Green Homes Grant to be pulled this week

Construction firms have criticised the government’s decision to scrap the troubled Green Homes Grant energy efficiency improvements scheme later this week.

Business secretary Kwasi Kwarteng said the scheme, which spent just a fraction of the £1.5bn allocated to it in the first six months of its operation, would now close to new applications from 31 March.

The decision, which the Department for Business, Energy and Industrial Strategy said followed a “review”, comes just a week after MPs criticised the government for its mismanagement of the scheme.

Figures from the department show it is on course to have spent just £300m by the time of its closure. Implementation of the scheme was described as “disastrous” by MPs on the Environmental Audit Committee last week.

The government had already said that unspent cash would not be rolled over into next year.

Overall, the Green Homes Grant had £3bn allocated to it over two years, following its initial announcement last summer and the government’s decision to extend it in November.

The government said that it was instead making an extra £300m available to local authorities to undertake energy efficiency upgrades. It was not immediately clear if that was on top of the £562m pledged last week for the same purpose.

Brian Berry, chief executive of the Federation of Master Builders, said the “misguided” scrapping of the Green Homes Grant sent the wrong message to consumers and builders, and “will harm the UK’s desire to be seen as a global leader in tackling climate change”.

He said the government should instead have addressed the flaws in the scheme, branding it “another example of a stop-go green initiative that undermines, rather than creates, certainly for both the public and installers”.

Environmental groups had already described the grant scheme as woefully insufficient to address the scale of the challenge needed. The cost of improving the energy efficiency of the UK housing stock is estimated to run in to tens of billions of pounds.

Harriet Lamb, chief executive of climate solutions charity Ashden, said the stop-start history of the government’s commitment to providing grants for making homes more energy efficient was undermining confidence within the industry.

She added: “Companies that have taken on the retrofit challenge are scared of entering the market when the government has pulled the rug out from under their feet too many times. The government has created a self-fulfilling prophecy of failure.”