Green Homes Grant fiasco

Energy efficient heating system in the home

The government’s advisory Climate Change Committee says that £2 billion needs to be spent every year until 2030 to meet its climate change targets. To help achieve the target, the Green Homes Grant was rolled out to help householders afford better insulation in their homes.

However, many potential users of the scheme have been unable to get a quotation from a registered contractor and where work has been carried out the firms have not been paid. Indeed, only 17,618 vouchers had been issued to households as of 26th January 2021.

The scheme has been described as overly bureaucratic, in that it was devised to avoid a repeat of the scandal in Northern Ireland, where the Renewal Heat Incentive grant led to subsidies that were greater than the cost of the fuel. It took nearly three years for the error to be realised with a cost to the public purse of £500 million. The subsequent inquiry cost nearly £7 million in addition to this.

So, what’s wrong with the Green Energy Grant?

A complicated application process means that small builders belonging to the Federation of Master Builders are reluctant to apply for the accreditation necessary to carry out the work. Indeed, only three of the federation’s 7,400 members have been accredited. Even so, over 1,000 firms have successfully become accredited as Trustmark accredited installers.

However, high demand for the scheme has led to delays in commencing work, meaning that work can sometimes not be carried out within the limited time allowed. The scheme is due to end in March 2022 but a bottleneck of interest and too few installers mean that there might still not be sufficient time to meet demand.

Philip Dunne MP proposes a new ‘carbon tax’ with levies on high carbon products that would incentivise the use of wood in construction, a product that has absorbed CO2.

He is also calling for changes in VAT to better reflect Britain’s current needs, including a reduction in the level of VAT applied for repair work and energy upgrades in the home. The current system concentrates on the energy efficiency of a built home rather than considering the carbon footprint of the building itself. As the Architects’ Journal points out, the VAT system even rewards the ‘wasteful demolition’ of buildings.

MPs are concerned that the remainder of the £1.5 billion funding set aside for the Green Homes Grant until April this year could now be clawed back instead of being rolled over to next year’s fund. Originally £2 billion was set aside for the scheme but only £94.1 million has so far been spent and next year’s budget will be just £320 million.

Mr Dunne said the government had: “promised £9.2 billion for energy efficiency in our manifesto, and we have to deliver that or we won’t reach our climate change targets”.

He also criticised the scheme’s aim to create more jobs which he described as the ‘job destruction’ scheme, saying that builders had lost their jobs when government payments weren’t received.

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