NEA’s Director of Policy and Research, Peter Smith, reflects on the latest Government announcements
The UK Government has announced over the weekend that after just six months delivering vital home energy saving measures, the Green Homes Grant (GHG) voucher scheme – which was at the heart of last year’s Summer Statement – is to close its doors to new applications on 31 March at 5pm.
Even with the welcome and newly announced £300m funding to low-income households through the extension of the Local Authority Delivery (LAD) scheme, NEA estimates that the majority of the original £1.5bn GHG budget will now be returned to HM Treasury. This equates to around £700 million of underspent funding which should have been keeping homes warmer and helping us build back better in the wake of the pandemic.
For anyone that is a regular observer of Government (energy) policy, the latest GHG saga may however not be a massive surprise. For years, despite being the essential cornerstone of any credible energy policy, the fortunes of energy efficiency programmes have blown hot, then cold and often ended prematurely leaving the industry and households high and dry.
Unlike its predecessors like the Green Deal however, the Green Home Grant has not been axed due to a lack of take up. The latest data shows that following its launch in September there has been significant interest in the scheme by members of the public with 82,800 household applications associated to 123,500 vouchers to the end of February 2021.
Regrettably however, given the frequent and very public airings of the significant challenges with the administration of the GHG scheme, the rollover of the scheme’s unspent budget was first cast in doubt and now the scheme has been totally axed. Whilst many will seek to pick over the bones of the GHG’s demise, for me, three things really matter in the short-term:
- Low-income households that applied for the higher GHG voucher must get the measures they so desperately need
Shockingly, out of over 60,000 applications only around 25% of low-income households have had their vouchers issued and only 904 vouchers have been paid. This means the vast majority are still waiting for any assistance and continue to live in cold, damp homes. The low income households who have come forward for the scheme should not be punished for the failings of a scheme. They have put their trust in a scheme that should have been there to help them at a time when they needed it most.
These households must now be prioritised by the administrator, government and industry so they finally get the help they so desperately need. At the very least, the Government will need to work with local authorities to make these households aware of any equivalent funding under the Local Authority Delivery scheme which could still help many of them improve their properties so they don’t remain dangerously cold or impossible to heat and power.
- Installers must be paid
For many naysayers of the low carbon transition, the GHG demise is more powerful ammo that central Government’s plans to reach net zero are not credible or at the least, central government programmes cannot be relied upon. Many organisations have however worked very hard to make the GHG a success and the impact on their business, agency or charity of the closure of GHG may be very significant.
One of the most frequent challenges with the administration of the GHG scheme has been installers not being paid promptly when work is carried out. Overall, only 2,900 vouchers have been paid out.
Installers that have taken part in the scheme in good faith, and spent money on getting appropriate accreditations, undertaking marketing and installing measures should not be made to put jobs at risk because they have been unable to get paid by the administrator.
- Mind the gap
The final immediate challenge which must now be urgently confronted is the gap in provision that GHG will leave. Whilst many will note the now complete absence of any support for ‘able to pay’ households, NEA also believes there is a very significant gap in provision for low-income households that do not live in an area where their Local authority has successfully accessed LAD funding.
Less than half of the authorities in England that are eligible for LAD have bid and/or have received any resulting funding. These LAs will have many households in their area that have been badly let down by the voucher scheme. These households will now have no access to any of the funding for energy saving measures, asides from the Energy Company Obligation (ECO) which provides much more limited support. This must now galvanise Central Government to work much closer with local authorities that have not applied for LAD but may have very high levels of fuel poverty to now take advantage of the expanded LAD assistance.
Finally, the latest saga has underlined the need for clarifying the future of energy efficiency policy overall. Little necessary transparency or detail is afforded when major policy details are announced over a weekend. The upcoming Heat and Buildings Strategy will now be even more vital in setting out the future of energy efficiency policy over this Parliament. It will also need to set out how any key lessons can be learnt for the GHG’s demise so that delivery risks aren’t simply outsourced away from central government to local authorities.
This learning will be particularly critical to inform the rollout of the Conservative’s original manifesto commitments to support fuel poor households via the new Home Upgrade Grant (HUG), the Social Housing Decarbonisation Fund (SHDF) and the upcoming new phase of the expanded Energy Company Obligation (ECO).
Only once these new programmes are in place and are reaping the types of positive outcomes we all hoped GHG would help deliver can we finally live up to the soundbites and truly build back better and deliver a fair transition to net zero.
If you have any comments on this blog please contact Peter.Smith@nea.org.uk