The business and energy secretary has insisted the government is working on fresh plans to decarbonise the UK’s building stock following last month’s decision to pull the plug on the Green Homes Grant voucher scheme.
Kwasi Kwarteng told the Business, Energy and Industrial Strategy (BEIS) Committee on Tuesday (13 April) that he “wasn’t happy with the outcomes” when he decided to close the scheme to the new applicants at the end of March, giving just four days’ notice.
“The best thing was to shut the scheme and come up with another plan,” he remarked.
The Green Homes Grant programme was launched in September as part of a £3 billion plan to upgrade the UK’s buildings that also included £1 billion for the Public Sector Decarbonisation Scheme.
Of the £2 billion assigned to the Green Homes Grant programme, £1.5 billion went towards the voucher scheme which offered most households grants of up to £5,000 to help pay for energy efficiency improvements and other green home upgrades such as the installation of solar panels. Poorer households were able to claim up to £10,000 to cover the full costs.
The remaining £500 million was allocated to the Local Authority Delivery scheme.
In March, the Department for Business, Energy and Industrial Strategy announced that the voucher scheme would close to new applicants at the end of the month, although an additional £300 million would be allocated to the Local Authority Delivery scheme and the Social Housing Decarbonisation Fund Demonstrator.
At the time, the government said it expected to issue vouchers worth £300 million by the time the application window closed. It had previously revealed that £320 million of funding would be rolled over to the next financial year whilst announcing a 12-month extension.
Explaining the decision to halt new applications, Kwarteng told the BEIS Committee that the administrator hired by the government to run the scheme – US consulting business ICF – had not processed them “quickly enough” and that take up by households had not been as great as anticipated.
“Once we were back into lockdown, the appetite of people to have people come into the house to do installations completely collapsed and demand went down, and I decided the best thing was to shut it and morph it into something else.”
Kwarteng said he hopes the delayed heat and building strategy will come out in the “next few weeks” and hinted that it would offer a longer-term approach than the Green Homes Grant programme, which was announced last summer as part of a post-pandemic emergency package to stimulate the economy.
“There was an issue with the short-term nature of the scheme, which was very ambitious and time limited. The industry wants a longer term and more strategic approach.”
He noted that the scheme had originally only been intended to run until March this year.
Kwarteng said the other elements of the government’s £3 billion plan to upgrade buildings had “worked well”.
He also said that the commitment to net zero was one of the factors, which lay behind the government’s recent decision to scrap its industrial strategy.
“Net zero is one of the big facts that have changed since 2017 and it’s not mentioned once. It’s not fair to say we have somehow ended the industrial strategy and begun something else. A lot of the substance of what we are doing is still the same.
“The industrial strategy did a really good job, but the world of 2017 no longer exists.”