UK ECO4 and GBIS Funding at Risk: Reform UK Net Zero Policy Impact on Energy Bills, Jobs, and Carbon Emissions

Is the UK’s ECO Funding Doomed? The Future of ECO4, GBIS, and Net Zero Amid Political Upheaval

By Chris Fryer

The past five years have seen the UK’s commitment to net zero and energy efficiency shaken by high-profile political shifts and global economic turbulence. Once hailed as global leaders in the push for decarbonisation, the UK and several European neighbours have recently begun to dilute or even scrap their legislative commitments to achieving net zero by 2050.

In Britain, the prospect of a Reform UK electoral surge raises the very real possibility that pivotal funding schemes—such as ECO4, GBIS, and other supports for energy efficiency and insulation—could be axed or dramatically scaled back.

Such a turn would not only have environmental repercussions but could also deepen social inequity, threaten hundreds of thousands of jobs, and leave the UK dangerously exposed to volatile global energy markets. This article explores whether the government’s Energy Company Obligation (ECO) schemes, including the fourth iteration (ECO4) and the Great British Insulation Scheme (GBIS), are truly doomed. We’ll also examine the wider European context, the potential impact of a Reform UK government, and the real-world effects on families, workers, and the nation’s emissions.

The Pillars of UK Energy Policy: ECO4, GBIS, and Net Zero Under Threat

The UK’s ECO schemes have, for over a decade, formed the backbone of state support for household energy efficiency. ECO4—the current phase—continues to fund insulation, new heating systems, and other upgrades for vulnerable and low-income Britons, while the GBIS focuses on boosting the take-up of home insulation among a broader swathe of households. These schemes are central to lowering energy demand, cutting bills, and reducing the nation’s carbon emissions.

However, the fate of such funding now hangs in the balance. In the past year, efforts to scale back or abolish net zero legislation have gained momentum, both in the UK (with the rollback of certain deadlines for the phase-out of petrol vehicles and gas boilers, for example) and on the continent. Countries such as Germany and Italy are also experiencing backlash against green reforms in the face of high living costs and political upheaval. The continent’s previously united front on climate action is fracturing.

Against this backdrop, Reform UK and other populist movements are capitalising on widespread public anxiety over energy bills and cost-of-living pressures. Their solutions, however, risk rolling back a decade’s worth of progress.

Reform UK: Ending Net Zero Subsidies and Slashing Green Levies

Reform UK has made scrapping net zero at the heart of its economic messaging. The party insists that abolishing net zero “subsidies”—including all government support for renewables as well as the ECO funds—would free up tens of billions of pounds. They have promised to reduce average UK household energy bills by £165–£203 per year by scrapping the so-called “green levy” which currently helps fund renewables, the ECO scheme, and the Warm Home Discount.

The green levy constitutes roughly £203 a year on the typical energy bill, according to an analysis by the New Economics Foundation. Of this, about £1.1 billion a year goes directly to the ECO scheme, helping millions of households access insulation and new heating systems. Reform UK argues that eliminating these charges will provide immediate relief to households, but glosses over both the legality of breaking existing renewables contracts and the wider economic consequences.

A False Economy: The Real Cost of Scrapping ECO and Green Levies

While the promise of a smaller bill may be superficially appealing, experts warn that abolishing these levies, particularly funding for ECO4 and GBIS, would inflict far more pain than relief. The most immediate effect would be “freezing” essential investment in insulation and retrofit for low-income families, precisely those who benefit the most from lower energy bills in the long run.

Past evidence cited by the New Economics Foundation shows that every £1 the government invests in domestic retrofit increases UK GDP by £3.20. Eliminating ECO funding would therefore slash up to £3.5 billion annually from economic activity, imperilling thousands of small builders, materials suppliers, and local retailers.

Moreover, the UK’s renewable surge (especially in wind and solar) has been underpinned by government support. Scrapping all renewable subsidies, as proposed by Reform UK, would render many large-scale projects unviable. The result? An immediate halt to the building of over 48 GW of renewable capacity by 2030—sabotaging the nation’s power decarbonisation target and losing upwards of £90 billion in gross value added (GVA).

The Jobs Time Bomb: Tens of Thousands at Risk

The renewable and energy efficiency sectors are vast employers, especially in regions hard hit by industrial change. Offshore wind alone supported over 32,000 jobs in 2022 and was on track to reach 100,000 by 2030. Onshore wind employs roughly 12,000, with ambitious growth forecast. The solar sector’s direct and supply-chain employment is climbing.

Should Reform UK’s policies take hold, at least 60,000 direct jobs would be lost in renewable construction and operations by 2030—a severe underestimation, as it does not account for indirect supply-chain jobs or those in local economies. A CBI Economics report found 273,000 people work directly in net zero industries, with another 678,000 jobs indirectly linked.

