The decision to axe the Green Homes Grant scheme could undermine the Government’s entire decarbonisation strategy, according to the Building Engineering Services Association (BESA).
The industry body said it was “disappointed by this short-sighted decision” and pointed out that it would make the building services industry even more suspicious of any future government initiatives linked to the 2050 net zero target.
“The Government has a very strange way of trying to gain the support, confidence and financial investment of the construction and building engineering companies it needs to deliver a greener built environment,” said chief executive David Frise.
“If it tries to launch another scheme in the future that requires employers in our sector to invest hard-earned money and precious time in people and equipment; what answer does it expect to receive?”
The Green Homes Grant (GHG) scheme, which was launched amid much fanfare last year, has been dropped having achieved just 10% of its target to transform the energy performance of 600,000 homes. Its funding was reduced from £1.5bn to £320m earlier this year and the smaller amount has now been reallocated to a home insulation scheme run by local authorities for lower income households.
The Government says consumers were reluctant to apply for the grants because they did not want contractors coming into their homes during the pandemic. However, many householders reported waiting months for their applications to be approved and hundreds of small firms had payments due through the fund so severely delayed that some went out of business.
BESA faced a barrage of questions and concerns from members struggling to navigate their way through the convoluted processes and confusing information that characterised the management of the scheme. This left many frustrated and out of pocket because of the administrative burden and payment delays.
The Government’s own figures showed that of 123,000 applications for grants by the end of February, just over 28,000 vouchers had been issued and fewer than 6,000 installations completed.
“This is all too reminiscent of the ill-fated Green Deal,” said Frise. “Many companies got their fingers burned with that scheme and organisations like ours spent considerable time and effort trying to persuade members to get behind this latest initiative. We feel badly let down.
“To achieve long-term, low carbon aims the country needs to have long-term, well managed initiatives. This stop-start approach will have the opposite effect by turning off both the industry and consumers.”
BESA also said it was disappointed that the Chancellor did not take the opportunity to reduce VAT on energy saving retrofits in his recent Budget.
This was recommended by the parliamentary Environmental Audit Committee, which also urged him to reallocate the unspent grant funding to long-term decarbonisation plans.
“Making 19 million homes ready for net zero Britain by 2050 is an enormous challenge that the government appears to have not yet grasped,” said the committee chair Philip Dunne MP. “In the next 29 years, the Government must improve energy efficiency upgrades and roll out low carbon heating measures…starting now. A much better understanding of cost, pace, scale and feasibility of skills development is desperately needed.”
Frise added that pump priming such a huge market with public funds also made “good business sense as it creates and preserves jobs and gives companies confidence to invest in the future”.
“The Government should now grasp the opportunity ahead of its forthcoming Heat and Buildings Strategy to listen to the industry and take on board our suggestions for how these initiatives could work better in the future,” he said. “BESA members and other companies working across the sector understand how these things unfold on the ground. So, why not ask them?
“That is the way to avoid this tremendous waste of resources, further embarrassment and missed opportunities on the road to net zero,” said Frise.
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