The Green Homes Grant Voucher Scheme (the Scheme) underperformed badly, upgrading around 47,500 homes compared to the 600,000 originally envisaged, delivering a small fraction of the expected jobs and accounting for just £314 million out of the original £1.5 billion budget. Administration costs are likely to amount to more than £1,000 per home upgraded, totalling just over £50 million in all.
We are not convinced that the Department has fully acknowledged the scale of its failures with this scheme. The failure to deliver this scheme continues government’s troubled record of energy efficiency initiatives and risks damaging the Department’s future efforts to harness both consumer and industry action to deliver Government’s net zero commitments. The Scheme was implemented as an urgent response to the COVID-19 crisis, aiming to support jobs at a time of significant risk for the economy while also reducing carbon emissions from homes. Despite these commendable intentions, the 12-week timescale to implement the Scheme was unrealistic and imposed constraints on its design and implementation. The Department proceeded with the Scheme despite its own Projects and Investment Committee rejecting its full business case. The Department should have considered halting or delaying the Scheme given evidence that preparations were not sufficiently progressed.
What resulted was a scheme with poor design and troubled implementation - the Department did not consult meaningfully enough with industry and consumers, leading to an overly complex scheme design with poor customer experiences and a lower uptake than envisaged. By August 2021, 52% of homeowners’ voucher applications were rejected or withdrawn, and 46% of installer applications failed. The Scheme also struggled due to the failure of its scheme administration contractor, ICF Consulting Services Ltd (ICF), to successfully implement the required digital voucher application system. The Department acknowledged that it should have had a better technical understanding of the preferred bidder’s proposed solution, and that, had it done so, it may have had sufficient warning that ICF would be unable to implement the required system successfully. The Scheme’s primary aim was to support jobs, however, the Scheme’s design and duration limited its impact on employment, and its abrupt closure may have in fact led to redundancies. Government needs to stick to a stable, long-term plan, to renew the confidence of industry and consumers in taking the actions needed to realise Government’s net zero ambitions.
It is a matter of concern that green homes schemes have repeatedly been short term and have underdelivered on over optimistic promises on green targets and job creation. The department needs to consider carefully how to approach such schemes in future.