More than 115,000 homes across England are to get upgrades to improve their energy efficiency and save residents money on their bills, according to government ministers after announcing the allocation of nearly £2bn in funding.

The news comes as the UK government has announced funding worth £1.8bn through the Social Housing Decarbonisation Fund, Home Upgrade Grant and the Public Sector Decarbonisation Scheme to boost energy efficiency and cut emissions of homes and public buildings across England.

The Social Housing Decarbonisation Fund and Home Upgrade Grant are collectively worth £1.4bn, which will be used to fund energy-saving measures ranging from loft insulation to new windows.

An additional £1.1bn in match funding for social housing provided by local authorities, providers of social housing and charities will bring the total investment to £2.5bn to upgrade social and private homes in England.

Ministers claim these schemes could also support around 20,000 jobs in the construction and home retrofit sectors.

On top of this, a further £409m has been granted through the Public Sector Decarbonisation Scheme to help public sector buildings such as schools and hospitals drive down their carbon emissions. 

Upgraded heating systems, powered by cleaner, cheaper, renewable energy, will reduce the use of fossil fuels exposed to volatile global energy prices.

Secretary of state Grant Shapps said: “This is a huge investment that will help households save hundreds on energy bills and see them heat their homes for less, and stay warm for longer.

“Not only this but the funding is also a huge boost for job creation and economic growth, opening up new and exciting opportunities across the UK’s ever-expanding green sector.”

Lord Callanan, minister for energy efficiency and green finance, said: “The UK is truly a world-leader when it comes to reducing carbon emissions and the progress we’ve made over the last decade has been remarkable. But we can’t rest on our laurels and must continue to drive forward progress, setting a standard for other countries to follow.

“Reaching net zero means considerable action from the public sector as well as private sector. Through the Public Sector Decarbonisation Scheme funding allocation announced today, we are empowering public bodies to save the taxpayer hundreds of millions while packing a punch on our ambitious and necessary climate goals.”

Local authorities, providers of social housing and charities have been awarded an injection of £630m, to come from Phase 2 of the latest stage of the Home Upgrade Grant, while £778m will be provided through the most recent wave of the Social Housing Decarbonisation Fund. 

An additional £1.1bn in match funding will be added to this through the Social Housing Decarbonisation Fund, bringing the total to £2.5bn to upgrade social and private homes in England.

The funding will be rolled out from April 2023 to upgrade homes over the next 2 years.

Emma Pinchbeck, chief executive of Energy UK said: “Improving the energy efficiency of Britain’s draughty homes and buildings is the best way to cut energy bills permanently, while also boosting the UK’s energy security and reducing carbon emissions.

“Today’s announcement will rightly prioritise those who need support the most like low- income households, social housing and public buildings.

“Industry will work with government to build on these vital schemes and to remove any barriers that prevent households and businesses from saving money on their bills by reducing heat loss and conserving energy.”

The UK Green Building Council (UKGBC) welcomed the news, but urged that long-term action is needed.

Louise Hutchins, UKGBC head of policy and public affairs, said: “This welcome investment in energy efficiency will deliver much-needed support for some of the poorest households in the coldest draughtiest homes and to public services struggling to pay bills.

“Significantly higher levels of government investment will be needed over the coming years to turn the tide on the country’s energy efficiency and climate challenge. The schemes will need to become much less complex to administer with sustained predictable funding in order for local authorities and others to plan the work and for industry to scale up and skill up. 

“The economic prize is huge - worth £56m to the UK economy and 500,000 skilled jobs over a decade.”