The insulation industry would also be decimated. Abolishing the ECO levy would, according to the Insulation Assurance Authority, endanger more than 30,000 roles across the sector. Academic studies confirm that every €1 million invested in building efficiency creates approximately 19 direct jobs. Pulling the plug would not just idle workers—it would also hollow out a vital domestic supply chain, making any future ramp-up vastly more expensive and slower.

European Backpedal: Are Diluted Net Zero Pledges the New Normal?

The UK is not alone in wrestling with the political feasibility of net zero transition. Across Europe, a growing number of governments are watering down their ambitions under pressure from industry, political rivals, and voters fearful of rising costs.

Germany has delayed major steps towards a coal phase-out, citing energy security worries after the invasion of Ukraine.

Italy has extended the life of some fossil-fuelled assets and faces resistance to upgrading the building stock.

France and the Netherlands see mounting political disputes over agricultural and industrial climate rules.

This transnational retreat risks triggering a “race to the bottom”, where climate leadership is surrendered to short-term economic fear. The net result: lower emission cuts, higher long-run bills, and even greater vulnerability to global price shocks in fossil fuels.

The Danger of Energy Dependency

Reform UK’s proposed end to new renewable investments would lock the UK into greater dependence on imported gas, leaving consumers at the mercy of global market volatility. The 2022 energy crisis slashed household incomes and forced unprecedented public spending to cap bills.

A credible modelling exercise by Aurora Energy found that replacing all Contract for Difference (CfD)-backed offshore wind with gas plus carbon capture would add £10 billion to energy system costs over a decade, sharply worsening bills for households and businesses. Similarly, the National Energy System Operator's scenarios show electricity bills could rise by £230 per household in 2030 during a gas price spike if renewables rollouts are halted, compared to current official plans.

Ironically, Reform UK’s approach risks locking in higher bills for the very households they purport to help, with poorer, poorly insulated homes hit hardest.

Those Most in Need: The End of Insulation Support

ECO4 and the GBIS are crucial for helping vulnerable and “fuel-poor” families upgrade their homes and heating systems. Without these schemes, those on low incomes face a stark choice: live in cold, unhealthy homes, or fall deeper into debt to pay their bills.

Despite rhetoric about “choice”, the overwhelming evidence is clear: without state-backed funding, very few low-income households can afford the thousands of pounds required for deep insulation work, efficient boilers, or the switch to heat pumps. As the energy transition progresses, the disparity will widen: energy bills for the better-off will fall, while the poorest are left in leaky, high-cost homes.

Worse still, the removal of subsidies would deter private investment in large-scale renewables. If the “green levy” is scrapped but funding for prior renewables contracts still must be met (as is required by law), either taxpayers or consumers will be left footing the bill—the problem will not go away, just be shifted in form. Cancelled state support for retrofit would also strand the government’s fuel poverty and decarbonisation targets.

Scrapping Net Zero: Risking the UK’s Climate Leadership

The UK became the first major economy to enshrine a net zero target in law. This leadership position enabled Britain to attract global green investment, marshal domestic expertise, and drive exports in clean tech. Reform UK’s policies threaten to blow up that reputation overnight.

Investor confidence would be shattered. Billions in domestic and overseas capital earmarked for wind, solar, battery, and grid upgrades would be diverted elsewhere—just as the world accelerates the energy transition. Long-term, rebuking net zero imperils competitiveness: jobs, productivity, and export earnings would all stutter, while economic rivals capitalise.

Current analysis suggests 67–92 billion pounds of GVA—amounting to nearly three per cent of the UK’s entire GDP—could be lost by 2030 if large-scale renewables were halted.

The Human Cost: Bills, Comfort, and Health

Far from providing meaningful relief, the abolition of green levies and investment support will trap millions in draughty, inefficient homes. The poorest will face a double whammy: little prospect of affording insulation, but higher exposure to future energy bill shocks as the UK’s dependency on expensive, internationally traded fossil fuels grows. Warm Home Discount support could also be slashed, hitting pensioners and others on fixed incomes.

The consequences for public health are profound. Cold, damp homes aggravate respiratory illnesses and mental health conditions. Fewer upgrades will mean more winter deaths, greater NHS costs, and avoidable hardship.

Conclusion: Is ECO Funding Doomed?

The future of ECO4, GBIS, and other UK energy efficiency funding is on a knife-edge. While pledges to “slash bills” by ending green levies may win short-term political support, the long-term costs—in lost jobs, missed investment, and worsened energy insecurity—are far greater.

Diluting net zero commitments, whether in the UK or across Europe, risks reversing hard-won progress on emissions and energy justice. Should Reform UK lead a government and deliver on its promises to dismantle all net zero subsidies, it’s not only ECO4 and GBIS funding that will go—it’s an entire system of support for building a fairer, greener, more resilient energy future.

For families struggling to afford to heat their homes, for workers building wind farms and fitting insulation, and for future generations facing a destabilised climate, the stakes could not be higher. The answer to whether ECO funding is doomed depends on the choices made now: funding fuel poverty, climate security, and jobs, or chasing false economies and exposing millions to needless hardship.