Evaluation of Welsh Housing Quality Standard 2023 and Optimised Retrofit Programme: summary

Alma Economics was commissioned by the Welsh Government to conduct comprehensive evaluations of the WHQS 2023 and ORP. Both evaluations explored the experiences of social landlords and social housing tenants to understand how the initiatives were implemented and their perceived impacts. In addition, a Value for Money (VfM) analysis was undertaken as part of the ORP evaluation to assess the cost-effectiveness of ORP 3, going beyond perceived impacts to examine measurable outcomes and costs.

WHQS 2023 is a national standard designed to ensure that all social housing in Wales provides a good level of quality, safety, comfort, and energy efficiency. First introduced in 2002 and fully achieved by 2022, the Standard was revised in 2023 to reflect new priorities, including energy and water efficiency, flooring, active travel, and noise nuisance. The updated Standard introduces enhanced reporting requirements and a phased implementation timetable, with milestones in 2025 and 2027 and full compliance required by 31 March 2034.

ORP is a Welsh Government grant programme intended to support social landlords to improve the energy efficiency of their housing stock through a test-and-learn approach. Delivered in successive phases, ORP 3 focuses on insulation upgrades, smart energy systems, and environmental monitoring technologies, supporting delivery of the energy efficiency and decarbonisation requirements set out in WHQS 2023 Part 3 (“Affordable to Heat”). In addition to improving housing outcomes, ORP aims to support organisational learning and contribute to wider economic and skills development.

While the WHQS 2023 and ORP evaluations were undertaken separately, fieldwork was combined where possible to minimise burden on stakeholders and enable synthesis across programmes.

The evaluation adopted a theory-based, mixed-methods approach, informed by realist evaluation principles. This approach focused on understanding not only whether WHQS 2023 and ORP are achieving their intended outcomes, but also how, for whom, and under what conditions impacts are occurring. Two Theories of Change (ToCs) – one for WHQS 2023 and one for ORP – were developed during a scoping phase and used to guide data collection and analysis.

The research comprised a desk-based review, scoping interviews, and primary data collection through surveys, interviews, and focus groups with social landlords and social housing tenants. Social landlord engagement included a survey completed by 32 organisations and 15 in-depth interviews. Tenant engagement included a WHQS tenant survey (1,285 responses), an ORP tenant survey (274 responses), and qualitative interviews. In total, 45 tenants participated in interviews or focus groups relating to WHQS 2023 between June and October 2025, while four tenant interviews were conducted specifically for ORP.

A Social Cost-Benefit Analysis (CBA) was conducted specifically for ORP 3, in line with HM Treasury’s Green Book guidance. The CBA assessed costs and benefits over a 30-year appraisal period and focused on Package 2 (PV and battery systems), Package 4 (fabric-first measures), and their combined delivery. Two counterfactuals were tested: a static “no intervention” scenario and a delayed rollout scenario in which retrofit activity occurs gradually over 20 years. Sensitivity analysis explored alternative assumptions, including different health valuation methods, wellbeing impacts, and longer health benefit durations.

WHQS 2023 findings

Demands on social landlords

Findings indicate that WHQS 2023 places substantial demands on social landlords. The energy efficiency and decarbonisation requirements set out in Part 3 are seen as the most challenging aspect, particularly in relation to longer-term targets such as achieving SAP 92/EPC A across entire housing portfolios. While the rationale for high standards was widely supported, landlords reported that the pace and scale of ambition were, in some cases, perceived to outstrip available capacity.

Constraints and progress

Main constraints include financial pressures, uncertainty around funding for decarbonisation, shortages of trained and accredited personnel, and administrative complexity associated with compliance reporting. Despite these challenges, awareness of WHQS 2023 among landlords is high, and steady progress is evident in areas aligned with existing maintenance and investment cycles, including safety, security, kitchens, bathrooms, and flooring, with social landlords also reporting making initial steps in meeting the new energy efficiency and decarbonisation requirements. Whole Stock Assessments and Targeted Energy Pathways have also helped clarify routes to compliance.

Tenant engagement and experiences

Tenant awareness of WHQS 2023 is low, with most tenants unaware of the Standard itself. However, tenants reported interest in improvements that enhance comfort, affordability, and health, and generally perceived WHQS-related works positively. Tenants highlighted a lack of proactive communication and expressed a desire for clearer information before, during, and after works.

Decarbonisation impacts

The updated Standard is widely regarded as essential in driving energy efficiency and decarbonisation activity that would otherwise have progressed slowly if at all. Landlords reported that new roles, systems, and investment plans have been developed specifically in response to WHQS 2023 requirements.

