There was outrage in the home improvement sector on Thursday evening as the very recently announced Green Deal Home Improvement Fund was abruptly closed after the Government said that it’s £120m fund had dried up. This was the press release put out on the main Government website:
Due to overwhelming popular demand, the Green Deal Home Improvement Fund is closed for applications with immediate effect.
A surge in applications over the last two days means the allocated budget has now been reached. All applications received prior to the fund closing that satisfy the terms and conditions and meet the eligibility criteria will be honoured at the original rates.
The Green Deal Home Improvement Fund was set up to help households in England and Wales improve the energy efficiency of their homes.
Parliamentary Under Secretary of State for Energy & Climate Change, Amber Rudd, said:
“The Green Deal Home Improvement Fund is a world first and in a short space of time it has proved extremely popular.
“We were always clear there was a budget which is why we encouraged people to act quickly.
“As a result, thousands more families will now benefit from Government help to have warmer homes which use less energy.”
Earlier this week DECC announced changes to the scheme, caused by the hugely positive response since its launch at the beginning of June.
The Department of Energy and Climate Change will monitor voucher redemption rates and will consider whether to launch a further offer should funds become available.
People interested in improving the energy efficiency of their homes can receive updates about any possible future schemes by firstname.lastname@example.org or call the Energy Saving Advice Service on 0300 123 1234.
In December 2013, the government announced a £540 million three year energy efficiency package and up to £120 million will be available for home energy efficiency schemes from April 2015.
The original article can be found here: https://www.gov.uk/government/news/applications-to-the-green-deal-home-improvement-fund-close
Needless to say, the reaction from Green Deal focused companies was less than positive. Now I haven’t been keeping a close eye on the performance of the GDHIF, but on the face of it the fund appeared to be quite popular and had an effect on the number of assessments being carried out by Green Deal companies. Because of this surge, it looks like the Government had to make changes to the fund to allow for this increase. But today the Government announced that the fund had reached it’s limit and that there was no more money until further notice. The fund only started accepting applications on June 9th. So in a matter of just 45 days that whole budget has disappeared.
Good Or Bad?
On the face of it, the initial £120m budget allocated for the GDHIF looks like a fair old amount. But when you consider how massive the overall home improvement market is, it’s actually only a drop in the ocean. @Greandealcs told me on Twitter Thursday evening that @DECCgovuk had told them £60m had gone in just two days. That seems rather a lot of money poorly shared out in such a short space of time.
The Government spin on this however is likely to be that the fund was a clear success because of how quickly the fund ran out of cash. Well yes that is one way to look at it. But it appears that the status of the fund’s actual cash reserve wasn’t properly communicated, meaning that Green Deal companies have been carrying out assessments for homeowners, at a cost of course, now to never be given the cash that the Government was promising they shall receive. It was this cash which was going to help with the costs of having any Green Deal home improvement works done.
Many small Green Deal companies now face having to go back to their potential clients to tell that them that the assessment they paid for isn’t going to deliver them the cash as they first promised on the advice and information given to them by the Government.
To give you an idea of the impact this poorly managed fund’s closure could have, @Greendealcs tweeted: “#Gdhif was the best thing for #greendeal, can the @DECCgovuk be trusted? We have certainly wasted thousands of £s & redundancies my be req.” Obviously we all hope no one has to lose their jobs because of the farce. But if there is, then the Government can expect a very sharp backlash from the very industry it is trying to help.
The Government have hinted that future GDHIF cash might be available, but not for a while yet. And even if it did become available, has the Government now lost the trust of the companies they are trying to help?