The UK’s ambition to reach net zero by 2050 through large-scale housing retrofits is currently off track across most regions. The analysis shows that, at today’s pace of delivery, particularly for social housing retrofits, many regions are unlikely to meet the EPC Band C target, underlining the need for a significant acceleration in both investment and delivery capacity.

Using City-REDI’s SEIM-UK multi-regional input-output (MRIO) model, the analysis estimates the scale of investment required under three pathways:

• Business as Usual: Retrofitting continues at its current pace. Under this trajectory, the West Midlands is unlikely to meet the net zero target by 2050.
• Net Zero by 2050 Scenario:  This scenario assumes the region aligns with the national target of achieving net zero by 2050.
• Net Zero by 2040 Scenario: An accelerated pathway in which the West Midlands achieves net zero a decade earlier.

To assess the importance of place-based supply chains, each scenario is modelled under two alternative procurement approaches:

• Hands-off procurement: No policy intervention to steer contracts towards local or regional suppliers.
• Local procurement: A place-based strategy in which supply chains are increasingly localised to maximise regional economic retention and spillovers.

The results show that procurement strategy is as important as the scale of investment.

• Business as Usual: Local procurement increases West Midlands impact from £1.1bn to £4.9bn in output, from £0.4bn to £2.8bn in GVA, and from 7,000 to 29,000 jobs.
• Net Zero by 2050: A hands-off approach delivers only £3.7bn output and 22,000 jobs to the West Midlands, compared to £16.3bn output, £10.4bn GVA, and 96,000 jobs under local procurement.
• Net Zero by 2040: Regional benefits rise from just £4.2bn output and 25,000 jobs (hands-off) to £13.9bn output, £8.0bn GVA, and 83,000 jobs with local procurement.

Overall, the results show that where the supply chain is located matters as much as how much is spent. Without deliberate place-based procurement, a large share of the economic value of retrofit investment leaks out of the region. The ability to realise these gains depends on the region’s absorptive capacity, including its skills base, supply-chain depth, and innovation capability. This points to the need for a more integrated policy approach that aligns procurement, skills investment, supply-chain development, and green innovation, ensuring that retrofit delivery produces sustained economic, social, and environmental returns, alongside carbon reduction. A detailed version of the analysis, including methodology and full results, is available in the full report here.

Place-based Public Procurement for a Low-Carbon Future: Regional Economic Impacts of Retrofitting

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