£240m Green Deal failed to deliver “meaningful benefit”
The Green Deal, formerly the government’s flagship energy efficiency scheme, did not achieve “value for money” because its design and implementation “did not persuade householders that energy efficiency measures are worth paying for,” claims the report, which also finds that just one per cent of households took out loans under the scheme during its lifetime.
The NAO, which released an accompanying report into the DECC’s loans to the Green Deal Finance Company, claims that the government department expects that it will not recover its £25m stakeholder loan to the finance company, along with the £6m of interest gained on it, with the paper citing a lack of consumer demand for Green Deal loans compared to initial predictions as a major factor in the finance company not being able to cover its operating costs.
The report also argues that the DECC’s design of its Energy Company Obligation (ECO) scheme, which aimed to support the Green Deal, added to energy suppliers’ costs of meeting their obligations, which reduced its value for money.
The NAO paper states that the lack of consistency in the government’s approach during energy saving schemes could increase the long-term costs of improving household energy efficiency, while also claiming that the initiatives have saved substantially less CO2 than previous supplier obligations due to the DECC’s initial focus on ‘harder-to-treat’ homes.
Amyas Morse, Head of the National Audit Office, believes that improving household energy efficiency is central to government achieving its aims of providing taxpayers with secure, affordable and sustainable energy.
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,” he said.
“But in practice, its Green Deal design 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 Department now needs to be more realistic about consumers’ and suppliers’ motivations when designing schemes in future to ensure it achieves its aims.”
Lisa Nandy, Shadow Energy Secretary, labelled the report “damning,” stating that the government is “short-changing” its customers.
“Investment in energy saving should be a national priority but these schemes are so badly designed they are ripping people off and failing to target those families who need help the most,” she said.
Responding to the report, a spokeswoman for the Department of Energy and Climate Change said: “The government is clear about the need to have firm financial controls in place to protect consumers, which is why we took action last July to address the issues in this report – stopping funding to the Green Deal Finance Company and setting up an independent review of the energy efficiency sector.
“We are now designing a new scheme that will help make even more homes warmer and bring people’s bills down.”
