In light of low take-up and concerns about industry standards there will be no further funding to the Green Deal Finance Company, in a move to protect taxpayers.
The Government will work with the building industry and consumer groups on a new value-for-money approach, Energy and Climate Change Secretary Amber Rudd has announced. Amber Rudd also confirmed that the Government will stop any future funding releases of the Green Deal Home Improvement Fund.
Future schemes must provide better value for money, supporting the goal of insulating a million more homes over the next five years and the Government’s commitment to tackle fuel poverty.
This decision has no impact on existing Green Deal Finance Plans or existing Green Deal Home Improvement Fund applications and vouchers.
The British Property Federation (BPF) has urged the Government to ensure that its failure does not impact on the ability of property owners to comply with the incoming Minimum Energy Efficiency Standards.
The BPF is concerned that there are many property owners who would have been relying on the Green Deal to finance energy efficiency improvements and reach Minimum Energy Efficiency Standards.
Although the Green Deal has suffered from low uptake and there have been concerns over the quality of installations, the BPF hailed its pay as you save model as an imaginative and novel approach to improving the energy efficiency of the nations’ housing stock. The BPF has welcomed the announcement that those who have existing Green Deal plans will not be affected by today’s action.
Ian Fletcher Director of Policy (Real Estate) commented: “It won’t come as a surprise to many to see that the Government has decided to end its financing of the Green Deal Finance Company. Many will use this as an opportunity to bemoan the scheme and its failings, but of greater importance is where we go from here. The end of the Green Deal will impact on many other policy areas including the Minimum Energy Efficiency Standards (MEES) passed by the previous Government, which was designed to dovetail with a pay as you save energy efficiency scheme.
"We are concerned that without a functioning pay as you save scheme, the premise set out in the regulations that meeting energy efficiency targets should come at no upfront cost to the property owner is now in jeopardy.
"The end of the Green Deal should not be associated with an end to the Government’s support for helping people to achieve warmer homes that are cheaper to heat and better for the environment and we look forward to working with officials on its replacement, but engagement needs to proceed quickly in order that we do not lose momentum or capacity in the market.”
The announcement comes as part of Government’s wider review of energy policies. The Energy and Climate Change Secretary has confirmed that her first priority is to get spending under control.
Amber Rudd said: "We are on the side of hardworking families and businesses – which is why we cannot continue to fund the Green Deal.
"It’s now time for the building industry and consumer groups to work with us to make new policy and build a system that works.
"Together we can achieve this Government’s ambition to make homes warmer and drive down bills for 1 million more homes by 2020 – and to do so at the best value for money for taxpayers."
The Government has commissioned an independent review led by Peter Bonfield to look at standards, consumer protection and enforcement of energy efficiency schemes and ensure that the system properly supports and protects consumers.
Current Government policies including the Energy Company Obligation (ECO) scheme will continue to provide support this year to low-income and vulnerable households, reflecting the fact that ECO delivered 97% of home improvements in the last two years.
DECC will work in partnership with the Department for Communities and Local Government to improve the UK’s existing housing stock. The longer-term future of the Energy Company Obligation scheme will be part of these discussions around a new, better-integrated policy.
