Reflecting on the slow death of Britain’s Green Deal

Many posts have been written in recent years about the rise and then demise of the Green Deal. Andrew Warren, a regular contributor to EiD and undoubtedly our most prolific commenter, writes an important post in the November/December issue of the magazine Energy in Buildings and Industry, questioning who is responsible for its slow death.

 

From insomnia to extinction

This summer, just after Parliament rose for its summer break, the Government unceremoniously killed off its flagship energy efficiency programme.

The Green Deal Finance scheme had initially been intended to be biggest home improvement programme since 1945, improving 15m homes during this decade, according to its lead minister, the Conservative Greg (now Lord) Barker.

He it was who memorably went on BBC Radio 4’s You and Yours programme in March 2013, shortly after a less than triumphant launch. And admitted that “if we don’t have 10,000 Green Deal plans by the end of the year, I’ll be having sleepless nights.”

At the end of 2013, there were under one rather than ten thousand households signed up. Indeed as we now have the final figures for the actual number of finance plans sold before his successors unceremoniously pulled the plug, it seems that poignantly there are still only 9,999 “live” Green Deal plans.

Lord Barker’s insomnia may sadly continue forever, unless one or two plans still under negotiation are finalised.

Originally promoted even before the 2010 General Election by the Conservative shadow energy secretary Greg Clark (now Communities Secretary), the pay-as-you-save concept formed a key component of the formal Coalition Agreement. It then became the subject of a major preparation exercise, certainly within the Department of Climate Change, where at one stage no less than 73 civil servants were fully employed upon preparing Green Deal Finance for launch in autumn 2012.

The 2011 Energy Act enabled any capital expended upon the installation of energy saving devices to be recoverable via electricity bills, rather than by mortgage extensions. This was despite all the initial preparatory work done prior to the 2010 Election concluding that it would be preferable for repayments to be made via the council tax, rather than fuel bills.

Very early on, the fatal decision was made to deem electricity providers, rather than local authorities, the key players. Ironically, since the demise of Green Deal, Lord Barker has overtly blamed the Big Six’s lack of enthusiasm for many of the scheme’s problems.

Three external private sector advisory fora were created. One examined accreditation of businesses operating under the Green Deal, including dovetailing with existing trade schemes. It sought to strengthen standards and consistency of consumer advice. Another concentrated upon skills development and training, and manufacturing R and D. Consequently, a substantial new bureaucracy was created, intended to ensure that the Green Deal trade participants delivered a quality product for the (intended) millions of households which the Government maintained would wish to be involved.

 

Incentivise the market

The final forum (which I chaired) considered policy options that might incentivise the market. As much of this was deemed “advice to ministers”, I suspect I am still constrained from providing too many details of our actual recommendations. After much struggle, we did finally crack the teething problems around involving the private rented sector, but only shortly before Green Deal’s demise.

But I think it fair to draw attention to two specific supportive policies that had been anticipated from other Departments, neither of which was in the end forthcoming.

The absence of these stimuli I know to be one of the main reasons why many of the big high street names, originally touted as probable participants in the Green Deal by Lord Barker in 2010 and 2011, had quietly withdrawn even as we prepared for launch in October 2012.

In his 2011 Budget, the Chancellor George Osborne specifically promised that there would be fiscal changes made prior to launch, which would help stimulate demand for Green Deal Finance. And the one favoured was Stamp Duty differentials, aimed squarely at those moving home, the time when most major improvements are made.

But Budget 2012 came and went without any such direct stimulus, as did Budget 2013. Diminution of interest from potential Green Deal providers continued.

In the fallout from the cutbacks to the Energy Company Obligation in December 2013, a Green Deal Home Improvement Fund was launched in 2014. This did include a stamp duty rebate – worth up to £1,000 – for new homebuyers, which Lord Barker welcomed by expressing confidence this would “drive customer demand”. The Fund certainly did that; each of its three cash tranches was quickly over- subscribed. But it too was abolished this summer, with two-thirds of its originally declared budget never made available.

But more seriously damaging to Green Deal Finance’s prospects was the U-turn regarding “consequential improvements” by former Communities Secretary Sir Eric Pickles. This would have required any householder wishing to expand the carbon footprint of a home sideways, upwards, even downwards, to ensure that the original building met reasonable energy efficiency standards.

The concept went out to consultation as part of the proposed 2012 Building Regulations changes. It received an 84 per cent approval rate from respondees, doubtless noting that the Communities Department’s official Impact Assessment reckoned that this measure alone would be delivering 2.4m Green Deals. But after a mendacious campaign orchestrated by the Daily Mail, who dubbed it a “conservatory tax” – even though it didn’t affect the vast majority of conservatories, and wasn’t a tax – Pickles took fright. And abandoned his own proposal.

It was the failure of these other Cabinet Ministers to deliver, which effectively turned the Green Deal from being (as my forum’s original remit stated) an ambitious programme expected to deliver a 29 per cent reduction in carbon emissions from our homes. Instead, it became an esoteric initiative that appealed, in the end, to far too few, just 38 purchasers out of every 100,000 eligible homes. Green Deal. R.I.P.

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