The Green Homes Grant
In September 2020, the government’s long awaited, and much touted Green Homes Grant was launched. The scheme aims to help individuals make improvements to their home that will help them to lower their future heating bills and make their home more environmentally friendly in the process. The scheme is now scheduled to run until 31st March 2022 after it was granted an extension in November 2020; this means that all work that receives funding under the scheme will need to be completed before that deadline if people want to take advantage of the help that is being offered.
Grant Eligibility – A Recap
It’s been a little while since the full details of the scheme were announced and let’s face it there has been so much going on this year, so her we give you a recap of what the Green Homes Grant is offering to people and who is eligible.
Briefly, the scheme was set up to offer people funding of two thirds, up to a total of £5000, on any work that they had carried out on their homes from the approved list as laid out by the government. These improvements were laid out in two categories, primary and secondary home improvements. Homeowners were able to do as many improvements as they wanted but in order to qualify for the grant one of these improvements needed to fall into the primary category which includes:
- Insulation - Cavity wall, loft or floor
- Low carbon heating - ground source heat pump, solar thermal panels, air source heat pump of biomass boiler
There are the improvements that can make the biggest difference to a property. Secondary measures, which included double or triple glazing (if there was only single in place), draught proofing and energy efficient doors are also allowed but only in addition to one of the primary improvements.
Low-income houses are eligible for a grant of up to £10,000 again, with two thirds being paid by the government and the remainder of the bill being funded by the landlord or homeowner.
It is also important to note that both homeowners and landlords are eligible for help under the scheme but not new build properties, which should have been built with energy efficiency in mind, and commercial properties.
How is the Scheme Going?
Before the scheme was launched, there was significant praise for the government for the help. After all, they were offering to allow people to “green up” their homes. The total funding that the government had put aside for what they hoped would be a scheme with significant take up was £2 billion.
A quick google will show you that whilst there has indeed been much praise for the scheme which should help thousands of people and allow them to reduce their energy bills over time, there has also been quite a bit of criticism from homeowners.
In the first instance, the application process itself is causing several issues, and when they do manage to complete this it would appear that there is a significant lack in the availability of accredited tradespeople to actually do the work. Those tradespeople who wanted to be able to offer work under the scheme were required to be accredited to prevent any fraudulent work being carried out under the scheme.
What’s the problem with the application process?
The main issue with the application process appears to be that it was rather “clunky”. Over 80% of those trying to apply for a grant found it very difficult to use, and almost 75% having wrestled their way through it found it difficult to find a registered contractor, a process which left them feeling somewhat dissatisfied. When help is available like this it can often be the push that people needed to start making their homes greener, of course when it feels like the process is too difficult or complex then only a handful of people will actually persist, which, of course, is not what the government were hoping for.
Unfortunately, this is not where the problems ended. Homeowners trying to get grants under the scheme had issues with complex amounts of paperwork, incredibly poor access to accredited tradespeople and then there were the delays they encountered with the vouchers for the grants themselves.
Grants are given in the form of a voucher and these are valid for three months from the date that they are issued on, or until 31st March 2022, whichever is sooner. So, if you apply for a voucher you then have just three months in which to get the work done by one of the small numbers of accredited tradespeople who are registered with the scheme. For those people who are living in areas of the country where the scheme has proved to be particularly popular this means that finding someone who can do the work in that timescale has been difficult. Homeowners can ask for an extension on their voucher in respect of circumstances that are not within their control. However, it is a little unclear if not being able to find a tradesperson to complete the work falls into this category.
The first set of vouchers that were due to have been distributed under the scheme were reportedly rather delayed, which meant that there were delays in the already tight timeframe for people to be able to start getting work done.
To date, it is believed that around 20,000 vouchers have been issued. This is certainly not the number that the government was hoping for – the government are hoping to upgrade around 600,000 homes under the scheme. At the current rate of rollout for the vouchers it will take the government 10 years to reach the targets they have set for the scheme. This rate of take up, however, indicated there around 5% of the original budget that the government has set aside for the project has been spent so far.
