Memorandum submitted by eaga
EAGA—BACKGROUND
— 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 19 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 (eg Imagination Solar). In
the case of solar thermal, the Government limited the supply of
materials to just three 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."[57]
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 £1 spent in terms of employment,
disposable income back into the local economy etc.[58]
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 £60
million in energy bills each year."[59]
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
57 http://www.publications.parliament.uk/pa/cm200809/cmselect/cmenvaud/202/20202.htm Back
58
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. Back
59
http://www.hm-treasury.gov.uk/d/Budget2009/bud09_chapter7_193.pdf Back
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