Green Homes Grant was 'set up to fail', damning report concludes
The National Audit Office (NAO) has released a report charting a litany of failures in the Government's plans for delivering the now-closed Green Homes Grant, revealing that £1000 is likely to be spent on administration costs for every home which received funding.
Published today (8 September), the report follows on from the closure of the scheme in March. The scheme was meant to run for six months originally, and had a budget of £1.5bn, designed to enable 600,000 UK households to improve energy efficiency.
According to the NAO, the scheme is likely to only benefit 47,500 homes – less than 9% of the promised total. The NAO report estimates that just £314m of the budget will be spent and, that for every voucher issued to a household, administration costs will total £1,000. Householders were able to claim up to £5,000, rising to £10,000 for the lowest-income homes.
All in all, the NAO has stated, the scheme was “delivered to an over-ambitious timetable and was not executed to an acceptable standard, significantly limiting its impact on job creation and carbon reduction”.
A key criticism of the scheme was that it was not developed in consultation with installers. Installers were only asked for their views, the NAO claims, after the initiative was first confirmed and launched, because staff at the Department for Business, Energy and Industrial Strategy (BEIS) was given just 12 weeks to design the scheme at a time when it was busy delivering the Covid-19 response and undertaking Brexit-related tasks.
“The Department chose to proceed to its timetable, even though none of the firms that bid for the grant administration contract thought it was possible to fully implement the required digital voucher application system in the time available,” the NAO said in a statement.
“The Department accepted that delivering the scheme within this timescale posed a high risk, but judged it was justified by the need to support businesses in the wake of the Covid-19 pandemic.”
This lack of planning meant that many installers were not accredited to deliver works valid for the scheme. The NAO has heard evidence that many installers were deterred from seeking accreditation due to high costs, for a relatively short-term scheme. Support, it has stated, would likely have been stronger for a longer-term scheme. The NAO has revealed that BEIS originally proposed a two-year scheme but had this vision rejected by the Treasury.
Households, as well as installers, found the scheme challenging to navigate, the NAO has stated. BEIS and the scheme administrator received more than 3,000 complaints about the application process from homeowners and tenants between October 2020 and April 2021.
Commenting on the NAO report, the Environmental Audit Committee’s (EAC) chairman Philip Dunne MP said: “Although established with good intentions, the Green Homes Grant voucher scheme was a policy made on the hoof without proper consultation. A lack of understanding about installer capacity and limitations in the sector from the Government, along with overambitious deadlines set by the Treasury, meant that the scheme was designed to fail to meet its ambitious targets from the outset.
“The NAO’s report is a sobering assessment of the failures in the scheme, which might otherwise have kick-started the drive to tackle the 20% of emissions emanating from the country’s housing stock. I hope the Government will swiftly learn from the errors made in the design and execution of the Green Homes Grant voucher scheme.
“As my committee has consistently advocated, I trust Ministers will now introduce a simpler scheme of much longer duration, in which both contractors and consumers can have confidence, so we can accelerate our efforts to adapt our homes to achieve net-zero Britain.”
Since the Green Homes Grant scheme closed, the Government has confirmed that £500m originally earmarked to the scheme will go to English and Scottish Councils directly, enabling them to deliver their own home retrofit schemes.
However, groups representing industry, consumers and the green economy have continued to put pressure on BEIS to deliver longer-term plans, consistent with the Conservative Party’s commitment to spend £9.2bn on improving energy efficiency this Parliament.
The answer to these calls to action is likely to come through the Heat and Buildings Strategy. Originally due ahead of Parliament’s summer recess, the Strategy is now expected ahead of COP26 in November, with reports that it may come before the end of September.
Think-tank IPPR has today added to the pressure, releasing an analysis claiming that the UK is only installing 6% of the number of heat pumps annually to meet the Government’s own climate targets, and ambition for 600,000 homes to host heat pumps by 2028. The proportion stands at 9% for cavity wall insultation projects and just 3% for loft insulation projects.
The publication of the analysis is being used to re-iterate the organisation’s own proposals for a “big and bold” long-term strategy. IPPR is recommending that the government should directly fund an average investment of £6bn a year into the scheme between now and 2030. It is also calling for better considerations on communications and scheme accessibility, as well as place-based upskilling plans
At the same time, it wants to see improved standards for home heating systems and clarity on timelines for phasing out domestic fossil fuel heating. The Climate Change Committee (CCC) has recommended that gas boilers are banned in homes from 2035; IPPR is pushing for 2033.
“Our research shows that people are very aware of the need for action on climate change, but are unsure what that means for their heating and are worried about the costs and performance of new technologies,” IPPR research fellow Joshua Emden said. "This is why it is so critical that the government is clear on what’s needed, clear on the benefits of low-carbon heating and clear on the financial support available.”