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Industry groups call for rethink on Green Homes Grant cut

Trade groups across the building services industry have urged Government to reconsider its intention to remove funding from the £2bn Green Homes Grants (GHG) scheme.

“Such drastic reduction of funding sends out all the wrong signals, especially as the Government aims to put the green economy at the heart of plans for rebuilding the economy” says Julia Evans from Actuate UK member BSRIA.

Actuate UK members have expressed their disappointment that only £320m of the original £2bn would now be made available through the GHG voucher scheme.

“Initiatives to encourage the take up of low carbon solutions need to be long term and consistent,” adds Hywel Davies, from Actuate UK member CIBSE. “A short-term stimulus does not create the market shift required to achieve net zero targets, including the development of a suitably skilled workforce in key sectors. To invest in the necessary recruitment, training and technologies, businesses must know that Government means business, and is in this for the long haul.”

Julia Evans added “We suggest that next week’s Budget is a huge opportunity for Government to underline its commitment to building a green economy and recovery, especially ahead of the UK’s hosting COP26, and that this should include ongoing commitment to green residential retrofit”.

Actuate UK proposes that Government:

• Review the operation of the GHG, in consultationwith the sector groups that would implement the energy efficient and low carbon measures it is supporting and

• Release all the original GHG funding, ensuring that the full £2 billion is available until March 2022 and act swiftly to resolve the administration problems with the scheme based on current feedback.

• Consider a requirement for a GHG voucher to be used to create a ‘green building passport’ to give homeowners a plan from the medium to long term.

• Develop a robust pathway so that the GHG voucher scheme can support the transition into future long-term support.

• Reduce VAT to zero on all energy efficiency-related products.

Government has characterised the GHG initiative, set up in 2020 to improve the energy efficiency of 600,000 homes in England by issuing vouchers to carry out home improvements, as a “short-term stimulus”. Grants could be used up to the end of the 2020-21 financial year, although work could carry on until March 2022. A recent report from the Environmental Audit Committee (EAC) noted that vouchers were being issued at a ‘snail’s pace’ – only 20,000 issued at the last count, just 5% of the available vouchers. However, there is clearly consumer demand and once administrative issues are resolved and the timescale extended, supply chains will have the full confidence to develop and support the scheme.

• Meanwhile, 19 organisations representing or working within the energy efficiency and low carbon heating sector have written to government ministers, highlighting the importance of the continued and successful delivery of the Green Homes Grant Voucher Scheme (GHGVS).

Premature closure of the GHG Scheme would put jobs in jeopardy, dash the dreams of homeowners and put the UK’s net zero target at significant risk

The GHG was announced by Chancellor Rishi Sunak in July 2020 with the intention of kickstarting a green recovery, creating jobs and enabling homeowners to improve the energy efficiency of their homes. The initiative has been met with high demand from homeowners and industry, and while initial teething problems due to administration challenges have been significant, it is promising to see these issues now being resolved.

The energy efficiency and low carbon heating sector is concerned by recent rumours that the scheme will come to an early close on 31 March 2021 and that the £320 million of the funding allocated for 2021/22 may be recalled. Such a decision could have significant financial implications for businesses who have invested in developing capacity to meet the demands of the scheme; it would also undermine the trust of homeowners who have applied for vouchers for home improvements yet to be delivered.

Derek Horrocks, chairman of the National Insulation Association, said: “Stable policy is needed to provide the industry with the confidence it needs to invest and adapt to the demands of the net zero transition. Enquiries for insulation and low carbon heating have been extremely high, in spite of the current circumstances, and companies across the sector have responded and geared up the supply chain to meet demand.

“That’s why we would urge the Chancellor not to curtail the Green Homes Grant to ensure that our sector can lead the UK’s economic recovery and meet the Government’s net zero ambitions.”

Signatories to the letter include: The Association for Decentralised Energy (ADE), Heat Pump Association (HPA), The Insulated Render and Cladding Association (INCA), Insulated Assurance Authority (IAA), Microgeneration Certification Scheme (MCS), National Insulation Association (NIA), Association for Renewable Energy and Clean Technology (REA), Renewable Energy Assurance (REAL), Solar Energy UK, Sustainable Energy Association (SEA), Solid Wall Insulation Guarantee Agency (SWIGA), Caplor Energy, Interglow, Insta Group, Pacifica Group, Permarock, Saving Energy UK, Sustainable Building Services and Westville Group.

 

24 February 2021

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