Energy Company Obligation 4 and the Great British Insulation Scheme: mid-scheme changes - equality impact assessment

Q: Recommendations

The public sector equality duty under section 149(1) Equality Act 2010 applies to this decision. An equality analysis is set out in Annex A for your consideration. The key issue which arises from these changes in relation to the PSED is the missing data in some of the sections due to modelling limitations. Nevertheless, we recommend implementing these policies for the final year of the schemes, on the basis that it appears to have no disproportionate negative impact on equality and the need to advance equality has been considered appropriately.

Q: Monitoring and evaluation

Is a full Impact Assessment being conducted for your policy? Yes How do you plan to monitor this activity? The Department for Energy Security and Net Zero ( DESNZ ) will carry on collating and publishing the monthly official statistics for ECO4 and GBIS , to keep up to monitor scheme progress. The ECO4 and GBIS evaluations will assess the equality impact of ECO4 and GBIS by collecting demographic indicators such as age, ethnicity, and disability status of beneficiaries. The GBIS and ECO4 evaluations will collect evidence on the implementation and outcomes of the proposed changes and will continue to gather data of protected characteristics through planned household surveys, qualitative interviews, and household ethnography. Date you will review your monitoring activity? 2025 to 2026, with plans to publish in 2026. Who will be responsible for carrying out the monitoring and analysing the results? The evaluations are delivered by external experts and are overseen and quality assured by evaluation analysts in DESNZ .

Q: Record

Project documentation All documentation and analysis are recorded within the internal DESNZ ECO Analyst Team folders.

Question 1

Brief outline of proposals

Accepted Answer

Energy Company Obligation 4 and the Great British Insulation Scheme: consultation on scheme changes

Energy Company Obligation Schemes (ECO) have been in place since 2013. Changes to the existing Great British Insulation Scheme and Energy Company Obligation 4 have been proposed to improve the expected achieved outcomes from GBIS and to update both schemes in line with developments in regulation and process.

Existing schemes:

GBIS (Great British Insulation Scheme): The primary purpose of GBIS is to provide £1bn of support to low-income homes and those in lower council tax bands with an EPC rating below C. This support aims to deliver energy efficiency measures to mitigate rising energy prices. GBIS also aims to support a wider pool of households through a general eligibility group, covering homes in Council Tax bands A-D in England, A-E in Scotland, and A-C in Wales, with an EPC rating of D and below. This approach is designed to include households at risk of struggling to pay their energy bills but who are otherwise ineligible for other support schemes.

ECO4 (Energy Company Obligation 4): ECO4 is a domestic energy efficiency scheme focused on supporting fuel-poor, low-income, and vulnerable households. The main objective is to improve the least energy-efficient housing stock occupied by these households, aiming to reach EPC band C by 2030, with an interim milestone of band D by 2025. ECO4 also aims to advance equality of opportunity for persons sharing a protected characteristic by targeting fuel-poor households and those of lower socio-economic backgrounds in the worst-performing homes

Proposals:

Both schemes end 31 March 2026 and their performance up to the end of December 2024 is as follows.

There were 59,000 measures installed in 46,900 households under GBIS^{[footnote 1]}. Whilst GBIS performance is improving it is not on course to reach 300,000 households.
There were 744,200 measures installed in 226,700 households under ECO4^{[footnote 2]}.The scheme is likely to exceed its aim of delivering 800,000 measures but may do so in fewer than the 450,000 homes anticipated due to the number of measures being installed per household.

To enable greater delivery, GBIS regulations are being updated such that any project meeting the ECO4 rules will be an eligible project against an obligated supplier’s GBIS target. This delivery will be capped at 25% of each energy supplier’s total obligation ABS points and eligible for a conversion factor to equalise the costs of delivering ECO4 and GBIS. By way of illustration, the example, below, makes an assumption that ECO4 contributes 75% towards suppliers’ GBIS targets following the amendments to the scheme.

Additional changes include installing multiple fabric insulation measures in the same project and smart thermostats in the low-income group. Expanding the eligibility of measures allowed should increase delivery to households, and including smart thermostats as an eligible secondary measure in the low-income group will broaden the variety of measures on offer.

It is not believed that anyone with a protected characteristic will be discriminated against because of these changes. The overall improvements to scheme outcomes intended by the proposals are strong. Additionally, as the scale of the other proposed changes are small, it is expected that they will have no material impact on the original PSED assessment for either ECO4 or GBIS. Therefore, the view at present is that any discrimination that may occur would be proportionate and justified.

1.b. Is there a statutory exception for this decision?

No

1.c. are the aims of the duty relevant to this function?

The mid-scheme changes for these policies will impact the selection and number of households treated. But the impacts are expected to be positive, by allowing more measures to be installed in any one particular household and delivery to more low income households, which should positively impact those from backgrounds with protected characteristics.

Duty consideration

Duty	Y/N
Have you given sufficient time in your work plan to properly engage with the PSED, before and at the time of the decision?	Yes
Have you used evidence to understand the impact of your policy on protected characteristics separately, against each aim of the PSED?	Yes
Have you considered mitigations against adverse impacts?	Yes
Have you recorded your thinking in this form, and saved this form with key policy/programme documents?	Yes
As the duty is ongoing, have you built in dates to review the impact of this decision?	Yes

Question 2

Equality impacts evidence and analysis

Accepted Answer

Age

Table 1 illustrates how the changes may lead to a distribution of GBIS recipients more towards those in older age groups.

Table 1: Distribution of recipients by age (England only)

Age band	GBIS FIA figures^{[footnote 3]} / (GBIS Latest NBM figures)^{[footnote 4]}	ECO4 (FIA figures)	GBIS: ECO (25:75) [Agreed policy]	Overall population
16-24	1% (<1%)	2%	1%	3%
25-34	14% (11%)	7%	10%	15%
35-44	21% (15%)	16%	13%	17%
45-54	22% (31%)	19%	27%	18%
55-64	16% (16%)	19%	17%	18%
65+	26% (27%)	37%	33%	29%

Disability

Table 2 illustrates how the changes may lead to a distribution of GBIS recipients by whether a member of the household has a long-term illness or disability compared to overall population.

Table 2: Distribution of recipients by whether a member of the household has a long-term illness or disability (England only)

Member of the household has a long-term disability?	GBIS FIA figures / (GBIS Latest NBM figures)	ECO4 (FIA figures)	GBIS: ECO (25:75) [Agreed policy]	Overall population
No	70% (93%)	54%	90%	64%
Yes	30% (7%)	46%	10%	36%