Government pulls funding for energy efficiency ‘Green Deal’ scheme
The Government has scrapped its failed flagship energy efficiency programme, the Green Deal, pulling its funding and announcing an investigation into alleged scams that have surrounded the scheme.
Launched in 2013, the Green Deal was touted as a “revolution” in upgrading Britain’s old and draughty housing stock, designed to encourage millions of households to take out loans to install insulation and new boilers. But, with less than 10,000 loans in place, ministers pulled the plug and acknowledged the scheme would be seen as a “total flop”.
The Department of Energy and Climate Change (Decc) said it would provide no further Government funding for the Green Deal Finance Company, which provides the loans, “in light of low take-up and concerns about industry standards”. It had so far provided £59 million to the company.
Decc has also commissioned an independent review to look at standards and “consumer protection”, following widespread reports of scammers hijacking the scheme to rip off households, and one in ten installers being struck off for breaking the scheme’s code of conduct.
There will also be no more funding for the Green Deal Home Improvement Fund cash back scheme, which launched in mid-2014 and gave households money back on home energy efficiency improvements.
Unlike the loans, the cash back scheme proved hugely popular with consumers who cleared out funding within days of it being released. Decc had given away £114 million of funding through the scheme, which had been criticised as poor value for money.
Amber Rudd, the energy secretary, said: “We are on the side of hardworking families and businesses – which is why we cannot continue to fund the Green Deal. It’s now time for the building industry and consumer groups to work with us to make new policy and build a system that works. Together we can achieve this Government’s ambition to make homes warmer and drive down bills for 1 million more homes by 2020 – and to do so at the best value for money for taxpayers.”
Under the original Green Deal scheme, households were encouraged to take out a loan to fund the cost of energy efficiency work, with the loans paid back in instalments on their energy bills. The repayments were supposed to be less than the savings from the energy efficiency work. But the scheme has suffered from low take-up amid concerns about high interest rates and official rulings by the advertising watchdog which pointed out households were not guaranteed to save money.
Greg Barker, then energy minister, said after the scheme’s launch that he would be having sleepless nights if 10,000 homes had not signed up by the end of 2013. Figures released show that by the end of June 2015 there were still just 9,999 Green Deal loan plans ‘live’, with a further 5,597 pending or applied for.
In a blog post explaining the decision, the Decc acknowledged people would ask: “Has the Green Deal been a total flop?” Its response noted there had been “many success stories come out of Green Deal” but that “uptake has been lower than expected”.
The announcement does not affect existing Green Deal plans taken out by householders or existing Green Deal Home Improvement Fund applications and vouchers, Decc said.
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