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Green Deal 'cost the taxpayer £17,000 for every home improved'

The Green Deal has been slammed as “not value for money” by the National Audit Office (NAO), which also found that the government’s energy saving programme cost taxpayers £17,000 for each home that was improved.

Under the scheme, householders were encouraged to take out loans to pay for measures that would improve energy use and it was seen as a kick-start to encourage the take-up of heat pump technology. However, only 14,000 households took up the offer.

The Department of Energy & Climate Change (DECC) spent £240m on the programme, which ran between 2013 and July 2015. But it did not test it with consumers beforehand, according to the NAO, and the scheme saved “negligible” amounts of CO2.

The NAO report said the parallel Energy Company Obligation (ECO) programme also increased costs for energy suppliers, and so put up household bills.

“The DECC’s ambitious aim to encourage households to pay for measures looked good on paper, as it would have reduced the financial burden of improvements on all energy consumers,” said Amyas Morse, head of the NAO.

“But in practice, its Green Deal not only failed to deliver any meaningful benefit, it increased suppliers’ costs – and therefore energy bills – in meeting their obligations through the ECO scheme.”

The NAO said that the ECO scheme had, however, generated £6.2bn in notional savings on bills paid by some of the most vulnerable in society, measured over their lifetimes.

The DECC said it had stopped funding to the Green Deal Finance Company last July to protect taxpayers, and would now be designing a new scheme to replace the ECO programme, to run from 2017 to 2022. This will reduce the amount that households have to contribute by £30 a year.

A spokesperson also said it was now harder to make improvements in energy efficiency, as earlier schemes had tackled the lowest-hanging fruit.

“As the NAO itself has said, government schemes will deliver over £6 billion of energy bill savings to the most vulnerable and have already helped make more than one million British homes warmer,” said a DECC spokesperson.

The DECC has also set up an enquiry to examine the standards, consumer protection and enforcement of its energy efficiency schemes.

 

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