By Jessica Shankleman and Olivia Rudgard The UK is considering cuts to its flagship program to upgrade millions of homes, as it seeks more than £2 billion ($2.6 billion) in energy-department savings to help fund higher defense spending. The £15 billion Warm Homes Plan is among the programs being examined for cuts, according to a person familiar with the discussions.

Carbon capture and storage is also a target for savings, while spending on hydrogen is under scrutiny, according to another person familiar, who asked not to be identified discussing a confidential matter. No final decisions have been made, and the eventual package could change as officials work through options ahead of the Oct. 28 budget. The plan to improve the energy efficiency of as many as 5 million homes by 2030 was only announced in January, but all government departments must contribute 1% of their capital spending budgets to fund defense investments in response to the Iran war.

The Department for Energy Security and Net Zero has been asked to find an additional £2 billion of savings by the end of the decade.

Desnz has one of the largest capital budgets in Whitehall, reflecting the huge sums committed to Britain’s energy transition. Many of those spending plans stretch over several years, giving officials scope to reduce or delay future spending rather than cancel projects. The savings are a small part of Desnz’s overall budget, which saw a significant uplift at last year’s spending review, a spokesperson for the department said.

The new Secretary of State for Energy Security and Net Zero Miatta Fahnbulleh faces the dilemma of having to trim one of the main policies designed to achieve her key priority of cutting household bills by reducing energy consumption. UK Energy Secretary Says Cutting Power Bills Is ‘Top Priority’ Launched in January under her predecessor Ed Miliband, the Warm Homes Plan promised to upgrade as many as 5 million homes by 2030, with the addition of better insulation, solar panels, batteries and heat pumps. Its original planned budget of £13.2 billion was expanded to £15 billion after last year’s spending review.

Now, the areas most likely to see cuts are those with higher-income households, while those supporting lower-income homes would likely be protected, one of the people familiar said. The potential cuts would come days after Fahnbulleh put the program at the heart of the government’s new affordability and local-control agenda.

At the Labour Party conference in Liverpool on Monday, she promised to hand billions of warm homes spending to local governments and mayors as part of Prime Minister Andy Burnham’s devolution agenda.

Carbon capture and storage is particularly vulnerable to cuts, one of the people said. It’s one of Desnz’s biggest spending commitments, with £9.4 billion of capital funding allocated in last year’s government spending review.

The money is mainly aimed at building the East Coast and HyNet clusters, which seek to take carbon dioxide from industrial sites and transport it for permanent storage under the North Sea and Irish Sea. The government has separately committed more than £2 billion of support over 15 years for 11 green hydrogen projects, with further support planned. Hydrogen spending is already running behind schedule.

Desnz recorded a £29 million underspend last year because of delays to its second allocation round and hydrogen transport and storage program. The scrutiny of Desnz spending comes as Burnham’s new government redirects money from other climate commitments toward domestic priorities. Days after taking office, Burnham said he will use money allocated to helping poor countries deal with the worst impacts of climate change to fund a new cap on bus fares across England.