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News: Hopeless - Finance watchdog slams governmentís Green Homes Grant

Wed, 08 Sep 21

The government’s Green Homes Grant Voucher Scheme - which left thousands of landlords in the lurch when it collapsed earlier this year - has been slammed in a report by the National Audit Office.

The NAO says 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.”

The government announced in March that the £1.5 billion Green Homes Grant programme - which was for landlords and owner occupiers - would end with almost no notice. 

At its launch in September 2020, it offered landlords and other home owners up to £5,000 funding, or £10,000 for low-income households, for the installation of energy efficient improvements.

The government originally expected the scheme to support up to 82,500 jobs over six months, and enable up to 600,000 households to save up to £600 on their energy bills. 

The scheme did not deliver the expected number of energy efficiency home installations, nor support the expected number of jobs. 

In total, the government estimates that it will spend £314m of the £1.5 billion funding available, of which £50.5m - the equivalent of more than £1,000 per home upgraded - is on administration. It forecasts that the scheme will eventually support efficiency measures in 47,500 homes, and create up to 5,600 jobs over 12 months.

Many landlords, home owners and installers had a poor experience using the scheme. 

There were delays issuing vouchers to homeowners and paying installers, causing frustration. Homeowners also found it challenging completing applications, and were often asked for more information, which took time. From October 2020 to April 2021, over 3,000 complaints were made.

The NAO report says the inefficiency of the scheme was compounded by government work on the pandemic and Brexit. 

The report goes on to says that the Department for Business, Energy & Industrial Strategy

did not sufficiently understand the challenges facing installers, failing to learn from its own previous energy schemes. 

The department only consulted with installers after the scheme was announced, which limited the opportunities to include installer views in the scheme design. The costs of installer accreditation and the short duration of the scheme when it was first announced (six months) deterred some installers from participating.

The scheme focused on measures that would provide the biggest impact on reducing carbon, such as insulation and low-carbon heat installations - however, these require specialist skills to install, which meant it took some time for employers to take-on and train staff. 

“Jobs might have been created more quickly in areas that require less specialist skills, such as window and door installation. The initial plan for a two-year scheme would have allowed more time for jobs to be created, but this was rejected by HM Treasury” says a statement from the National Audit Office.

Instead, 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. 

 

By March 2021, the required system was still not in place, and much more manual processing was required for applications than expected, contributing to a growing backlog. 

The NAO recommends the department should engage properly with the supplier market for future decarbonisation schemes, and base its planning on a realistic assessment of how long it will take the market to mobilise. The requirements placed on homeowners and installers for such schemes should be tested from the start, with the aim of simplifying administration.

Gareth Davies, the head of the NAO, says: "The aim to achieve immediate economic stimulus through the Green Homes Grant voucher scheme meant that it was rushed. As a result, its benefits for carbon reduction were significantly reduced and ultimately, it did not create the number of jobs government had hoped for. Decarbonising our homes is a key element of the government's net zero strategy. It is vital that future schemes learn from this experience.”

 

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