By Kevin Clarke, Account Delivery Manager at Procure Plus
The end of Energy Company Obligation (ECO) funding has marked a turning point for the retrofit market. In December 2025, the government confirmed that the ECO4 scheme would end on 31 March 2026, giving organisations notice that a major source of work was coming to an end.
The Department for Energy Security and Net Zero (DESNZ) has since introduced a nine-month extension, allowing time for remediation work and an orderly closure of the programme by 31 December 2026.
For businesses built around ECO, the announcement created considerable uncertainty about what would come next, particularly with no successor programme or direct replacement in place.
ECO funding and a changing landscape
We recognise that ECO funding had its flaws. Its relatively loose structure allowed some organisations to take advantage, providing lessons for how future funding programmes should be designed and delivered.
However, many organisations relied on ECO funding for their work. It was not just smaller, specialist businesses. Even some of the larger organisations in the sector delivered significant volumes of work through the ECO scheme. With funding withdrawn and no immediate replacement, many have understandably looked elsewhere.
As a framework provider, we’ve seen a shift towards social housing and DESNZ-funded work as businesses look to maintain their pipelines and keep their teams active. This has created a new challenge, with predominantly ECO-focused organisations now competing against firms with a stronger track record in retrofit delivery for housing associations and local authorities across multiple funding streams.
Working with councils and housing providers requires a particular understanding of procurement, resident engagement, programme management, and delivery. Arguably, it is a different skillset and ethos from what ECO-focused organisations are used to.
The combined authorities we’ve worked with, including Liverpool City Region, West Midlands and Greater London, have supported this transition by engaging with the supply chain and highlighting available opportunities to ECO firms.
Importantly, they have taken a forward-thinking approach, recognising that genuine opportunity exists beyond any single funding stream and encouraging organisations to build resilience rather than dependency on one source of work.
A competitive market
Growing experience in delivering retrofit programmes means clients can increasingly distinguish between organisations that simply deliver measures and those that understand what makes schemes successful. Good procurement can draw this out through the quality assessment process.
For firms entering the social housing and local authority market, this creates a significant competitive challenge. We’ve seen this directly in our own tender activity.
Following the ECO announcement, we anticipated three to five bidders on social housing fund schemes based on historic patterns. Instead, some attracted more than 30 bids. Despite the efforts of the combined authorities, the first half of this year has seen a genuinely saturated market across our tenders.
This is not necessarily reflected nationwide. Organisations in the North East, for example, report the opposite problem which is a lack of bidders altogether. The competition varies significantly by region.
Framework activity tells a similar story of intense competition. Our Supply of Low and Zero Carbon Technologies Framework, which went live last year, attracted more than 200 applications and has become one of our most contested frameworks.
For housing providers, flexible routes to market such as the Procure Plus Retrofit Dynamic Purchasing System, now with more than 140 organisations on it, and new frameworks can maintain access to a broad supply chain and SMEs while enabling faster procurement.
More importantly, retrofit needs to become part of long-term asset management and investment strategies. Funding will change, as we’ve already seen, but the need to improve housing energy performance will not. Funding uncertainty risks weakening the supply chain needed for future programmes, so housing providers should look beyond individual funding schemes and make retrofit part of business as usual.
There is also growing demand for direct framework selections, as organisations need to move quickly and want to avoid lengthy procurement processes now that we are mid-funding stream.
The wider retrofit market and workforce
Ultimately, the biggest concern is what the end of ECO funding means for the people behind the industry.
It is a real shame to see uncertainty in the labour market at a time when retrofit was, and still is, gaining momentum with more retrofit work being delivered. This makes it essential that we attract new talent into the sector so the industry can keep innovating and scale up delivery to meet demand.
Skills and career development need to be central to this. Retrofit requires a workforce with the right technical skills alongside an understanding of the challenges in delivering work in occupied homes and wider housing programmes. Losing skilled people to short-term uncertainty risks making it harder to rebuild capacity when demand returns.
There are positive signs that the sector is responding. New courses, qualifications and training opportunities are helping to create clearer routes into retrofit and broaden the skills available – in line with Prime Minister Andy Burnham’s skills agenda.
At Procure Plus, we’re supporting this through our Onsite Experience Hub with CITB, which is helping to create a strong pipeline of site-ready workers to meet the needs of local employers while opening up more constructions career opportunities for people.
While the end of ECO has created disruption and intensified competition, it doesn’t have to signal the end of retrofit growth. This period of change is an opportunity to build a more capable, sustainable sector that is less dependent on a single funding stream.
What the sector needs now is stability, investment in skills, and clear and accessible routes to market. Getting that balance right will determine whether this period is remembered as a necessary reset or a missed opportunity for the sector.