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A flagship green homes grant scheme resulted in administration costs of £1,000 for each household involved, the Whitehall spending watchdog has said.
The £1.5 billion scheme, launched in September 2020, offered vouchers worth up to £5,000, or £10,000 for those on low incomes, to pay for fitting measures to cut carbon in homes, such as insulation and low-carbon heating.
It was hoped the green homes grant would help 600,000 households save up to £600 on their bills, support 82,500 jobs over six months and cut climate pollution.
But it was rushed, helped thousands of fewer homes than predicted, and created less than 6,000 jobs, the National Audit Office (NAO) said.
It was intended as a six-month “green” pandemic recovery measure but was scrapped in March 2021 following problems with its delivery.
According to the NAO report, some £314 million of taxpayers’ money will have been spent on the scheme once all work is fully completed, of which £50.5 million is on programme management and administration – more than £1,000 per home upgraded.
Business Department analysis shows it will have benefited just an estimated 47,500 homes and supported only 5,600 jobs over 12 months.
The scheme originally had high levels of demand – with 169,012 voucher applications for 113,738 homes received by the end of March this year.
But more than 3,000 homeowners and installers complained about delays for vouchers and problems finding certified tradespeople, the NAO report said.
It added that the Treasury gave the Business Department an “overambitious” 12-week timeframe to set the scheme up – at the same time as it was supporting vaccine procurement and working on Brexit.
A lack of engagement with installers and the initiative’s short duration also meant it was hard for tradespeople to meet demand.
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Meanwhile, many of the carbon-saving initiatives offered, like heat pumps, required employers to take on and train specialist staff.
The watchdog said a two-year timeframe for the scheme would have allowed more time for employers to prepare the right staff – but this was rejected by the Treasury.
The NAO added that the government had failed to learn from previous attempts to deliver home energy efficiency schemes.
It said future green schemes should have clearer aims to help simplify the process for homeowners and installers.
Gareth Davies, head of the NAO, said: “The aim to achieve immediate economic stimulus through the green homes grant voucher scheme meant that it was rushed.
“As a result, its benefits for carbon reduction were significantly reduced and ultimately, it did not create the number of jobs government had hoped for.
“Decarbonising our homes is a key element of the government’s net zero strategy. It is vital that future schemes learn from this experience.”
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Labour’s Meg Hillier, chairwoman of the parliamentary Public Accounts Committee, said: “The green homes grant scheme was set up to fail, with an undeliverable timetable and overly complex design which took little account of supplier and homeowners’ needs
“Government cannot hope to achieve its net zero ambitions if it doesn’t learn the lessons from this botched scheme.”
Shadow business secretary Ed Miliband added: “The fact that the UK has some of worst insulated homes in Europe is shameful and hinders our efforts to tackle the climate crisis. Instead of delay after delay in action, ministers should learn the lessons from this failed, fragmented, outsourced scheme.”
A government spokesperson said: “As the NAO recognises, the Green Homes Grant voucher scheme was designed as a short-term economic stimulus and was delivered during an ongoing pandemic. Despite this, and challenges with delivery, 99.9% of applications have now been processed, meaning almost 80,000 upgrades to homes. Other parts of the Green Homes Grant are continuing to effectively transform the energy efficiency of local authority housing.”
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