Millions of pounds is to be withdrawn from the government’s green homes pledge, less than six months after it launched to make homes more efficient and save households thousands of pounds on energy.
Ninety-five percent of the £1.5billion Green Homes Grant fund, introduced to make homes less carbon intensive, remains unspent due to government delays in paying households and installers – and now the budget is to be significantly cut.
It means many households will never receive the £5,000 vouchers.
In some cases, homeowners have been waiting five months for the grants to be issued while installers say they have had to lay staff off because they are owed tens of thousands of pounds by the scheme.
Figures released on January 22, showed just £71million had been spent to date out of the £1.5billion promised to householders.
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The grants have been extended to run until March 2022 because of the delays – but just a fraction of the £1.5bn budget will roll over, meaning thousands of homes will lose out.
The Green Homes Grant is part of a £2billion scheme run by the Department for Business, Energy and Industrial Strategy.
It’s made up of a £1.5billon subsidy to make homes greener – such as improving boilers and insulation in people’s homes – plus £500million to help improve council housing.
Government figures last week showed that just over 21,000 vouchers had been issued to householders since last September, out of their target of 600,000 .
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But now business minister Anne-Marie Trevelyan has revealed the £2billion available would not be rolled over into the next financial year from March.
Speaking in parliament, she said: “The original funding for the green homes grant voucher scheme was announced as a short-term stimulus, for use in the 2020-21 financial year only.”
She indicated a far smaller budget – £320million – would be available from March this year – effectively withdrawing hundreds of millions of pounds from the programme.
Chris Hewett, the chief executive of the trade association Solar Energy UK, said removing the money “would be an alarming early failure of the government's 10-point plan for a green recovery, transforming a flagship policy into something tokenistic”.
Hewett accused the government of pulling the rug from underneath consumers and installers.
“A year ago the chancellor put £2billion on the table and, as it stands, three-quarters of that is about to taken away by the Treasury,” he said.
“The government must not pull the rug from underneath consumers and installers.”
John Alker, the director of policy and places at the UK Green Building Council, said it marks another government “stop-start” policy.
“The problems with the scheme have not been about consumer appetite, but with the scheme's administration, with householders having to wait months in some cases, and installers having to wait similar amounts of time to get paid for works done,” he said.
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“Stop-start policy of this kind is extremely counterproductive for businesses looking to invest in delivering a green recovery, and it is disappointing to see that lessons that should have been learned from the fate of previous schemes appear to have been missed.”
A Department for Business spokesperson attributed delays to the Covid crisis – stating households have been reluctant to welcome tradesmen into their homes.
It did not comment on why installers have not been paid.
“The Green Homes Grant Voucher Scheme was designed to provide a short-term economic stimulus while tackling our contribution to climate change.
“However, the prevalence of Covid-19 since the scheme's launch in September last year has led to an understandable reluctance on the part of the public to welcome tradespeople into their homes.”
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