Scrapping Green Homes Grant had ‘devastating consequences’, MPs say

MPs have slammed the Green Homes Grant scheme for its botched implementation, poor administration and devastating consequences on many builders and installers.

The criticism comes just six weeks after it was confirmed the government was set to claw back most of the £1.5bn fund for retrofitting homes because of delays getting the money to householders meant it was unlikely to be spent by this month’s deadline.

The Green Homes Grant, which launched at the end of September, included £1.5bn for householders and is set to run until the end of this month but just £71m, or 5% of the money had been spent by 22 January. The government has announced unspent funds will not be rolled over.

The environmental audit committee’s 80-page report, Energy Efficiency of Existing Homes, also highlighted the damage the scheme had done to the construction sector.

It said: “The impact of its botched implementation has had devastating consequences on many of the builders and installers that can do the work, who have been left in limbo as a result of the orders cancelled and time taken to approve applications.”

It added the scheme was “rushed in conception and poorly implemented … [the] scheme administration appears nothing short of disastrous”.

According to data released last week by the Department for Business, Energy and Industrial Strategy, there were more than 123,000 applications for the grant by the end of February but only 28,000 vouchers had been issued and only 5,800 measures had been installed.

The report said there was next to no chance the UK’s target of reaching net zero emissions by 2050 would be met without a comprehensive programme to retrofit at least 19 million homes and switch from gas boilers to low CO₂ heating.

The MPs recommended that the Green Homes Grant scheme be “urgently overhauled and extended to provide a genuine long-term stimulus to the domestic energy efficiency sector”.

They said the scheme should not be scrapped or quietly wound down, that the government needed to address the design and administration issues with the scheme and that all allocated funding that was not been spent by the end of March 2021 be rolled over into the next financial year.

The report also said that the government needed to develop a national retrofit strategy.

It added: “We recommend that as part of the forthcoming heat and buildings strategy a national retrofit strategy is developed with colleges and other education providers to provide the training and re-training needed to prepare our homes for a low-carbon future.

“The strategy must address the much-needed increase in certified heat pump installers to meet expected demand including through recruitment incentives, with support for apprenticeships and reskilling.”

RIBA president Alan Jones said the report’s recommendations to “address our shamefully inefficient housing stock” were essential to the government’s net zero ambitions.

He said: “I particularly endorse recommendations to implement a national retrofit strategy and pilot stamp duty rebates for homeowners that improve the efficiency of their homes within the first year – measures we’ve been calling for through our Greener Homes campaign.”

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Brian Berry, chief executive of the FMB, which has long campaigned for a national retrofit strategy, said he hoped the government implemented the report’s recommendations in full.

He said: “A long-term national retrofit strategy, underpinned by a skills plan and fiscal incentives that build supply and demand for home retrofits, must be a government priority ahead of COP26,” he said.

“If we are to lead the world in tackling climate change, then the government must act now to mobilise a market that has historically failed and will continue to do so if we rely on flash-in-the-pan schemes.”

Berry said that cutting VAT on home improvement projects, something the committee recommended, in combination with financial solutions like green mortgages, would help make green home upgrades achievable for more households.