Withdrawal of Green Deal

money_handoverThe Government announced the effective end of the Green Deal Scheme on Thursday 23 July when it confirmed that that no further funding would be provided to the Green Deal Finance Company, which makes and administers the Green Deal loans, or to the Green Deal Home Improvement Fund (GDHIF), which provide additional subsidy to install specific energy saving measures.

The decision will not make any difference to anyone who already has a Green Deal loan or a GDHIF voucher.  The Government has confirmed that these will be honoured.  The Green Deal Finance Company expects to be able to process the applications it has already received for Green Deal loans, but will not accept any further applications, at least for the time being.  It is possible that it will seek private finance to enable it to continue to operate.

The Government says that it remains committed to improving the energy efficiency of 1 million homes during the course of this Parliament, but concluded that, in order to ensure the money spent was giving proper value to the taxpayer, it should call a pause on the current arrangements and look at how to ensure that the funding was provided in a more coherent way for the future.  Amber Rudd, the new Secretary of State for Energy and Climate Change, is conducting a wider review of energy policies and funding of energy efficiency improvements will form part of this.

The Green Deal was a good idea in theory, but that was never matched in practice.  Its implementation in the private rented sector was held up for more than a year when it was discovered late on that it was not compatible with the Consumer Credit Act.  By the time this was resolved, the Chancellor had changed the rules by restructuring the ECO subsidy.  The stop-start nature of the GDHIF funding further undermined confidence.

The NLA has had its own difficulties.  We worked closely with the Coalition Government to develop the Green Deal, and thought it had a real opportunity to succeed where other energy efficiency promotion schemes had failed, because it focused on the building rather than the occupier.  We developed a service to support landlords through the whole process, but the funding problems meant that we struggled to deliver what we intended and had to face the entirely reasonable frustration, anger and disappointment of members who applied in good faith and did not get what they thought they had paid for.

That being said, the re-launched NLA Property Services is helping a growing number of landlords improve their properties, so that their tenants are warmer and happier in their homes.  The expertise built up through the past three years means that we are aware of all the potential sources of funding and work with the landlord to put together the package that works best for them.  Our partners have already confirmed that they were drawing increasingly on sources of funding other than the Green Deal and GDHIF even before last week’s announcement.

Whatever our immediate frustrations over this decision, the Government now has an opportunity to construct a more certain and sustainable means of supporting landlords to improve the energy efficiency of their properties. But it will have to move quickly, as the deadline of April 2018 for the introduction of minimum energy efficiency standards in the PRS remains unchanged.  The exemption which will be granted to any property which cannot be brought up to an EPC E rating without upfront cost to the landlord also remains in place, and without the Green Deal or an alternative, the amount of funding available for that is very limited.

One thought on “Withdrawal of Green Deal

  1. Significant opportunity here for the NLA to campaign for interest free loans from local authorities ( or Public Works Loan Board rates ) for upgrading F,G and E rated properties. Sensible investment protects rental income and helps those in fuel poverty…a win-win position.

    Rather than rely on exemptions to reach E-rating, lets use this ‘regrouping-time’ to secure buy-in from Government to direct that Local Council’s enter a compact with landlords owning cold-hazard homes, securing these interest free loans.

    Craig Anderson
    CEO
    Warm Wales CIC , Integrated Energy Services Ltd

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