Six months. That’s all it took for the Green Homes Grant to be announced, then closed. The scheme shuts to new applicants from the 31st March of this year. One full year before the extended deadline of March 2022.
For months there had been warnings about how the scheme was run, about low participation rates from companies, about poor communication to both businesses and the general public, and a shortage of companies meaning consumers who were interested was unable to find companies to undertake the work. Sadly, the inevitable was announced over the weekend and the scheme is to close.
What was supposed to be a cornerstone of the Government’s green agenda collapsed spectacularly. Here is why, plus my thoughts on what should happen next.
Good idea, poorly executed
There was no question there was demand from the public for this. We know very well as an industry how much demand there is out there for home renovations right now. And if the public thought they could get some free money to do it, well that only galvanised that demand.
Yet, from the start, the scheme was poorly delivered and badly organised. Like most things from Government, communication of the scheme to both the public and industry was poor. There was no major TV, radio or online campaign. The dedicated website for the scheme was poor and not well advertised. The application process to become a supplier of energy efficiency measures was terribly complicated. You only need to search the forums to find companies deeply frustrated at the process.
That is only a brief summary of the problems. From a fenestration sector point of view, interest in the scheme was killed right at the start when new windows and doors were put on a secondary list of measures a homeowner could have installed. The problem here being that a homeowner could only access the secondary measures list once they have agreed to undertake a range of primary measures, much of which revolved around insulation of various kinds. We quickly realised as a sector that once money from the £5k grant had been spent on all that insulation, there would be very little left to put towards new windows. Such a massive demotivator, especially when you consider that the industry is drowning under too much work already, from people with spare cash to pay for it. There was no motivation to sign up to a complicated buying method where you might win an order for new windows from a very narrow field of properties that eligible and where there would be just the scraps of a grant left over to put towards it.
Splitting the scheme into two lists of products was always going to work against the scheme. Those on the primary list were always going to be happy. Those selling and fitting insulation are going to be very disappointed in the news. Sectors involved with products on the secondary list are probably not going to be missing much.
Then there was the PAS2030 requirement. A significant proportion of installers in fenestration do not have this certification. Some do, but not all. In order to access the Green Homes Grant you had to be PAS2030 certified. Again, when there is mountains of work coming in and more than enough issues for installers to tackle right now, having to gain another accreditation, no matter how simple, was always seen as a further hurdle to just become registered to the scheme.
Looking at this from a fenestration perspective. This was never going to work for our sector as a scheme. Replacement windows and doors are perhaps one of the most expensive home improvement you can make. Compared to the cost of a new boiler or insulation we’re significantly more costly. Was the Government ever going to really allow new windows and doors on to the primary list? No. The £5k would have been swallowed up and then some. I remember at the time the hype around the scheme and the faint possibility that new windows might be included in the primary list. Then clarification came.
Separate to this was the general organisation of the scheme. You get the sense that there was very little consultation with actual companies in the sectors involved. Companies complained that the process to simply join was wildly too difficult and needed rapid simplification. Homeowners found the process of applying difficult too. A complaint that was common with the Green Deal from a decade ago. The problem with schemes like this is if they are made confusing and difficult from the start, both for business and the public then interest in it is going to rapidly fall away on both sides. You then end up in the position we find ourselves in now.
It’s worth noting that the running of this scheme was outsourced to an American company for tens of millions of pounds. An astounding decision and will once again call into question the handling of Government contracts, procurement and how it spends public money.
What will work?
As the scheme was nearing the end, there were numerous reports that the smattering of companies that did manage to do work under the GHG were waiting months, sometimes three or four months, to be paid for the work they have done. That is simply unacceptable and there will be questions to ask of the Americans who ran the scheme as to why these companies were not being paid for the work they did.
In the end, the Green Homes Grant funded roughly 60,000 improvements. A tenth of what was originally planned. The money that was allocated to the scheme is now going to be redistributed to local councils who will fund renovations to homes that need it through more devolved initiatives. Something that has been working more effectively for a longer period of time.
So this does call into question why this was dreamt up in the first place, and if we are to make a serious dent in the carbon emissions of our current housing stock, what will work?
The Green Homes Grant was designed to be a central pillar of the Government’s green agenda. A ten-point plan announced by the PM designed to transform the UK’s climate change efforts. The pillar now lays broken and crumbled, just six months on, for the reasons stated above and more. This follows another disaster with the Green Deal a decade ago. A scheme that suffered very similar problems and fell to the same fate.
For me, the simple matter here is that schemes and initiatives like this do not grab public attention in the way we would like. As much as we would like to think we are, our sector, along with insulation and ground source heat pumps are not as sexy as eating out in a restaurant or buying a new car. Those worked because the public love eating out and cars are a far sexier product, therefore they are easier to engage with. Therefore I think a change of approach is needed. New schemes are complicated. They need building from scratch. They need regulating. They need eligibility requirements. They need a standardised approach. Ergo, complicated.
If the Government wants to grab the attention of the public and encourage more to upgrade their windows (although right now not much encouragement is actually needed), or insulate more, or replace old and polluting boilers, it’s time to look at VAT. Insulation is subject to 5% VAT. New boilers however you pay 20% on, as you do with windows and doors. Lots of attention has been placed on insulation for homes in the past ten years or so, but very little energy has been spent looking at fenestration, despite old windows and doors being one of the biggest contributors to heat loss in a home. If you want to grab the attention of the public to look at changing their windows, announce that they will only have to pay 5% VAT on energy-efficient upgrades. When it comes to money, people are VERY in tune with that. A 15% saving will certainly hit the radars of many. It wouldn’t be difficult to implement, and you can be almost certain that there would be a boosting of interest in fenestration because of it.
We have to accept that when it comes to the methods of purchasing home improvement products, the current ways are the most effective. We have now had multiple schemes fail because they have tried to reinvent the wheel and made it hugely more complicated. We need to look at how we incentivise the existing purchasing infrastructure and build around that. People know it, they trust it, they do it every day. For me, that would be a good place to start.
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