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Green Homes Grant scheme to insulate houses axed

Household insulation

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A much-promoted grants programme to help UK householders insulate their homes is to be scrapped within days.

The Green Homes Grant (GHG) reached just 10% of the 600,000 homes the chancellor promised would be improved.

The scheme will be stopped on Wednesday and the cash allocated to a separate insulation fund run by councils.

The £300m previously allocated for the GHG will now go into a programme administered by local authorities, targeted at lower income households.

Some 19 million homes in the UK need to be insulated or the emissions from gas boilers will wreck the UK’s chances of achieving its climate change targets.

But the GHG scheme, which launched in September in a bid to tackle that, has struggled from the start.

The government said many households were reluctant to apply for the grants – up to £10,000 – because they feared catching Covid from contractors coming into their homes.

However, in some parts of the country installers were actually overwhelmed with demand, and families could not even get firms to answer the phone.

Then checks on the way the money was spent were so stringent that some installers went out of business because payments were so badly delayed.

And despite the checks, some builders appear to have hugely overcharged for their work. One joiner told me he had witnessed an installer carry out work worth £3,000 at most, then deliver an invoice for £5,000.

Stop-start funding

It seems clear there is frustration in Whitehall at the American consultants brought in to manage the scheme for able-to-pay families.

The parallel insulation scheme administered by local authorities is running much more smoothly but ministers still need to create a new programme to nudge able-to-pay home owners into improving their insulation for the UK to hit its climate change targets.

There is no sign yet what that new programme might look like, or when it might happen.

A government source pointed out that the Conservatives promised in their manifesto to spend £9bn on insulation – and insisted that this cash would definitely be made available.

Campaigners, industry figures, and MPs said the current scheme was botched and called for the Chancellor Rishi Sunak to create an insulation programme stretching for decades, so that installers and suppliers have the chance to build up stocks and expertise.

Previously many firms have been driven out of the sector following stop-start government funding.

‘Avoidable tragedy’

On announcing the move, Energy Secretary Kwasi Kwarteng chose to focus on the transfer of cash to the local authority fund, rather than the scrapping of the GHG.

He said: “Upgrading the country’s homes with energy efficiency measures means we can cut emissions and save people money on their energy bills.

“Today’s funding boost will mean even more households across England are able to access these vital grants through their local authority.

“This latest announcement takes our total energy efficiency spending to over £1.3bn in the next financial year, giving installers the certainty they need to plan ahead, create new jobs and train the next generation of builders, plumbers and tradespeople.”

First announced last summer, the GHG scheme was extended in November for another year until the end of March 2022.

Greenpeace UK described the rollout of the GHG scheme as “shambolic”.

The organisation’s Kate Blagojevic said the “biggest hole” in England’s energy efficiency was private households and you can’t “boost the situation with a smaller pot of money”.

She added: “The government is plain wrong to try and frame it as such.”

‘Staggering ineptitude’

Ed Matthew, from climate change think tank E3G said: “The end of the government’s flagship green homes scheme is a tragedy that was avoidable.

“There was plenty of demand for the grants but the scheme was plagued by incompetent administration. The reality is that we can’t get to net-zero without decarbonising our homes.”

He called for a new grant scheme to replace it – but said it was key to get the grants out quickly.

The demise of the GHG follows the previous failure of the government’s Green Deal which flopped because householders could get cheaper finance through their bank.

Matthew Pennycook, the shadow minister for climate change, said: “The funding announced today doesn’t even come close to plugging the investment gap created by the government’s decision to slash more than £1bn from its Green Homes Grant scheme and then scrap it altogether.

“Ministers might talk a good game on energy efficiency but their staggering ineptitude when it comes to decarbonising the country’s housing stock speaks for itself”.

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