'Slam dunk fail' of £1.5bn Green Homes Grant scheme calls net zero plans into question, damning report warns

The Public Accounts Committee said only 47,500 homes used the voucher scheme instead of the 600,000 that had been envisioned under the scheme run by the Department for Business, Energy and Industrial Strategy (BEIS) - with £50m of taxpayers' cash spent on administration costs, equivalent to over £1,000 per property that was assisted.

The committee said: "We are not convinced that the department has fully acknowledged the scale of its failures with this scheme. The failure to deliver this scheme continues government’s troubled record of energy efficiency initiatives and risks damaging the Department’s future efforts to harness both consumer and industry action to deliver Government’s net zero commitments."

BEIS said that almost 80,000 vouchers had now been issued worth £335m but admitted they had "taken the experience of the Green Homes Grant into account" when designing new schemes. Low take up of the scheme, which launched in September 2020, has been blamed in part on Covid lockdowns leading to widespread reluctance for people to have tradespeople inside their homes.

The scheme was announced in July 2020 by Chancellor Rishi Sunak as part of the Government's intended 'green recovery' from the pandemic with £1.5bn of funding made available.

The scheme offered homeowners the opportunity to apply for up to £5,000 funding (£10,000 for low-income households) to install energy efficiency improvements and low carbon heat measures in their homes, such as insulation, heat pumps, energy efficient windows and doors, and heating controls. Homeowners were expected to identify a certified installer and apply for vouchers with the installer receiving the grant funding once they had fitted the measure.

It was hoped the scheme would support jobs at a time of economic risk for the economy while also reducing carbon emissions from homes.

However the PAC found that an "unrealistic" 12-week timescale to implement the scheme imposed constraints on its design and implementation. It said that contrary to helping employment, the scheme's "abrupt closure may have in fact led to redundancies".

The committee's report said: "The department proceeded with the scheme despite its own Projects and Investment Committee rejecting its full business case. The department should have considered halting or delaying the scheme given evidence that preparations were not sufficiently progressed.

"What resulted was a scheme with poor design and troubled implementation - the Department did not consult meaningfully enough with industry and consumers, leading to an overly complex scheme design with poor customer experiences and a lower uptake than envisaged.

"By August 2021, 52 per cent of homeowners’ voucher applications were rejected or withdrawn, and 46 per cent of installer applications failed.

"The scheme also struggled due to the failure of its scheme administration contractor, ICF Consulting Services Ltd (ICF), to successfully implement the required digital voucher application system.

"The department acknowledged that it should have had a better technical understanding of the preferred bidder’s proposed solution, and that, had it done so, it may have had sufficient warning that ICF would be unable to implement the required system successfully.

"The scheme’s primary aim was to support jobs, however, the scheme’s design and duration limited its impact on employment, and its abrupt closure

may have in fact led to redundancies. Government needs to stick to a stable, long-term plan, to renew the confidence of industry and consumers in taking the actions needed to realise Government’s net zero ambitions."

Dame Meg Hillier MP, Chair of the Public Accounts Committee, said: “It cost the taxpayer £50 million just to administer the pointlessly rushed through Green Homes Grant scheme, which delivered a small fraction of its objectives, either in environmental benefits or the promised new jobs.

"We heard it can take 48 months - 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. It was never going to work at this time, in this way, and that should have been blindingly obvious to the Department. That it was not is a serious worry. I am afraid there is no escaping the conclusion that this scheme was a slam dunk fail.

“We will need this massive, step change in the way our homes and public buildings are heated, but the way this was devised and run was just a terrible waste of money and opportunity at a time when we can least afford it.”

A Government spokesperson said: “As the National Audit Office acknowledge, the Green Homes Grant voucher scheme was designed as a short-term economic stimulus and was delivered during a global pandemic.

"Despite this and other challenges with delivery, all applications have now been processed, with almost 80,000 vouchers having been issued.

“We have taken the experience of the Green Homes Grant into account when designing new measures, with a commitment to go further and faster by investing £6.6 billion in improving the energy efficiency of our buildings, including £1.3 billion this year alone to upgrade up to another 50,000 homes.”

Read more:

Green homes revolution must be Rishi Sunak's priority - Megan Randles

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