The House of Commons’ Public Accounts Committee has heavily criticised the Department for Business, Energy and Industrial Strategy for its management of the Green Homes Grant voucher scheme.
“It cost the taxpayer £50m just to administer the pointlessly rushed through Green Homes Grant scheme, which delivered a small fraction of its objectives, either in environmental benefits or the promised new jobs,” committee chair Dame Meg Hillier said.
“It was never going to work at this time, in this way, and that should have been blindingly obvious to the department. That it was not is a serious worry. I am afraid there is no escaping the conclusion that this scheme was a slam dunk fail.”
In a report, the committee said that BEIS implemented the scheme in just 12 weeks in 2020 during the Covid-19 pandemic, despite the business case being rejected by its own projects and investment committee. The result was an overly complex scheme where around half of applications by both homeowners and installers were rejected and contractor ICF Consulting Services failed to implement a digital voucher application system.
It added that the scheme’s administrative costs are likely to exceed £1,000 for each home upgraded, covering just 47,500 properties compared with 600,000 originally planned. Despite the primary aim of supporting jobs, the scheme had a limited impact on employment and its sudden closure may have caused redundancies.
“The department should have considered halting or delaying the scheme given evidence that preparations were not sufficiently progressed,” the committee said in the report.
“We are not convinced that the department has fully acknowledged the scale of its failures with this scheme.”
The report compared the 2020 scheme to previous attempts to upgrade the efficiency of housing, including 2017’s Green Deal, where the since-abolished Department for Energy and Climate received just 14,000 applications with a cost to taxpayers of £17,000 for each loan arranged. Similar problems affected the Renewable Heat Incentive and Warm Front Scheme.
The committee said that despite departmental staff with knowledge of these previous schemes working on the Green Homes Grant, there are questions over how BEIS “maintains and uses its corporate memory” adding that “we are likewise concerned that the department will fail to learn from this scheme”.
It said that the fragmented, stop-go nature of work to improve domestic energy efficiency are hindering the UK’s move towards net zero carbon emissions. In April the Institute for Government made similar criticisms, calling the cancellation of the scheme a “debacle”.
BEIS responded that it has since made progress in this area. “As the National Audit Office acknowledges, the Green Homes Grant voucher scheme was designed as a short-term economic stimulus and was delivered during a global pandemic,” a government spokesperson said.
"Despite this, and despite challenges with delivery, all applications have now been processed, meaning almost 80,000 homes have been upgraded.
“We have taken the experience of the Green Homes Grant into account when designing new measures, with a commitment to go further and faster by investing £6.6bn in improving the energy efficiency of our buildings, including £1.3bn this year alone to upgrade up to another 50,000 homes.”