Chancellor of the Exchanger, Rishi Sunak, is to lay out a £2 billion grant scheme for energy-saving home and public building improvements.
Under the ‘Green Homes Grant’ scheme, vouchers of up to £5,000 will be given to homeowners for insulation as part of a wider £3 billion plan to cut carbon emissions, the government has announced.
The most vulnerable households will be able to receive higher grants of up to £10,000 when the scheme goes live in September.
The Treasury is estimating at least 100,000 jobs will be supported by the investment.
Measures under the investment include:
- A £2 billion Green Homes Grant with vouchers up to £5,000 available to help homeowners upgrade their homes, with up to £10,000 available to the most vulnerable households.
- A £1 billion programme to make public buildings, including schools and hospitals across the UK greener.
- £50 million to pilot innovative approaches to retrofitting social housing at scale.
- £40 million Green Jobs Challenge Fund.
While the Green Homes Grant will see the government fund at least two-thirds of what energy-saving home improvements cost, those who rent appear to be excluded from the scheme.
Labour’s Shadow Business Secretary, Ed Miliband, says the party supports the scheme, however: “It appears there is almost nothing for the people who rent the 8.5 million homes in the social rented sector and private rented sector, which has the worst energy efficiency standards. That means one-third of people are left out.”
Industry reaction to the Green Homes Grant scheme
The Builders Merchants Federation (BMF) has welcomed the Chancellor’s Green Homes Grant scheme, which is set to support energy saving projects for householders in England, as well as creating new jobs and leading to innovations in the insulation sector.
Builders’ merchants will play a leading role in the scheme with a significant proportion of insulation materials in the UK distributed through merchants. The total market is valued at £1.2 billion, a figure that is likely to rise on the back of the government incentive.
According to the BMF, the move will help make a significant impact in addressing the carbon emissions of the nation’s housing stock – accounting for 40% of total emissions – as well as improving the comfort and lowering energy bills in many thousands of homes.
John Newcomb, chief executive of the Builders Merchants Federation (BMF), said: “We welcome the Chancellor’s proposal which will provide the confidence, incentive and support to homeowners to undertake the necessary upgrades.
“It is also extremely good news for the building materials supply industry, as it is likely to bring new contractors into the market who will require just in time site deliveries. Our understanding is that the scheme will be delivered by a network of Trustmark-approved installers, and we will be talking with both Trustmark and the government to encourage their use of local merchants from our network of some 5,600 branches throughout the UK.”
Meanwhile, Julie Hirigoyen, chief executive of the UK Green Building Council (UKGBC), welcomes the announcement of £3 billion as a “first step”, but warns that it is essential that the funding announced is not just another “one-off that creates boom and bust in the energy efficiency industry”.
She said: “This funding needs to be part of a comprehensive plan to improve the whole of the UK’s building stock, creating tens of thousands of jobs for the long term, not here-today-gone-tomorrow.
“That will only happen if policies are put in place that will build business confidence, upskill tradespeople and grow capacity in the retrofit market. The quality of the upgrade work must also be put at the forefront of the government’s approach, with measures in place to ensure work is carried out to the highest technical standards by qualified installers.”
Julie continued: “Government must also set about creating long-term consumer demand for green home upgrades, bringing forward a range of attractive financing options and incentives like variable stamp duty to make greener homes cheaper to buy.”
Elsewhere, the new grants for insulation will provide a welcome boost for small builders, says Brian Berry, chief executive of the Federation of Master Builders (FMB). He said: “This is very good news, signalling both an important step towards building back better and greener, and a vote of confidence for local builders up and down the country. This will protect jobs in construction, and create new opportunities. We must ensure that all the new entrants to the industry receive proper training or apprenticeships, to guarantee that energy efficiency home improvements are delivered by quality tradespeople.
Brian continued: “To secure local growth and level-up across the country, local builders are ideally placed to deliver the work and the scheme must be accessible to small and medium-sized firms (SMEs). The FMB has been calling for a national retrofit strategy and this step will help give the boost to consumer confidence that will be needed. We will push for additional steps such as the development of green finance to support the further development of the strategy, and for the full £9.2 billion pledged in the manifesto to be brought forward. We hope in his statement today [8 July], the Chancellor gives added support to the sector with a temporary cut in VAT, support for apprenticeship delivery, and SME house builders.”
Finally, with half of UK households and millions of businesses lacking adequate insulation, Neil Marshall, an energy efficiency consultant, believes the Green Homes Grant scheme is an “exciting, ambitious and bold move by the government.”
He said: “Investing in insulating homes and businesses provides much needed inward investment and is a win, win boost to the economy – offering cheaper fuel bills and job creation.”
However, according to Neil, it is imperative that the scheme is designed “robustly with lessons learnt from the failed Green Deal Home Improvement Fund in 2015.”
Neil says the following factors need to be considered:
Industry capacity – “The £2 billion investment is likely to require an increase in industry assessment and installation capacity. The scheme therefore needs to be supported by a training and accreditation programme.”
Installer accreditation – “It is essential that the measures are installed by trained, competent and accredited installers and prevent an influx of new entrants without the skills. Therefore, all installers should be registered with the new Trustmark installer quality scheme as a minimum, and new operatives subject to robust ‘carding’ and auditing.”
Property mix – “The funds should be targeted at those households in greatest need – the millions in fuel poverty and those people who do not currently receive support to fund measures including owner occupiers and tenants in the private rented sector.”
Independent advisory board – “The scheme needs to be supported by a robust business plan for the scheme design, delivery and monitoring. The government should appoint an independent advisory board to develop and oversee this plan – the board should comprise independent experts who understand the sector, but who are not directly employed within it to avoid any commercial or vested interest.”
