· eaga welcomes the opportunity to respond to the Environmental Audit Committee inquiry into Green jobs and skills.

· In order to put our comments into context, it may be helpful to briefly outline our role in the provision of services across the UK and Ireland.

· eaga is the largest provider of residential energy efficiency solutions in the UK; we are a co-owned business working for DECC, The Welsh Assembly Government and Department for Social Development in Northern Ireland and the Scottish Government. As well as our services to Westminster and devolved nations we have also worked closely with Utilities and Local Authorities in managing the delivery of energy efficiency programmes throughout the UK for the past nineteen years. Since our establishment in 1990 we have grown considerably and now employ more than 4,500 Partners, the vast majority of whom are connected to our energy efficiency work.

· We have also pioneered the development of Benefit Entitlement Checks (BEC) throughout the UK. This is a telephone service that offers confidential advice to people regarding the benefits they claim and what further benefits they may be entitled to. Through its dedicated team, eaga has delivered more than 220,000 BECs to date.

· As well as our energy efficiency and social commitment through BEC, we are committed to helping the environment and combating climate change. eaga Renewables provide renewable energy solutions to private housing, specifically through the installation of solar thermal panels. This work is carried out in the private sector, both with private-funded work and public-funded work (notably the current Welsh Assembly Government pilot on renewable energy that forms part of HEES).

· For further information on eaga and our work across all sectors please visit www.eaga.com

The degree to which the Government's long-term policy framework, including environmental regulations, tax changes or new market instruments, will encourage low-carbon investment and increase employment in environmental industries and their associated supply chains;

1. eaga believe that these initiatives have the potential to increase employment in environmental industries however we have concerns that new initiatives have to be managed carefully in order to fulfil their potential. In particular, the move from EEC to CERT witnessed great dislocation for insulation companies as energy suppliers started to close down programmes 6 months or more ahead of the new programme. Therefore we would also recommend that in moving to any future programmes, it is important to ensure that industry capacity, and the extent to which initiatives integrate with existing programmes are assessed. Without effective action many thousands of jobs could be at risk if existing funding streams are closed down. This situation was also evident under the Low Carbon Building Programme Phase 2, which actually led to some companies going out of business because they were excluded from the scheme (e.g. Imagination Solar). In the case of solar thermal, the Government limited the supply of materials to just 3 companies thereby excluding the vast majority of solar panel manufacturers. Therefore eaga would recommend that procurement processes are open to all the relevant accredited installers within that sector and have an additional aim of ensuring the development of regional training and employment opportunities.

2. We believe that greater low carbon investment would be feasible if Government initiatives provided greater long term incentives and opportunities for investors. Despite the long-term policy framework, programmes such as the Low Carbon Building Programme are based on short term funding and in this case, the Low Carbon Building Programme was launched in 2006 and is due to cease in June 2009. Such short term commitments make it difficult for employers to invest particularly as the emergence of these new green technologies remains a relatively new risk for many.

· Whether the changes in public spending intended to help tackle the recession will maximise employment opportunities in environmental industries;

3. We believe that the changes in public spending such as the reduction in VAT are welcome; however these could be more ambitious in scope. For householders who are on welfare benefits and who are eligible for assistance through Government funded programmes such as Warm Front, VAT levels are 5%. However for those householders who are not on welfare benefit, the VAT level remains at 15%, which in many cases will act as a deterrent to investing in energy efficiency measures. We would suggest that VAT levels for all householders wanting to invest in energy efficiency measures or renewable technologies should be set at 5%. Our experience is that this would help stimulate the 'able to pay' market and as such encourage investment and employment in this area.

4. We also agree with the findings of the Environment Audit Committee Report into the Pre Budget Report, 2008 and in particular the recommendation that - "Retrofitting existing buildings with energy efficiency and renewable generation measures would be labour-intensive and fast to implement. They could sustain employment in local communities throughout the country, and could develop skills and supply chains required in what will be a long-term growth sector. We will not achieve our carbon goals without significant action in retrofitting housing, and ensuring sustained activity in this area would cut emissions, reduce fuel poverty, and enhance the UK's energy security."[1] One way to encourage such retrofitting would be to examine VAT levels.

