Government to look at ways to boost Green Deal

The government is to look at fresh ways to boost demand for the Green Deal, in what will be seen as a tacit admission that the flagship energy efficiency scheme is struggling.

The move, revealed in a letter from energy minister Greg Barker, seen by Building, comes a week after the first official Green Deal figures showed just four Green Deal finance plans had been signed nearly five months after the scheme launched (see graphic below).

It also comes in the week the government launched its industrial strategy for construction, which identified sustainability as one of five key areas for reform in the industry, and included a stretching target of reducing green house gas emissions from the built environment by 50% by 2025.

In Barker’s letter to industry figures, which is dated 2 July 2013, he said he was working with the Green Deal Oversight and Regulation Body “to establish a new Green Deal Provider Forum”.

He said: “This forum will look at ways the government can better work with those in the industry to increase demand, remove barriers and ensure that all parties can work together to shape the future direction of policy.

“We will be announcing more details on this new group and how it will engage with ministers in the coming weeks.”

Barker said he had had “positive discussions with a senior industry figure who has offered to play a strategic role in leading the group”.

The letter was in response to a letter from the UK Green Building Council (UKGBC), signed by a host of industry figures (see list below), including Barratt chief executive Mark Clare, Willmott Dixon Capital Works chief executive John Frankiewicz, as well UKGBC chief executive Paul King.

In that letter the industry leaders demanded “urgent action” to boost take-up of the Green Deal, including greater incentives for people to take-up the scheme as well as a cut in the interest rate offered on the Green Deal finance packages.

Boosting the Green Deal is a key part of Building’s Green for Growth campaign.

However, in his response, Barker ruled out the possibility of further incentives or a cut to Green Deal interest rates.

He said: “We are operating against a backdrop of budget cuts across government, hence further government subsidies to interest rates or otherwise are unlikely to be possible in the short-term.

“With the pressure to close the deficit, and a desire to reduce complexity, even revenue neutral mechanisms are difficult.

“Overall, with the Green Deal, our aim is to establish a self-sustaining market mechanism – that will grow to meet demand without the need for the heavy subsidies that previous initiatives were based upon.”

Questioned over industry concerns about the low take-up of the Green Deal at Building’s Government Construction Summit this week, business minister Michael Fallon cautioned that the scheme had “only just” begun.  

“This is something that is going to build very slowly and then accelerate. Green Deal providers are now coming on stream,” he said.