Where has the money gone? – What the Government didn’t tell us
When the scheme was originally announced, the government were very clear that they were investing a staggering £2 billion into helping people to make their homes greener and reduce their energy bills. The Green Homes Grand voucher scheme was their commitment to the environment and helping the UK to reach the targets that they as a country had set for the UK.
However, just earlier this month, they dropped a huge bombshell that will have a significant impact on the future of the scheme. Don’t forget they have already extended the deadline that the scheme will run until. Now the scheme will see a slash in funding of around £1.5 billion by April, meaning that in fact it will have been cut by a staggering three quarters of what they had originally proposed.
Of the original budget of £2 billion, they stated that £1.5 billion was “earmarked” for use by households whilst the remaining £500 million was to be diverted to local authority led schemes.
One thing that they certainly did not make clear when they launched the scheme was that this original funding amount of £2 billion was in fact only for use during the 2020/21 financial year, which will of course come to an end at the beginning of April. Any cash that has not been used as part of the scheme will not be rolled over into the following tax year. This means that with the take up standing at just 17,618 vouchers on 26th January 2021 there has in fact only been £73.1 million spent on the scheme. It doesn’t take a mathematical genius to work out that there is a huge chunk of that original funding that will therefore not be used and instead simply revert to the government.
That is unfortunately only the tip of the iceberg when it comes to the scheme. It has been confirmed that the funding for the scheme that has been set aside for 2021/22 is just £320 million. Just to be perfectly clear here the original funding for the scheme was £2 billion and even is the entire fund for 2021/22 is utilised then there will only have been an investment of around £400 to £450 million (allowing for some rounding up for the current tax year).
What has happened?
This was a scheme that was hailed by environmental groups, ministers and well pretty much everyone as a fantastic idea. It was touted as something that would not only help the environment but also help homeowners to decrease their annual energy bills, in some cases by as much as £600 and add value to their properties through the improvements that the scheme offered. However, despite the initial promise, the Green Grants scheme has been nothing short of a flop.
The UK governemt would have you belive that part of the failure of the Green Homes Grant was down to Coronavirus! Also that when the government originally laid out their plans for the scheme there was no indication that we would be about to endure a global pandemic of the scale that we have encountered. It is true that nobody could foresee what was coming but here at HouseWrapped we think this is a blatent attempt to detract from the true reasons for this scheme not working.
This absolute fiasco has been down to mis-management, over bureaucracy and in our opinion a rush by the UK government to put out some good news and to be seen to be doing something! It's a real shame that the government didn't put as much effort into making sure the scheme worked smoothly as they did to making a big (aren't we a good eco friendly set of bureaucrats) noise when announcing the scheme!
This is not the first time that the government has tried to implement a workable carbon reduction scheme and failed. It seriously makes us here at HouseWrapped lose faith in decision makers in government, why can't they consult the installers who are all doing the actual work? Surely this would be a logical step to creating a workable successful scheme!
Of course, it is a catch 22 situation. These people finding themselves on a reduced income are the very people who the government were hoping to target with the scheme. And with an extra cold winter now upon us these savings on energy bills could have made a huge difference.
A short-sighted decision?
The government are keen to keep reminding the population about speedy role out of the vaccine for Covid-19 in the UK, and the fact that we are significantly ahead of other countries in Europe with our vaccination programme should mean we can return to a more normal way of life as soon as possible. This means businesses opening back up again, and the economy starting to recover from the impact of the events of the last year.
This also means that people may once again be able to consider having work carried out on their homes, not only because they feel safe enough to allow tradespeople in but also because they can afford it financially. Of course, the withdrawal of such a huge part of the funding that was available under the Green Grants Scheme is no longer there and without this incentive it is highly probable that people will not in fact be able to fund all the work themselves.
And this means one very simple thing. Without the funding people are unlikely to make the improvements that the government wants them to make for them to reach the goals that they themselves have set as part of their commitment to the environment. Whilst they may very well argue that the money is needed elsewhere now this commitment to the environment has long lasting implications for the future. The decision not to roll the funding over from this tax year to the next given the extraordinary circumstances that have occurred seems more than a little short-sighted.