Only 1% of households took out loans under now abandoned scheme, which auditors say failed to deliver ‘meaningful benefit’. Under the scheme, householders could avoid the upfront costs of insulation, paying it back with savings on bills. Written by Rajeev Syal for http://www.the guardian.com
An abandoned government programme to insulate UK homes cost taxpayers nearly £400m and did not deliver energy or carbon savings, a report by official auditors has found.
The green deal scheme was launched in January 2013 with the intention of handing out loans to improve domestic energy efficiency. It folded in July 2015 despite claims by David Cameron that his would be “the greenest government ever”.
The National Audit Office has examined the scheme for the first time and found that the Department for Energy and Climate Change spent £240m on the scheme.
Another £154m has been spent on the green deal home improvement fund which was set up to provide subsidies for efficiency measures, auditors found.
They said 1.4 million homes benefited from measures ranging from new boilers to insulation by the end of last year under government schemes, but just 1% of households took out “green deal” loans. Around 14,000 households opted for the loan scheme but the numbers fell far below expectations, the report said.
Meg Hillier, chairwoman of the public accounts committee, said the report shows ministers and officials had little idea how to implement the scheme.
“The Department of Energy and Climate Change has been flying blind when it comes to implementing the green deal and energy company obligation (ECO),” she said. “The schemes have cost over £3bn to date, but the department has achieved little energy savings compared to previous schemes,” she said.
Improving energy efficiency in the UK’s 27 million homes, which are responsible for more than a quarter of the country’s energy demand and greenhouse gas emissions, is seen as key to tackling climate change, energy security and fuel poverty.
Under the scheme, householders could avoid the upfront costs of insulation, efficient heating systems, draught proofing, double glazing and renewable energy generation such as solar panels, paying back the cost of their installation with savings on bills.
But the loans were too expensive, the scheme was frequently changed and householders did not take up the finance plans at the expected rate, according to its critics.
The scheme’s failure to persuade households that energy efficiency measures were worth paying for meant it cost the taxpayer £17,000 per loan plan, the report said.
Auditors concluded the green deal did not achieve value for money and delivered “negligible” carbon savings.
The design of the ECO, which requires suppliers to install energy saving measures in homes to cut carbon emissions, was also examined by auditors.
The £3bn ECO scheme, whose costs are passed on to consumer bills, saved only around 30% of the carbon emissions of previous programmes, partly because of an initial focus on “harder to treat” homes which cost more to make efficient.
Taken together, the government’s various energy efficiency schemes have cost £94 for each tonne of carbon they saved, significantly more than the £34 per tonne of carbon dioxide of the schemes they replaced.
Amyas Morse, head of the National Audit Office, said: “The Department of Energy and Climate Change’s ambitious aim to encourage households to pay for measures looked good on paper.
“But in practice, its green deal design not only failed to deliver any meaningful benefit, it increased suppliers’ costs – and therefore energy bills – in meeting their obligations through the ECO scheme. The department now needs to be more realistic about consumers’ and suppliers’ motivations when designing schemes in future to ensure it achieves its aims.”
Lisa Nandy, the shadow energy secretary, said: “This damning report shows it isn’t just the energy companies who are short-changing their customers, it’s the Tories too. Investment in energy saving should be a national priority but these schemes are so badly designed they are ripping people off and failing to target those families who need help the most.”
A spokeswoman for the Department of Energy and Climate Change said: “The government is clear about the need to have firm financial controls in place to protect consumers, which is why we took action last July to address the issues in this report – stopping funding to the Green Deal Finance Company and setting up an independent review of the energy efficiency sector.
“We are now designing a new scheme that will help make even more homes warmer and bring people’s bills down.”
This article was amended on 14 April 2016. The original version wrongly stated that the green deal scheme had folded in July 2013, instead of July 2015.
Source: The Guardian