimated in England. The energy regulator Ofgem has stated (p.18) that 60 per cent of existing heat networks are in social housing. CIH understands that most of these either operate on a cost recovery basis, or at a loss. The total estimated cost for upgrading heat networks to meet HNTAS in Great Britain is stated in the consultation options assessment (p.15) to be c.£3.9 billion over at least ten years. This means the total expected cost of upgrades to the social housing sector in Great Britain is £2.34 billion over at least ten years. If we accept the assumption that 90 per cent of all heat networks in social housing across Great Britain are located in England, following the wider estimate noted above, this means that approximately £2.1 billion of the total cost of HNTAS could fall to social housing providers in England.  

We note the commitment in the Warm Homes Plan to provide £15 million per annum to 2029/30 for the Heat Network Efficiency Scheme (HNES). However, even if we make the unrealistic assumption that all of this funding goes to social housing in England, this will cover less than 5 per cent of the overall cost to the sector of meeting HNTAS, ensuring that a significant proportion of rental income would be required to meet the remainder of the cost. Meanwhile, social housing providers in England have to date been unable to deliver heat network connections or upgrades via the Warm Homes: Social Housing Fund due to the lack of a suitable quality standard.

We must therefore assume that most of the £2.1 billion cost to the social housing sector in England could need to be paid for by rental income, with an underdetermined proportion being passed onto leaseholders (see our response to Q19 below). According to the government’s consultation response on rent convergence, the estimated total benefits of convergence to the sector are expected to be a total of £5.8 billion (£2.7 billion for private registered providers and £3.1 billion for local authority registered providers).

Overall, depending on the timescales used for reaching full HNTAS compliance, this suggests that that up to 36 per cent of the additional income created by rent convergence over the next ten years could be absorbed by HNTAS.

The government’s response to its consultation on rent convergence did not acknowledge the potential impact of HNTAS or produce an estimate of the number of additional social and affordable homes that would be built as a result of the policy.

However, based on our previous analysis, if up to 36 per cent of the income generated from rent convergence is redirected to HNTAS, the impact on social and affordable housing supply could be considerable. It could result in thousands of fewer social and affordable homes built over the next ten years. Similarly, while devolved housing and rent setting policy is different in Scotland and Wales, we would expect similar pressure to be placed on social housing providers’ rental income and financial capacity in both nations, potentially restricting their ability to also build new social and affordable homes.  

Overall, until these issues have been satisfactorily reviewed and addressed, our view is that the implementation of HNTAS should not be taken forward and should instead be paused. A simpler solution is required that delivers technical improvements and better outcomes for households connected to heat networks, while significantly reducing the cost and complexity of the current HNTAS proposals. 

Please see our response to Question 15 for our overall response to the options assessment. We would add further evidence in three areas.

Social housing

In our engagement with members and partners on this consultation, including with social housing providers that have commissioned heat network optimisation studies or undertaken pilots, we have been informed of a wide range of possible costs for social housing. Based on this engagement, we estimate that the cost of meeting HNTAS is likely to be between £10,000 and £20,000 per home.

According to an Ofgem document from August 2025, approximately 477,000 households are connected to a heat network. If 60 per cent of these are in social housing, this would equate to around 286,200 social homes connected to a heat network. Based on our estimate of costings above, the total cost of HNTAS to the social housing sector across Great Britain could therefore be between £2.9 billion and £5.7 billion. This is a wide range with a large amount of uncertainty attached to it, but it indicates that the real cost of HNTAS could potentially be much higher than the government’s options assessment, closer to the Heat Trust’s estimate of £5 billion in total costs.

We have encouraged our members and wider partners in the social housing sector to submit their estimates for how much the proposals would cost their organisations to the consultation in response to Q18. We encourage the government to use these estimates to refine its costings in the options assessment.

Supported and older people’s housing

Supported and older people’s housing can be thought of as sub-sectors of social housing. Supported housing provides invaluable housing and support for disabled people, homeless people, people with mental health problems, people who have experienced domestic abuse, and others. Housing for older people includes a range of different housing options to best suit the needs of individuals and families. Both types of housing (henceforth termed ‘supported housing’ for convenience) play a vital role in helping people live safely and independently in communities, including through preventing homelessness, reducing pressure on social care and enabling timely hospital discharge.

Supported housing is especially relevant to the HNTAS consultation because, although exact data on numbers does not exist, individual supported housing schemes are usually heated by communal heat networks. This is typically because supported housing providers need to ensure safe temperatures are continually maintained for the residents they house, and they can most appropriately achieve this through communal schemes with centralised controls. Because people living in supported housing are not billed for heating or hot water based on consumption, supported housing has been exempt from The Heat Network (Metering and Billing) Regulations 2014 on the basis it would be disproportionately costly to include it, along with almshouse accommodation and student accommodation.

However, the HNTAS consultation proposes to extend metering requirements to existing supported housing, almshouse accommodation and purpose-built student accommodation, so that they can be covered by HNTAS. This will generate costs for supported housing providers. Feedback we have received from members and partners suggests that the cost brackets noted above, between £10,000 and £20,000 per home, is also representative for organisations who provide supported housing schemes. In addition, because supported housing providers have been exempted from the previous regulations, it is possible that costs for the supported housing sector will be towards the higher end of this cost bracket as they may be less likely to have made progress on metering over the last decade.

