Councils should take charge of ECO funding

Think tanks says funding for energy efficiency improvements should be taken out of the hands of utilities

An influential think tank has said that councils and other local groups, rather than utilities, should distribute energy efficiency funding.

The left of centre Institute for Public Policy and Research (IPPR) North has called for a revamp of the ECO (Energy Company Obligation) scheme under which larger energy companies are obliged to provide energy efficiency measures, like double glazing and insulation, for low-income and vulnerable households.

The IPPR North said that take up of ECO has been lower than predicted because suppliers lack incentives to cut their customers’ energy use.

The think tank has recommended that the funding should instead be handed to councils and other local groups, such as co-operatives and local companies, which could commission the improvement work.

Channelling the funding through grassroots groups rather than energy companies would also keep more money in the local economy.

In addition, IPPR North said, groups with stronger local links would be more effective at signing people up.

The proposal is one of a number to be outlined in a northern energy strategy, due to be published by IPPR North next month.

The think tank said that increased deployment of energy efficiency measure would more effectively curb fuel bills than Ofgem’s proposed price cap for vulnerable customers.

Ed Cox, director of IPPR North, said: “Putting energy companies in charge of cutting bills is like putting the fox in charge of the henhouse.

“They have a vested interest in keeping bills high, unlike energy operators who actually supply homes with power and maintain our creaking infrastructure.

“A big problem with the Green Deal was that it handed too much power to the big energy companies, and it is little surprise that they have remained ineffective compared with more locally organised schemes.

“One of the very best ways to cut energy bills is by reducing energy use, and councils, working with cooperatives, can use their local know-how to get people signed-up to schemes and get local companies fitting insulation and new windows.

“As the Prime Minister looks to deliver her commitment to reducing bills, focusing on making our homes better at staying warm and smarter in their use of energy will best help keep bills down while cutting carbon.”