Why is the UK’s Green Homes Grant Scheme failing to deliver?

UK's green homes, green
© Elena Rostunova

Homes account for just under 30% of energy use and around 20% of greenhouse gas emissions in the UK – what does this mean for the UK’s Green Homes Grant Scheme?

It is one of the few sectors where emissions reductions have stalled so the government introduced a Green Homes Grant Scheme and allocated a budget of £1.5 billion for the fiscal year 2020-21.

The scheme opened for applications on 30th September 2020, allowing homeowners and landlords to apply for vouchers to pay for green improvements such as loft, wall and floor insulation.

The scheme states that: “The Green Homes Grant Scheme is only available to homeowners and residential landlords. Vouchers will cover two-thirds of the cost of eligible improvements, up to a maximum government contribution of £5,000. If you, or someone in your household, receive certain benefits you may be eligible for a voucher covering 100% of the cost of the improvements. The maximum value of the voucher is £10,000.”

6.3% of the £1.5 billion budget has been spent

However, according to recent government data, just 6.3% of the £1.5 billion budget for the Green Homes Grant scheme in 2020/21 has been spent and 86% of homeowners reported having a ‘poor experience’ with the application process.

The Environmental Audit Select Committee admitted that the scheme needed to be “urgently overhauled” at the same time as admitting that any money not spent on the scheme will not be rolled over to next year, with a budget of just £320 million allocated for the fiscal year 20121-22.

In response to written parliamentary questions, Energy Minister Anne Marie Trevelyan revealed that: “As of 8th February, 71,953 applications have been received for the Green Homes Grant Voucher Scheme, with 22,165 vouchers having been issued to customers. The value of these vouchers is currently £94.1 million.”

However, a quick calculation reveals that at the current rate it would take 10 years to fulfil the government’s promise of the grants helping 600,000 householders implement the carbon reduction measures envisaged when the scheme was approved.

‘A short-term stimulus’

The Energy Minister commented: “The original funding for the Green Homes Grant Voucher Scheme was announced as a short-term stimulus, for use in the 2020/21 financial year only. In the 2020 Spending Review, my Rt. Hon. Friend Mr Chancellor of the Exchequer announced £320 million of funding for the Green Homes Grant Voucher Scheme for 2021/22, as part of funding allocated to make homes and buildings more energy efficient and less carbon intensive.”

In its report, the Environmental Audit Committee said: “In November 2020 we conducted a survey to find out how easy it had been for home improvers to access. In total, 510 people responded to the survey. Alarmingly, 86% of those responding to the survey had had a poor experience with the process, although just over half applying had found the Green Homes Grant eligibility calculator helpful. The eligibility criteria, however, prevented many from being able to access vouchers for the measures they required: homeowners must install primary measures before receiving the same funding towards secondary measures.”

“We welcome the intention behind the Government’s Green Homes Grant. It is disappointing that the administration of the scheme appears to be putting green jobs at risk, rather than creating them. Delivery has been poor for consumers and has led to perverse consequences for installers, and the scheme remains too short-term to have any prospect of achieving its initial targets. We recommend that the Green Homes Grant scheme be urgently overhauled and extended to provide greater long-term stimulus to the domestic energy efficiency sector.

“The Government must be mindful not to repeat the mistakes of the failed Green Deal energy efficiency incentive scheme.”

Will this plank of the 10 point plan hold?

This scheme was promoted by Boris Johnson as a key plank in his 10 point plan for a green recovery. The government promised the programme would support 100,000 jobs while cutting people’s energy bills and CO2 emissions.

To date, it is failing miserably and the news that the unspent hundreds of millions of pounds would not roll over into the next fiscal year has angered many in the renewable energy industry.

Chris Hewett, the chief executive of the trade association Solar Energy UK, said removing the money “would be an alarming early failure of the government’s 10-point plan for a green recovery, transforming a flagship policy into something tokenistic.”

The shadow business secretary, Ed Miliband, said “It is outrageous that the government is withdrawing funding promised to help insulate people’s homes,” he said. “They are denying homeowners the energy improvements they need, denying installers the work they need and denying the country the green transition we need.”

Miliband said mismanagement of the programme meant just a fraction of the billions was now going to be spent. “Ministers must make good on their funding promise and reverse this farcical decision by rolling all the funds not allocated over into 2021,” he said.

Are these climate goals impossible to achieve?

It has also been revealed that Ministers awarded the contract to run the programme to ICF, a large American consulting corporation based in Virginia, but details of the value of the government contract have not yet been published, leading to widespread criticism and anger that a key plank of the plan was to create work and jobs for the UK, not US economy.

The government has been somewhat quiet on the reasons for this failure, with muted claims of the lack of qualified installers being available to carry out the work. This only fuels further criticism of the scheme and the government, because it seems they have entered into this scheme without the means to deliver it.

It also begs the question – how much more of the government’s net zero 2050 strategy is just flashy public relations masking poorly thought out policies, making the goals simply impossible to achieve?

2 COMMENTS

  1. In the hope that someone relevant may read this and understand the problems with the scheme, here are the issues I’ve encountered as a homeowner who’s wasted many hours trying to use it.

    1. Go on Trustmark and search for e.g. wall or roof insulation. You will find enormous black holes in coverage. For example, astonishingly, the entirety of South London as far as the M25 has either 0 or 1 registered contractor for pretty much all key services.

    2. Go on the website of any contractor you find. Given the vast imbalance in supply vs demand, many contractors are not even accepting applications.l because they’re too busy.

    3. If they are accepting applications, try contacting them. You often won’t get a response – because they’re so busy.

    4. If you do get a response, it will often simply be to say that quotes, surveys etc are currently impossible due to backlogs and/or Covid.

    5. Several suppliers I did reach told me they weren’t using the scheme any more because it wasn’t working properly – bureaucracy, crazy rules, unpaid invoices for months.

    6. If you get past this, you will find yourself up against these often badly thought out rules. My property is a flat with a built on extension. This slightly non standard setup has made everything vastly complicated in a system clearly designed with only houses in mind, leaving big chunks of the UK’s housing stock outside effective scope for arbitrary reasons.

    Overall, hopefully it’s clear that execution has been fundamentally flawed from end to end. But with a sustainable scheme that ran properly with sensible rules that signed up enough contractors, there is a clear and obvious case. We can dream…

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