The government’s decision to scrap the Green Homes Grant has been branded a “travesty” that would damage the UK’s progress towards net-zero by property and energy efficiency experts.
Launched in September, the Green Homes Grant was allocated £1.5bn to retrofit 600,000 homes by issuing vouchers to homeowners to pay for energy saving measures. Just 39,000 vouchers were issued, and the government estimated the value of issued vouchers totalled £300m – a fraction of the initial target.
Despite previously extending the deadline to apply for a Green Homes Grant to March 2022, the government announced on 27 March that, following a review, it would end the scheme four days later on the 31st.
In its place, the Department for Business, Energy & Industrial Strategy launched a £300m scheme that allows local authorities to bid for funding to retrofit homes.
Julie Hirigoyen, chief executive of the UK Green Building Council, said: “Slashing more than £1bn in funding for energy efficiency is an absolute travesty for households wanting to take action and for businesses trying to plan ahead, and has created yet another roadblock for decarbonising the country’s 29 million homes.”
She said UKGBC had been “left speechless” by the announcement, which came just days after the Environmental Audit Committee warned that reaching net-zero is impossible unless urgent action is taken on energy efficiency.
The committee’s report, Energy Efficiency of Existing Homes, said the Green Homes Grant had been welcome but laden with bureaucracy, which ultimately meant some businesses had to lay off staff to cover a loss of income as a result of the scheme.
However, the EAC recommended that the unspent funding allocated to the Green Homes Grant be rolled over.
Problems should have been addressed
In February, the EAC in a separate report said it would take 10 years for the Green Homes Grant to meet the government’s 600,000 home target, but that it had “good potential” as long as it had a radical overhaul.
It highlighted a lack of skills in the industry and a shortage of accredited engineers to carry out retrofits, adding that upskilling and certification would take time. As a result, it recommended that Chancellor Rishi Sunak announce a “material, multi-year” extension to the Green Homes Grant scheme in the March budget.
Although the scheme had problems, the Federation of Master Builders said the government should have worked to fix those rather than scrapping it entirely.
Brian Berry, CEO of the FMB, said: “Flaws with the scheme should have been addressed, in consultation with industry, with a commitment to training. Instead we have another example of a stop-go green initiative that undermines, rather than creates, certainty for both the public and installers.”
He added: “The misguided scrapping of the Green Homes Grant scheme sends entirely the wrong message to consumers and builders, and will harm the UK’s desire to be seen as a global leader in tackling climate change.”
The decision sparked concerns given its timing: being seen as a global leader in sustainability is high on the government’s agenda with the UK hosting COP26, the UN’s Climate Change Conference, in November.
Hirigoyen said: “In the year of the UK hosting COP26, this is not the sort of example we want to be setting for the world – a lesson in precisely how not to do policy making in this vital sector.
“With a stream of crucial policies coming down the pipeline for construction and property in the next few months and years, lessons must be learnt as soon as possible and these mistakes not repeated.”
What the government has promised
Announcing the new £300m local authority-led scheme, Business and Energy Secretary Kwasi Kwarteng said: “Upgrading the country’s homes with energy efficiency measures means we can cut emissions and save people money on their energy bills.
“Today’s funding boost will mean even more households across England are able to access these vital grants through their local authority.
“This latest announcement takes our total energy efficiency spending to over £1.3bn in the next financial year, giving installers the certainty they need to plan ahead, create new jobs and train the next generation of builders, plumbers and tradespeople.”
In a statement released on Saturday, BEIS said the Green Homes Grant scheme was designed to provide a “short-term economic boost while tackling our contribution to climate change”.
Applications made before the end of the March deadline will be honoured and any vouchers already issued may be extended upon request.
It added that the original £500m council-led Green Homes Grant Local Authority Delivery Scheme launched last year – which was separate from the £1.5bn Green Homes Grant voucher scheme – has already helped 50,000 households improve their homes’ energy efficiency.
Emma Pinckbeck, CEO of trade body Energy UK, said: “It’s good to see the Government recognise that energy efficiency is critical to delivering their own net-zero target, and that the local authority scheme under the Green Homes Grant was working well.
“However there was real enthusiasm from the public for the Green Homes Grant, and scrapping it before it got off the ground will undermine trust. Secondly, £300m is not enough to close the gap with the Government’s own net-zero target.
“We must see further action if we are to decarbonise our homes so we hope to see bold commitments in line with the scale of the challenge in the forthcoming Heat and Buildings Strategy.”
The Heat and Buildings Strategy will set out the UK’s roadmap to reduce emissions from buildings to enable a “mass transition” to low-carbon heat. Publication is expected in the near future, but the government has yet to confirm a date.