There’s no doubt across the industry that the previous GHG scheme was a ‘slam dunk failure’ (as reported by the Public Accounts Committee PAC). The available grants only upgraded around 47,500 homes of the 600,000 originally planned, not to mention delivering only a fraction of the new jobs for the industry that had been promised by the government.
A report from PAC revealed that more than £1,000 was spent on admin for each home that was successfully upgraded – a shocking total of £50m or 16% of the total spend of £314m for the entire scheme. Even the total spend was a fraction of the £1.5bn budget promised to upgrade the original target of 600,000 homes.
The government’s plan to cut carbon emissions from homes in the UK, which currently emit 20% of the country’s CO2, is a challenging target, which can only be successful if important lessons are learned. With the benefit of hindsight, we can seek to avoid making the same mistakes that resulted in last year’s crash and burn scheme.
Where did it all go wrong and what needs to change?
From the beginning, applications for the green homes scheme were complicated to complete, often resulting in further queries needing to be answered before eventually being processed. Public interest was enthusiastic but administrative support was slow and difficult to navigate. Suggestions that have been made include that the criteria which need to be met by homeowners and installers for such schemes should be tested from the start, with the aim of simplifying unnecessarily laborious administration.
Implemented in a rush and pulled prematurely
The expectation was that 82,500 jobs would be supported by the scheme over six months. The Department forecasts that the scheme will eventually support efficiency measures in 47,500 homes and have created up to 5,600 jobs over 12 months. The initial plan for a two-year scheme would have allowed more time for jobs to be created, but this was rejected by HM Treasury.
The scheme began in September 2020 and was pulled suddenly early this year after just six months of operation.
Little consideration was given to installers whose businesses were being impacted by other environmental concerns such as the pandemic.
The scheme focused on measures that would provide the biggest impact on reducing carbon, such as insulation and low-carbon heat installations. These require specialist skills to install, meaning employers needed time to recruit and train the right staff. Installers were given little time to upskill and retrain into the roles needed to complete the scheme. Those who were already trained in specific areas found their payments delayed and difficult to arrange.
“We heard it can take 48 months (about 4 years) – four years – to train the specialists required to implement key parts of a scheme that was dreamed up to be rolled out in 12 weeks.” Dame Meg Hillier, chair of the Public Accounts Committee
A surge in interest but some scepticism about future grants
A recent study by Logic4Training revealed that they have had their highest number of requests for information about heat pump training, and Google reported a surge in searches for ‘heat pumps’ following the government’s announcement in October.
Mark Krull, director at Logic4Training, explains he is experiencing some scepticism from installers about future government schemes: “Unfortunately, we are still seeing some hesitancy and scepticism from installers, largely because previous government schemes have been scrapped prematurely. Personally, I think this time it is different. At the end of the day, the UK must reduce its carbon footprint and over the next 20 years or so, gas and oil boilers (as we know them currently) will be phased out.”
Installers at the heart of decision-making
With installers across the industry supportive of the governmental drive to low carbon from fossil fuels, it is essential that they need to be consulted as part of plans to ensure a positive outcome.
The NAO recommends the Department should engage properly with the supplier market for future decarbonisation schemes, and base its planning on a realistic assessment of how long it will take the market to mobilise. The requirements placed on homeowners and installers for such schemes should be tested from the start, with the aim of simplifying administration.
Gareth Davies, the head of the NAO said: “The aim to achieve immediate economic stimulus through the Green Homes Grant voucher scheme meant that it was rushed. As a result, its benefits for carbon reduction were significantly reduced and it did not create the number of jobs the government had hoped for.
“Decarbonising our homes is a key element of the government’s net zero strategy. It is vital that future schemes learn from this experience.”