Industry disappointed by decision to cut Green Homes Grant funding

Industry bodies are disappointed in news that 95% of the funding provided for the Green Homes Grant scheme looks unlikely to be rolled over into the next financial year.

The much-needed funding was to be used to improve the energy performance of homes across England through low carbon heat and energy efficiency measures; however, despite high demand from households, less than 5% of the vouchers have been used due to issues with the scheme’s administration.

The Green Homes Grant was launched to kickstart a green recovery in September last year and was thought to create thousands of green jobs. The Heat Pump Association has been working hard to train installers so that they are able to meet the high demand of the scheme, with many installers already at full capacity.

The HPA is concerned that the decision to roll back funding will discourage heating installers from training or upskilling so they can install technologies like heat pumps, at a time when the industry needs to prepare for net zero. The Government’s target of 600,000 heat pumps per year could fail without a significant boost in installer numbers over the next decade.

The decision not to roll over the funding will also send the wrong signal to households who have demonstrated their interest in improvements by applying for Green Homes Grant vouchers. Policy stability is vital for providing both industry and households with the confidence they need to ‘buy into’ the low carbon transition.

Phil Hurley, Chair of the Heat Pump Association, said:

“The Heat Pump Association is disappointed to see that unspent funding for the Green Homes Grant looks unlikely to be rolled over despite significant delays caused by the scheme’s administration rather than demand. This rollover would have demonstrated the Government’s commitment to improving UK homes through energy efficiency and low carbon heat and given the industry the time and confidence it needs to deliver the green recovery.”

In response to the news that the government is withdrawing hundreds of millions of pounds from the Green Homes Grant scheme, Adrienne Minster, CEO of Rated People said:  

“The Green Homes Grant has been hugely successful in motivating homeowners to make green renovations to their homes, with demand for improvements covered under the scheme soaring year on year. However, there have clearly been issues with grants being approved and payments being made for the work, and it is disappointing to learn that a large part of funding is now being withdrawn. The Green Homes Grant can play an important role in the government’s pledge for a post-coronavirus green recovery and we would urge them to re-think this decision and look into ways to solve the operational challenges, so that the scheme can end up becoming a real success.

“Like all SME’s, trades businesses run tight budgets and are very sensitive to cashflow, so any disruption to payments puts their businesses at risk at a time when they would particularly benefit from government support. We would love to see the government look into the issues and prioritise arranging delayed payments, to ease any unintended financial pressure on tradespeople.”

Responding to the announcement, George Webb, CEO, Liquid Gas UK also commented: “The Government has fallen at the first hurdle of trying to tackle net-zero in the millions of homes around the UK. At its heart, the scheme misunderstood homeowners and people’s lives. The boxing in of homeowners into a small set of options such as heat pumps did not tally with the realities of the way of life for millions and what they can afford. Forcing homeowners to select one primary and expensive improvement has prevented homeowners from carrying out realistic measures such as double glazing or draught-proofing. A one size fits all approach clearly doesn’t work, so UK Government must accept this when designing future schemes. There must be support for a mix of technologies, including options such as LPG and less intrusive energy efficiency measures, so that rural households and small businesses can all play their part in reducing their carbon footprint.”

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