While we note the section of the consultation that proposes small schemes (<11 dwellings) will be exempt, supported housing is already under severe strain, with rising costs and diminishing funding streams. Research by the National Housing Federation shows that 1 in 3 supported housing providers had to close schemes in 2024 due to these pressures, and many more may be forced to close in the future. In this context, we are concerned that extending the metering requirements to supported housing could fatally affect the viability of some schemes, reducing the supply of a critical resource for enabling people to live safely and independently in their communities.

As with social housing generally, we are concerned that there is no discussion of the impact of HNTAS on the viability of existing supported housing schemes, beyond the small scheme exemption. We reiterate that until this issue (and the issues generally) are satisfactorily reviewed and addressed, our view is that the implementation of HNTAS should not be taken forward and should instead be paused.

Leaseholders

As far as we are aware, accurate data on the total number of leaseholders connected to heat networks does not exist. However, as flats are commonly leasehold, and as heat networks are common in flats, especially in urbanised areas, leaseholders are extensively exposed to the costs of HNTAS.

The HNTAS consultation is also taking place in a context in which financial pressures on leaseholders are growing, and in which the government is progressing landmark primary legislation to reduce these pressures. Service charges are already unaffordable for many leaseholders, especially for those experiencing ongoing cladding remediation and/or wider building safety issues, and the current proposals risk exacerbating these challenges. If the cost of upgrading each home in a typical block of flats to meet HNTAS compliance is between £10,000 and £20,000 (see above), the recovery of even a modest proportion of these costs through service charges will likely be unaffordable for many leaseholders. It is an open question whether leaseholders will consider this a fair exchange for the provision of improved technical standards (and their certification). We encourage the government to pay special attention to any views submitted by leaseholders and their representatives to the HNTAS consultation.

Overall, until the issues outlined here for social housing providers, supported housing providers, and leaseholders have been satisfactorily reviewed and addressed, our view is that the implementation of HNTAS should not be taken forward and should instead be paused. A simpler solution is required that delivers technical improvements and better outcomes for households connected to heat networks, while significantly reducing the cost and complexity of the current HNTAS proposals.

We Disagree.

As we have set out elsewhere in this response, we are concerned that this proposal would significantly affect the viability of vital supported housing schemes across Great Britain. Please see our response to Q19 for further detail.

Until these issues have been satisfactorily reviewed and addressed, our view is that the implementation of HNTAS should not be taken forward and should instead be paused. A simpler solution is required that delivers better technical standards and outcomes for households connected to heat networks, while significantly reducing the cost and complexity of the current HNTAS proposals.

However, should the government decide to proceed with the current HNTAS proposals, or some version of them, we would encourage the government to replicate the justification and approach taken to The Heat Network (Metering and Billing) Regulations 2014. This would see supported housing, almshouse accommodation and purpose-built student accommodation exempt from HNTAS.

If alternative solutions to HNTAS are explored, we also encourage the government to engage with the supported housing sector to determine how best to improve heat network technical standards going forwards. In our view, the critical test for any approach to improving technical standards in supported housing must be that it does not negatively affect the viability of individual schemes or the providers that manage them. 

Subsidised HNTAS training is currently only available in England.

CIH supports the position of the Scottish Federation of Housing Associations (SFHA) and Community Housing Cymru (CHC) in relation to the need to expand subsidised training to Scotland and Wales. All devolved nations in scope of any new heat network technical standards – whether HNTAS or an alternative solution – should have access to equal levels of subsidised training.

This training should be made available before the implementation of new technical standards, to ensure the workforce is in a position to meet demand when the scheme begins. 

Aside from the specific concerns outlined in our response to the consultation, we have reservations about the overall direction of heat network policy and its impact on the social housing sector.

In England in the last year, the government and Ofgem have taken forward policies on heat network regulation, zoning, Minimum Energy Efficiency Standards (MEES), Energy Performance Certificate (EPC) reform, the Future Homes and Buildings Standard, and the design of the Home Energy Model (HEM), as well as HNTAS. All of these policies are extremely consequential for social housing providers who own and/or operate heat networks. However, there has been very little recognition from the government and Ofgem as to the interplay between, and aggregate impact of, these policies. The MEES consultation for the social rented sector did not mention heat networks at all (outside of the call for evidence on decarbonisation). As noted above, the HNTAS consultation has been developed without any seeming regard for the possible impact on the government’s ambitions to build more social homes or safeguard the viability of supported housing.

More clarity is urgently required on how the government intends these various policies to be enacted by social housing providers who own and/or operate heat networks, including the essential question of how they will be paid for and what exemptions will be allowed. If this does not occur, feedback from our members suggests that they could respond to the cost and complexity of heat network policy by seeking to decommission existing heat networks (even those that are not close to end-of-life) and retrofit other types of heating into existing homes, and stop considering heat networks for new build schemes. In turn, this could jeopardise the government’s targets to more than double the amount of heat demand met via heat networks by 2035, and to have one fifth of all heat provided by heat networks in 2050.

Overall, until the issues outlined in this response have been satisfactorily reviewed and addressed, our view is that the implementation of HNTAS should not be taken forward and should instead be paused. A simpler solution is required that delivers better technical standards and outcomes for households connected to heat networks, while significantly reducing the cost and complexity of the current HNTAS proposals.

For more information on CIH's response, please contact Matthew Scott, policy manager at CIH, at matthew.scott@cih.org