politics sustainability

How and why the Green Homes Grant failed

Earlier this year I wrote about my experiences with the Green Homes Grant, a government scheme to improve household energy efficiency. It worked for us in the end and we got our underfloor insulation done, but it was clear the scheme was stuttering. In February it was closed. After a decade of ignoring one of the most obvious climate solutions – home energy efficiency – the government’s flagship project to address it failed within weeks of opening.

It’s a fairly comprehensive failure, when you compare the initial aims and the eventual outcomes:

AimDelivered
Create 82,500 jobs5,600
Assist 600,000 households47,500
Spend £1.5 billion£314 million

Now we know why.

The National Audit Office is an independent body that scrutinises public spending. They’ve had a good long look at the Green Homes Grant, and their report is out today. The stinging summary is that “The Green Homes Grant Voucher Scheme was delivered to an over-ambitious timetable and was not executed to an acceptable standard, significantly limiting its impact on job creation and carbon reduction.”

Since the UK is committed to net zero carbon emissions by 2050, and buildings account for 19% of emissions, we still need a green homes scheme of some kind. So in the interests of getting it right next time, and getting a functioning scheme up and running sooner rather than later, let’s look a little closer at where it went wrong.

The timetable is perhaps the most important bit here. The government had put a scheme like this one in the manifesto, so it was on their to-do list. However, it was clearly rushed up the agenda to form part of the COVID-19 stimulus spending. The Treasury tasked the Department for Business, Enterprise and Industrial Strategy (BEIS) with creating the scheme, and gave them just 12 weeks to do it.

That accelerated time frame meant no time to consult properly with industry, which came back to bite them later, when businesses couldn’t register to be part of it, and householders couldn’t find a certified installer. It was also too little time to set up the administration of the scheme. Not consulting properly with industry was an important reason why the Green Deal failed ten years ago, so this is a government that is not learning from past mistakes.

It’s also a government that isn’t listening. The administration of the scheme went out to tender, and every one of the bidding companies told BEIS that the schedule was impossible. Rather than review their plans, they opted to press ahead and green light a project they knew would fail. This doesn’t reflect well on ICF Consulting Services, who took the job with everybody knowing it couldn’t be delivered.

As expected, nothing was ready for the launch. There were long delays. The digital processing of applications wasn’t ready, so everything was done manually. Because of that, the cost of all the paperwork went through the roof. Of the £314 million spent, £50 million went on admin, over £1,000 per participating household.

My own little insulation job demonstrates the facepalm economics of the scheme: my job was priced at £2,400. The government paid for a third of that, and I paid the rest. In other words, it cost the government £1,000 to give me £800.

No wonder the National Audit Office wanted to look into it.

There’s more, and it gets technical. You can read the whole report if you’re so inclined. The important things to learn are not particularly complicated.

  • First, don’t rush a good policy so that you can announce something. Do it properly and don’t sacrifice delivery for short-term political gain.
  • Second, talk to people. Consult. Don’t leave the industry that will actually do the work in the dark.
  • And third, listen. Take on feedback. Have a little humility. Learn from past mistakes, and if somebody says something is impossible, maybe take that on board next time?

These don’t sound like outrageous learning points. They’re more a matter of basic competence. So let’s try again, shall we? Those emissions won’t cut themselves.

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