The green homes grant was deeply flawed — but scrapping it is bad news

The UK has some of the leakiest homes in western Europe, with heating and hot water accounting for around 15% of our domestic greenhouse gas emissions. Retrofitting our homes with low-carbon heating and energy efficiency are vital for hitting even the insufficient target of net-zero emissions by 2050.

Last July chancellor Rishi Sunak unveiled the £2bn green homes grant as part of the government’s Plan for Jobs in the wake of the pandemic. The scheme aimed to upgrade 600,000 homes with things like insulation or low-carbon heating, and create over 100,000 jobs. Last weekend, the government quietly axed the grant with four days notice, having issued only 39,000 vouchers (with only 2,900 actually being paid out). Instead, the business minister has allocated £300m from the green homes grant to the separate local authority delivery scheme, which is dedicated to upgrading low-income homes. Bizarrely, the government is spinning this as a boost in energy efficiency spending, despite over half the originally announced funds being unspent.

The government has blamed Covid-19 for making people reluctant to allow tradespeople in their homes, despite their own figures showing over 120,000 applications to the scheme. In fact, the green homes grant is just the latest in a litany of stop-and-start energy efficiency policies that have stifled what should be a burgeoning source of good, green jobs. Builders were burned when the previous Green Deal insulation scheme was summarily scrapped in 2015, while successive cuts to subsidies for solar energy have gutted a fledgling industry.

The latest incarnation repeats the same mistakes, with short-term planning and an onerous and expensive accreditation process that particularly burdened small retrofitting businesses. In keeping with 2020 being the year of catastrophic outsourcing, the green homes grant was contracted out to an American consultancy, whose reportedly chaotic management led to long delays for customers and installers, and cancelled orders. The environmental audit committee of MPs, who called the scheme ​“nothing short of disastrous”, heard evidence from businesses laying off staff because of the administrative costs and ultimate loss of custom.

Despite its flaws, businesses, campaigners and MPs weren’t calling for the scheme to be axed — just overhauled. As Brian Berry from the National Federation of Master Builders put it: ​“we need to give encouragement to these small companies that this is not just a flash in the pan, it is not going to be a repeat of the Green Deal … This [has got to be] a 20-year programme to transform our existing homes.” There must be a successor scheme that learns from recent mistakes and meaningfully supports the low-carbon industry with more than warm words.

“… for all its talk of​‘levelling up’, the government has bungled every opportunity to create good, green jobs at the scale and in the places they’re most needed.”

Increasingly, local initiatives are seeking to fill the climate action vacuum left by the national government. In Manchester, a project training theatre technicians to retrofit houses has provided good, green jobs to those in one of the industries most affected by the pandemic. At a regional level, in North of Tyne a Green New Deal Fund aims to create jobs in the growing low-carbon economy, supported by a £2bn devolved skills budget to train people into new jobs. In London, residents and campaigners, including NEF, are calling for a just transition to create 60,000 green jobs and apprenticeships and upgrade 100,000 fuel-poor homes by 2030.

The Local Authority Delivery scheme — much more successful than its outsourced twin — will certainly make good use of the additional £300m. But less than half the eligible authorities in England have bid for or received grants, and low-income households in these areas now have almost no access to energy saving measures. Even those on moderate incomes will struggle to pay the upfront costs of fully retrofitting their homes. We now need a long-term, place-based delivery approach to end fuel poverty, provide skills and scale up local supply chains, with local authorities at its core. NEF has found that with the right investment, a National Retrofit Taskforce could create an average of 295,000 direct jobs every year for four years, reducing annual CO2 emissions by over 19m tonnes. A variable stamp duty for more efficient homes, reducing VAT for retrofitting works, and green mortgages could incentivise those who can afford it to upgrade their homes.

Our analysis has found that over the last year, half a million people have lost jobs that will never return. And yet for all its talk of ​‘levelling up’, the government has bungled every opportunity to create good, green jobs at the scale and in the places they’re most needed. And as the UK prepares to host the world’s most important climate summit in November, cutting our only major green stimulus policy doesn’t exactly scream climate leadership. The government must replace it with a better model and finally show it is serious about both climate and jobs.

Image: iStock