· the economic and social benefits of planned green investments and the extent to which the changes in spending will contribute to sustainable development and environmental protection;

5. We believe that the economic and social benefits of planned green investments and the extent to which the changes in spending will contribute to sustainable development and environmental protection cannot be under-estimated especially in relation to sustainable development and economic growth in "poorer communities." From experience we know the impact that energy efficiency services can have on these communities, and the vulnerable householders and families that reside within them. Recent research funded by the independent eaga Charitable Trust has shown that energy efficiency and fuel poverty interventions on a local level not only assist those most vulnerable households with cheaper fuel bills and warmer healthier homes, but also help the economic growth and regeneration of these communities - studies in the North East of England indicating a gross value added to the economy of 82 pence per Ł1 spent in terms of employment, disposable income back into the local economy etc[2]. What this research clearly demonstrates is that fuel poverty/energy efficiency intervention schemes have a win/win - helping the most vulnerable in society whilst regenerating local economies.

· the nature of the jobs that might be created in green industries as a result of the green fiscal stimulus;

6. We agree with the 2009 Treasury document - "Building a Low Carbon Recovery", which states that "Saving energy is the easiest way to cut carbon emissions, saving households and businesses money" and that "Together, these measures will support employment, and save 380,000 tCO2 and around Ł60 million in energy bills each year."[3] Therefore eaga believes that the nature of these jobs will be within the retrofit energy efficiency sector - as this has a direct impact upon both the environment and the householder income, which is important during the current economic climate. To ensure the long term sustainability of these jobs there has to be investment in the skills base of the UK. Our belief that investment in the skills base is fundamental is reflected in the recent launch of our eaga Apprentice Scheme which is aimed at ensuring that there are sufficiently trained heating engineers, renewable technology engineers and insulation installers for the future.

7. In this regard, eaga welcomes the support which the Regional Development Agency, One North East has provided in relation to green industries, as part of its regional policy framework. One North East has demonstrated a real commitment to the development of green industries and eaga has experienced this first hand through their financial support for the development of the Solar Thermal School Demonstration Unit, One North East. This support has been also evident in relation to the Community Energy Solutions initiative, which is funded by One North East and Yorkshire Forward.

· the skills base for the UK environmental industries, and the effectiveness of Government policies to improve and enlarge it.

8. As referenced earlier, eaga have established our own Apprentice scheme which we believe will help improve the skills base in the energy sector; however more needs to be done. We welcome other initiatives in this area such as the Jobcentre Plus Energy Efficiency Employment initiative however we have concerns that this initiative does not offer enough depth in training, and will only assist with funding for employers once the individual has been recruited. During these times of economic uncertainty, this serves as a barrier to the employer and also the individual wishing to develop their skills. These barriers have knock-on consequences for the energy sector as a whole. Therefore eaga would recommend that the funding of this and other such initiatives are reviewed by DIUS, DWP and BERR in order to remove these barriers and ease the deficit in measures and skills.

9. We believe that the priority has to be ensuring that the strategy for skills is effective and timely rather than being led - eg the Feed in Tariff and Renewable Heat Initiatives will increase investment and jobs in the UK however this has to be managed. It is important that to maximise the benefits, steps are taken to align skills training and business investment to these initiatives otherwise we end up in a situation where demand outweighs the response, an example of this is the speed of response from Job Centre Plus on the provision of insulation training - essentially Job Centre Plus was behind the curve.

22 May 2009

[1] http://www.publications.parliament.uk/pa/cm200809/cmselect/cmenvaud/202/20202.htm

[2] Modeling the North East Economy: The Impact of Fuel Poverty Intervention on Economic Activity in the North East of England" Lynch, D and Ritchie, N 2008.

[3] http://www.hm-treasury.gov.uk/d/Budget2009/bud09_chapter7_193.pdf