Local Authorities on the front line of tackling cold homes can now apply for their share of a £25 million Central Heating Fund, the Energy and Climate Change Secretary Ed Davey has announced.

The money is expected to help up to 8,000 fuel poor homes living off the gas grid stay warmer for less, through the installation of complete first-time central heating systems.

New details have also been unveiled of the £1 million warmth-on-prescription fund that will boost nine local authorities in their efforts helping people in fuel poor households whose health is affected by cold homes. Schemes such as the Dudley Winter Warmth Support Service will improve around 180 fuel-poor households by installing a range of energy efficiency measures. Meanwhile, the Warm and Healthy Homes Programme in Durham will provide essential training to over 100 health and social care professionals to ensure fuel poor households are identified and supported.

Energy Secretary Ed Davey said: "The heat is on for warmer, healthy homes. Today's £25 million competition will go further to help thousands more. Fuel poverty has fallen every year since 2010, however there are still too many people affected by it. That is why we have introduced an ambitious Fuel Poverty Strategy and are mobilising front-line services to innovate how we identify and target those living in cold homes."

Rachel Fisher, head of policy at the National Housing Federation, said: "A much-needed long term plan to end the housing crisis within a generation shouldn't just address the chronic shortage of new homes, but also bringing empty homes back into use and improving the quality of existing homes.

"DECC's new £25 million Central Heating Fund provides a unique opportunity to improve the quality of life of thousands of tenants by lifting them out of fuel poverty with the installation of new heating technologies, including renewable heat. We would encourage housing associations to take an in-depth look at this funding to see how they can use it to make the most lasting impact."

BEAMA's Ask for Underfloor campaign welcomed the news. Colin Timmins said: "This initiative provides much needed funds to help improve the standard of living for thousands of people. As the scheme is for first-time central heating systems, there is the potential for underfloor heating to be considered. Water-based underfloor heating runs at a lower temperature compared to other heating systems and is compatible with heat pumps or boilers, making it an ideal option for fuel poor homes.

"Underfloor heating is more efficient, provides a superior level of comfort and is more cost effective than other heating options. With that in mind, we would urge housing associations and Local Authorities to consider underfloor heating when taking advantage of the Central Heating Fund. Not only would it provide tenants with comfort and health benefits, it would also help them control their energy bills."