ORP findings

Accessibility and organisational learning

ORP is generally perceived as accessible and well-supported. Social landlords reported positive experiences engaging with Welsh Government officials and highlighted the value of ORP in building organisational capacity, enabling testing of retrofit approaches, and supporting alignment with WHQS 2023. However, the one-year funding cycle of ORP is thought to constrain planning and delivery capacity and place an additional administrative burden on social landlords.

Value for money

The CBA demonstrates that ORP 3 delivers strong value for money across all packages and scenarios tested. Packages 2, 4, and their combined delivery consistently achieve Benefit-Cost Ratios at or above 1.9, even under conservative assumptions. The largest share of benefits arises from improved physical health outcomes, followed by energy savings and carbon reductions. Earlier delivery through ORP 3 generates substantially higher present-value benefits than a delayed rollout.

Implementation challenges

The principal challenge relates to ORP’s annual funding cycle, which can constrain planning, procurement, and delivery. Administrative requirements linked to PAS 2035 and TrustMark also impose time and cost burdens, and in some cases limit landlords’ ability to access monitoring data and fully capture learning. In several instances, ORP funding was used primarily to meet mid-term environmental targets of WHQS 2023, such as installing solar PVs without batteries, with limited direct benefits for social housing tenants.

Tenant experiences

Tenant experiences of ORP-funded retrofits were mixed. While some installations were delivered smoothly, others involved disruption and limited communication. A consistent issue was the lack of information provided on how to use new technologies following installation.

Conclusions

WHQS 2023 provides strategic clarity but places significant demands on delivery capacity.

Social landlords broadly support the ambition and direction of the updated Standard, particularly its emphasis on energy efficiency and decarbonisation. However, the scale and pace of requirements – notably SAP 92/EPC A targets – place substantial pressure on financial resources, workforce capacity, and delivery systems. While progress is evident, particularly where requirements align with business-as-usual activity, landlords reported that ambition may in some cases be outpacing capacity.

Progress is being made, but risks to consistent delivery remain.

Whole Stock Assessments and Targeted Energy Pathways have improved strategic planning and clarity. However, uncertainty around funding, shortages of accredited staff, and administrative complexity – including evolving reporting and compliance requirements – risk slowing progress and increasing delivery risk if not addressed.

Tenant engagement remains underdeveloped.

Tenant awareness of WHQS 2023 is low, despite generally positive experiences of completed works and reported benefits to comfort, affordability, and wellbeing. Tenants expressed interest in improvements but highlighted limited communication and involvement, suggesting a gap between landlord perceptions and tenant expectations that may limit the full realisation of programme benefits.

ORP delivers value for money and accelerates benefits.

The cost-benefit analysis shows that ORP 3 consistently delivers value for money across packages and scenarios tested, even under conservative assumptions. Health improvements are the largest source of quantified benefits, supported by energy savings and carbon reductions. Earlier delivery generates substantially higher present-value benefits than a delayed rollout, demonstrating the importance of timing in maximising value.

Delivery and learning mechanisms constrain ORP’s full potential.

While ORP is widely valued as a test-and-learn programme, its annual funding cycle and associated administrative requirements create planning and procurement challenges. Landlords also reported limits in accessing and using monitoring data, constraining learning and evidence sharing over time.

Recommendations

To strengthen delivery and maximise impact, the evaluation recommends:

• introduce a standardised compliance policy template: Provide a structured framework for compliance policy submission, ensuring consistency across landlords, and minimising administrative burden
• enhance guidance for statistical returns by clarifying the required data, level of detail, and submission format, supporting accurate reporting
• streamline WHQS reporting and compliance requirements by providing clearer, more stable guidance and a structured reporting framework, reducing administrative burden and supporting consistent delivery
• adopt a more graduated approach to Part 3 progress, assessing improvement across housing stock over time rather than relying on binary end-point targets, while maintaining long-term ambition
• secure longer-term and expanded funding for retrofit and decarbonisation, building on the demonstrated value for money of ORP to enable strategic planning and scaled delivery
• invest in workforce capacity and accreditation, including targeted support for training and TrustMark/PAS 2035 compliance, to address delivery bottlenecks
• strengthen tenant communication and engagement, ensuring tenants are informed, supported, and able to benefit fully from retrofit works and new technologies
• reinforce ORP’s test-and-learn function by prioritising outcome-based monitoring, improving access to data, and increasing visibility of lessons learned and case studies

Report author: Alma Economics

Views expressed in this report are those of the researchers and not necessarily those of the Welsh Government.

For further information please contact:

Social Research and Information Division
Welsh Government
Cathays Park
Cardiff
CF10 3NQ

Email: HousingResearchTeam@gov.wales

Social research number: 62/2026
Digital ISBN: 978-1-83745-381-8