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The much-heralded Green Homes Grants Scheme to help landlords with the cost of improving homes is in tatters.
The flagship scheme offered to pay for two-thirds of the cost of energy-efficient improvements to rental homes up to a maximum £5,000. In his last Budget, Chancellor Rishi Sunak put £1.5 billion in to the pot to pay for the grants, which are open to homeowners in England. The scheme was a crucial part of Prime Minister Boris Johnson’s plan to kickstart the economy by supporting 100,000 builders, electricians and plumbing jobs while cutting carbon emissions and energy bills.
But by January 22 2021, only £71 million had been paid to homeowners – less than 5% of the money set aside for the grants.
Applications took up to five months to approve, while installers laid off staff because they were waiting for tens of thousands of pounds to fund work under the scheme. The scheme was due to end on March 31 but has already been extended a year to March 31, 2022 due to the problems. However, the government has pulled back hundreds of millions in grants.
Business minister Ann-Marie Trevelyan answered a question from Labour MP Catherine West, who demanded to know if the unspent cash was being rolled over into the next year of the scheme or if the fund was likely to be topped up with more money.
“The original funding for the green homes grant voucher scheme was announced as a short-term stimulus, for use in the 2020-21 financial year only,” said the minister.
“In the 2020 Spending Review, the Chancellor of the Exchequer announced £320 million of funding for the Green Homes Grant Voucher Scheme for 2021/22, as part of funding allocated to make homes and buildings more energy efficient and less carbon intensive.”
Effectively, the minister has said that the green homes grant is only funded to £320 million – slashing £1.18 billion from the scheme. Westminster’s Environmental Audit Committee also scrutinised the Green Homes Grant program.
Research by the committee revealed only 20,000 landlords and homeowners have received a cash voucher to carry out work under the scheme. The committee says that at the current rate of 156 vouchers a day, fulfilling the scheme’s target of issuing 600,000 vouchers would take more than a decade. Another criticism was a lack of certified workers to complete projects under the program.
EAC Chairman, Philip Dunne, said:
“The principle of the Green Homes Grant should be commended. It is a timely initiative not only to boost the energy efficiency of homes – which is urgently needed to stem carbon emissions – but to address our growing unemployment crisis triggered by the pandemic. But this scheme will fail to deliver its ambition unless overhauled and extended.
“Many of the builders and installers that can do the work are in limbo as a result of the time taken to approve applications. And perversely, we have heard evidence some are having to lay off skilled workers as orders have been stalled pending confirmation of vouchers.
“This scheme has good potential. But it needs a radical overhaul now the scheme has been extended.
“It must streamline the application process by removing unnecessary bureaucracy and must make sure the supply of skills meets the demand that 600,000 vouchers, and a further boost by the Chancellor in the March Budget, would drive. By doing so, it could make large strides towards meeting other Government commitments, such as installing 600,000 heat pumps every year by 2028.”
The minister’s announcement has triggered scathing criticism from the building sector. UK Green Building Council director of policy John Alker summed up the feeling:
“The problems with the scheme have not been about consumer appetite, but with the scheme’s administration, with householders having to wait months in some cases and installers having to wait similar amounts of time to get paid for works done.
“Stop-start policy of this kind is extremely counter-productive for businesses looking to invest in delivering a green recovery, and it is disappointing to see that lessons that should have been learned from the fate of previous schemes appear to have been missed.”
Here’s an explanation of how the Green Home Grant works for landlords. The rules are slightly different for homeowners.
The Green Homes Grant is a two-tier process. First, landlords must improve at least one of the following:
Then, landlords can claim extra money for:
The official source of information is the Simple Energy Advice (SEA) service.
The scheme does not cover DIY installations – an approved installer must carry out the work with a TrustMark registration.
No. You must contact an approved tradesperson to survey your property and include the report with an application. Once the application is approved, the work is done, and a voucher is sent out to cover the agreed cost.
Landlords can claim up to two-thirds of the costs of improvements up to a maximum of £5,000 a property. There’s no limit on the number of properties a landlord can apply for. The maximum grant is £5,000 a property, not a portfolio.
These claims are only open to homeowners on low incomes, not landlords.
The hope is energy efficiency improvements would cut around £600 from domestic fuel bills while the grant scheme would lead to 100,000 new jobs for tradespeople carrying out the grant work.