Introduction to HUG2 for local authorities

The Home Upgrade Grant (HUG) provides energy efficiency upgrades and low carbon heating to households that are low income, off the gas grid.

Local authorities are delivering the first phase, HUG1, until March 2023.

Following that, up to £700 million of funding will be available to local authorities to deliver HUG2 until March 2025.

How it works

If successful in application, local authorities will use the allocated funding to install measures to eligible homes in their area.

These measures should be tailored to individual cases, so they are the most appropriate for the property.

Low-income homeowners will not be expected to contribute to the costs.

  • Private landlords must contribute at least a third of the total cost
  • Social landlords must contribute at least half of the total cost

All upgrades must be within the relevant cost caps, which have been updated for HUG2.


Local authorities are to apply for HUG2 by 27 January 2023.

The application is split into three stages.

Stage 1: Outline application stage

Local authorities are asked about the size of the project, commercial and delivery assurance, and how the plan to target/verify low income households

Stage 2: Delivery assurance check

Local authorities will then be asked to provide evidence on their resourcing and procurement progress, evidencing they have contractors in place and can revise project delivery forecasts/projects plans

Stage 3: Batch application

Local authorities will be asked to submit the following:

  • housing stock data on surveyed homes
  • the mix of measures they intend to install (energy efficiency/clean heat)
  • the upgrade costs for the batch of homes, including costs of installation

Stage 3 is repeated throughout the delivery window, with funding released in batches subject to requirement.

Local authorities are encouraged to submit their applications at the earliest possible date, as funding for the second round of applications is not guaranteed.

Those who submit earlier will benefit from extra months for project mobilisation and opportunities to revise their application and re-submit if initially unsuccessful.

How is HUG2 different from HUG1?

60% of the funding is ring-fenced for rural local authorities.

Eligibility criteria has also been amended, with the scrapping of the 30% cap on EPC D rated properties and introduction of properties in LSOAs 1 - 3 being automatically qualified regardless of householder eligibility.

Support for Park Home properties is capped at 10% of the total project.

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