Government pulls plug on Green Deal ‘to protect taxpayers’
The Government's Green Deal energy efficiency loans scheme is to close in light of "low take-up and concerns about industry standards."
The Green Deal Finance Company – the organisation which provides the loans that underpin the scheme – is to receive no further funding, DECC has confirmed today (23 July).
Energy Secretary Amber Rudd has also announced that the Government will top any future funding of the Green Deal Home Improvement Fund, which gave households cash back on energy efficiency improvements.
Rudd said: “We are on the side of hardworking families and businesses – which is why we cannot continue to fund the Green Deal. It’s now time for the building industry and consumer groups to work with us to make new policy and build a system that works.
“Together, we can achieve this Government’s ambition to make homes warmer and drive down bills for one million more homes by 2020 – and to do so at the best value for money for taxpayers.”
The Government’s other energy efficiency policies including the Energy Company Obligation (ECO) scheme will continue to operate, and DECC says it will work in partnership with the Department for Communities and Local Government to improve the UK’s existing housing stock.
“The longer-term future of the Energy Company Obligation scheme will be part of these discussions around a new, better-integrated policy,” DECC said.
The Department has commissioned an independent review led by Peter Bonfield, chief executive of the BRE Group, to look at standards, consumer protection and enforcement of energy efficiency schemes and ensure that the system properly supports and protects consumers.
Battered & bruised
Responding to today’s announcement, Julie Hirigoyen, chief executive of the UK Green Building Council, said: “With each passing day, this Government puts an end to another green policy. Government’s strategy on dealing with high energy bills through home energy efficiency is now dead in the water.
“While the Green Deal was by no means perfect, the principle of enabling households to install energy saving measures without paying upfront costs was sound. The irony is that the scheme was finally becoming established and the number of plans was growing.
“This is yet another announcement with no forewarning that will leave the energy efficiency industry battered and bruised.”
The Green Deal has been a failure. But now the govt have killed it completely. Gonna be a cold winter for some pic.twitter.com/eceBv73vzw
— Guy Shrubsole (@guyshrubsole) July 23, 2015
The much-criticised Green Deal scheme, which launched in 2013, fell well short of its initial target of signing up 10,000 households in its first year of operation. But the market did begin to pick up, and by the end of June 2015, measures had been installed in around 10,000 properties using Green Deal finance, with an additional 5,600 Green Deal finance plans currently in progress.
The Green Deal scheme was expected to play an integral part in the new Government’s energy efficiency strategy, after the Tories pledged to deliver energy efficiency upgrades to one million households over the course of the Parliament.
Speaking in her first Select Committee hearing earlier this week, Rudd said energy efficiency was a “win-win” as the most effective way to reduce carbon and reduce bills.
“I’m particularly ambitious in this area and I want to put together a long-term framework for homes and fuel poverty,” Rudd said. “I’m looking at the various initiatives that have been in place under the last Government to find out which ones are working best and which ones have not worked well, so that we can work with industry to design a system that will deliver most cost effectively.
“I’m hoping to come forward with some new announcements in this area in the autumn.”
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