The government’s green homes grant scheme underperformed badly and risks damaging future efforts to deliver net zero, the public accounts committee (PAC) said.
Hailed by the prime minister, Boris Johnson, as a key plank in his green industrial revolution, the grants only upgraded about 47,500 homes out of the 600,000 originally planned. They also delivered a small fraction of the expected jobs.
The grants were intended to support the public to make their homes more energy efficient and move away from fossil fuel heating by installing heat pumps and solar energy.
But the PAC said the scheme unveiled in 2020 by the Department for Business, Energy and Industrial Strategy (BEIS), was poorly designed and had a troubled implementation. The Guardian previously revealed the grants were administered by ICF, an American corporation based in Fairfax, Virginia. Renewable energy businesses said the administration of the grants was chaotic, inefficient, confused and created long delays for the public and those installing the systems.
MPs on the public accounts committee said more than £1,000 per home upgraded was spent on administration; a total of £50m or 16% of the total spend of £314m. This was a fraction of the £1.5bn budget promised to upgrade 600,000 homes. The scheme began operation in September 2020 and was scrapped abruptly in March this year after just six months operating.
Cutting carbon emissions from homes – which emit 20% of the UK’s CO2 – is seen as crucial if the country is to reach net zero by 2050.
Dame Meg Hillier, chair of the public accounts committee, said: “It cost the taxpayer £50m just to administer the pointlessly rushed through Green Homes Grant scheme, which delivered a small fraction of its objectives, either in environmental benefits or the promised new jobs.
“We heard it can take 48 months – four years – to train the specialists required to implement key parts of a scheme that was dreamed up to be rolled out in 12 weeks. It was never going to work at this time, in this way, and that should have been blindingly obvious to the department. That it was not is a serious worry, I am afraid there is no escaping the conclusion that this scheme was a slam dunk fail.”
The MPs said they were not convinced that BEIS had fully acknowledged the scale of its failures with this scheme. Hillier said it was vital to have a massive step-change in the way homes and public buildings are heated. “But the way this was devised and run was just a terrible waste of money and opportunity at a time when we can least afford it.”
The report said the failure of the scheme had damaged confidence in government efforts to improve energy efficiency in private domestic homes. The way government was tackling the issue of domestic heating was “fragmented, stop-go activity” which had hindered stable long-term progress towards its energy efficiency ambitions.
The government awarded the administration of the grants to ICF, who had promised to deliver it in six weeks – other companies said fully implementing such a system would take at least 15 weeks – but ICF was not challenged by the department to explain how it could deliver, the report found.
In the end, the department launched the complex scheme without an IT platform that had been fully developed and tested to run it. ICF struggled to implement the digital voucher application system, leading to greater amounts of manual processing being needed for applications, contributing to the delays in processing vouchers.
The report found the scheme promised to create jobs but its design and duration limited its impact on employment and its abrupt closure may have led to redundancies.