ECONOMY

UK green homes scheme condemned as badly planned and rushed

UK politics & policy updates

A UK government scheme designed to kickstart the decarbonisation of homes was badly planned, rushed and failed to achieve its objectives, the parliamentary spending watchdog has found.

In a damning analysis of the Green Homes Grant published on Wednesday, the National Audit Office said the scheme was “delivered to an overambitious timetable and was not executed to an acceptable standard”. 

The botched £1.5bn initiative was billed as a key step in the government’s plan to reach net zero emissions by 2050 and a way to stimulate the economy following the coronavirus crisis.

The Green Homes Grant had been expected to help 600,000 households make their properties more energy-efficient and install low-carbon heating, and support up to 82,500 jobs.

But it was beset by problems from the time it launched in September 2020 and was abruptly scrapped in March. The government estimated that it helped around 47,500 households and created just 5,600 jobs in total.

“The aim to achieve immediate economic stimulus through the Green Homes Grant voucher scheme meant that it was rushed,” said Gareth Davies, head of the NAO. That meant the scheme’s climate benefits were “significantly reduced”, he said, adding that it was “vital that future schemes learn from this experience”. 

Buildings account for around a fifth of the UK’s total greenhouse gas emissions and represent a particularly difficult sector of the economy to decarbonise. The NAO urged the government to outline its long-term decarbonisation plans, with ministers yet to publish a long-delayed strategy to make the UK’s housing stock greener.

The report also called for the administration of any future scheme to be simplified after the NAO found many homeowners had struggled to use the scheme because it was overly complicated. There were frequent delays in the issuance of the vouchers that paid for the work. Of the 169,012 applications, 51 per cent were either rejected or withdrawn.

The Treasury gave the Department for Business, Energy and Industrial Strategy only 12 weeks to design and launch the scheme — at a time when the department was busy trying to procure coronavirus vaccines and dealing with Brexit — because officials wanted it to coincide with the expected end of the coronavirus furlough scheme, the NAO said.

BEIS and the Treasury accepted that this timescale was “high-risk” but proceeded due to the need to stimulate the economy, the report said. They did so “even though none of the firms that bid for the grant administration contract thought it was possible to fully implement [the system]” in the proposed time. 

The BEIS accounting officer approved the scheme even though the department’s investment committee had rejected the business case for it on the grounds the system had not been fully developed and spending the £1.5bn in six months might not be feasible.

Those who applied in September 2020 waited an average of 138 days to receive a voucher, and the system anticipated by the department “was not in place by the time the scheme closed”, said the NAO. 

The NAO recommended that the government “engage properly with the supplier market for future decarbonisation schemes” after it found it had failed to understand the challenges that the industry would face, such as the shortage of qualified installers. Installers were only consulted after the scheme’s announcement.

The watchdog said the government had expected grants awarded under the old scheme to total £314m, of which £50.5m would have gone on management and administration costs, equivalent to more than £1,000 per application.

“The Green Homes Grant scheme was set up to fail, with an undeliverable timetable and overly complex design which took little account of supplier and homeowners’ needs,” said Meg Hillier, chair of the Commons public accounts committee.

The government said the scheme “was designed as a short-term economic stimulus and was delivered during an ongoing pandemic” and that it was “committed to going further and faster”.

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