Government slashes Green Homes Grant Voucher Funding due to low uptake

What is the Green Homes Grant?

The Green Homes Grant is a scheme (in voucher form) that is available to all homeowners and residential landlords in the UK and allows them to apply for a grant to improve the energy efficiency of their properties.

Hailed as a major part of the government’s drive towards Net-zero carbon emissions by 2050, the scheme would fund up to two-thirds of the cost of improvements such as the installation of new insulation or heat pumps.

The scheme was first launched in September 2020 with a six-month deadline imposed to get any work done, but as a result of the Covid-19 pandemic that deadline was pushed back until 31^st March 2022.

Despite the extension, the low uptake and slashing of the scheme’s budget this deadline could now be in doubt.

Also read: Energy Price Forecast 2021: Covid-19, Brexit and much more

Slashed Budget

Initially, the scheme was set to be funded by £2 billion with £1.5 billion to be earmarked for households and £500 million to be handed to local authority led schemes.

However, the Minister of State for Business, Energy and Industrial Strategy (BEIS) Anne-Marie Trevelyan said that the £2 billion will only be used in the 2020/21 financial and any leftover cash will not be rolled over.

Extremely low uptake

According to data released at the end of January, just 17,618 vouchers had been issued to households taking up just £73.1 million of the budget set aside for the scheme. This means that 95% of the £1.5 billion set aside is unspent.

With no plans to roll over the remaining funds that money will now be used for other things something that has resulted in a lot of criticism being aimed at the government. Only £320 million of funding has been set aside for the scheme in 2021/22. 

“The Green Homes Grant Voucher Scheme was designed to provide a short-term economic stimulus while tackling our contribution to climate change. However, the prevalence of Covid-19 since the scheme’s launch in September last year has led to an understandable reluctance on the part of the public to welcome tradespeople into their homes," A BEIS spokesperson said.

Great idea, poor execution

There’s no question that the Green Homes Grant has been a massive flop and whilst a good idea on paper the timing of its introduction could not have been worse.

With many households struggling to deal with the impacts of the government lockdowns caused by the pandemic the last thing on many people’s minds is going through the effort and stress of applying for a government grant.

“The principle of the Green Homes Grant should be commended... But unless overhauled and further extended, this scheme will fail to deliver its ambition. Issuing vouchers is continuing at snail’s pace, with only 20,000 of the 600,000 target issued four months in – at this rate it will take over 10 years to fulfil the Government’s expectation," said Philip Dunne MP.

The scheme has also been dogged by complaints over the length of time it takes for vouchers to be approved with some taking months to be issued.

If the government is to hit its target of 600,000 homes, it will take over a decade to achieve at the schemes current pace.

A shortage of accredited installers and an over-complicated application process were touted as the main causes of the poor uptake. Some ministers have called for a slashing of bureaucracy to speed up the process.

A Government spokesperson said: “Over 21,000 Green Homes Grant vouchers have already been issued, helping us improve the energy efficiency of homes, and we continue to work with the scheme’s administrator to ensure voucher applications are processed as quickly as possible. To ensure the highest standards of service, ministers have asked the scheme administrator to pay money owed to installers and sort the processing of applications as a matter of urgency.”

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