Energy efficiency underspend will not be rolled over

The government does not intend to roll forward hundreds of millions of pounds worth of underspent energy efficiency cash from its Green Homes Grant (GHG) scheme, it has emerged.

The Department for Business, Energy & Industrial Strategy (BEIS) announced last November that the £2 billion scheme had been extended beyond its original deadline of next month because of delays in issuing vouchers for energy efficiency works.

Labour backbench MP Catherine West asked recently appointed energy minister Anne-Marie Trevelyan whether any underspend in this year’s tranche of the programme to March 2021 will be rolled over to the next financial year.

In her reply, the minister pointed to a statement in November’s spending review that £320 million of funding has been allocated for the GHG voucher scheme in 2021/22.

Trevelyan added that the original funding for the scheme was announced as a “short-term stimulus, for use in the 2020/21 financial year only”.

The scheme looks set for a substantial underspend in the current financial year. Just 17,618 vouchers, worth a total of £73.1 million, had been issued by 26 January, according to Trevelyan’s reply to another written Parliamentary question last week.

The looming underspend has emerged amidst mounting concern about what environmental audit committee chairman Phillip Dunne described as the “snail’s pace” at which vouchers are being issued.

The committee calculated earlier this week that at the current rate, it would take a decade to reach the scheme’s target to issue 600,000 vouchers.

Ed Miliband, shadow business secretary, urged the government to roll over all of the money pledged for GHG vouchers:

He said: “This makes a mockery of the government’s commitments on climate change and a green recovery.

“It is outrageous that the government is withdrawing funding promised to help insulate people’s homes. They are denying homeowners the energy improvements they need, denying installers the work they need and denying the country the green transition we need.

“To top it all off, it is their own mismanagement of this programme that means only a fraction of this funding looks set to be spent.

“Ministers must make good on their funding promise and reverse this farcical decision by rolling all the underspend over.”

Under the GHG scheme, the typical owner occupier or landlord will be able to secure up to £5,000 in grants towards the cost of installing energy efficiency and or low carbon heating measures.

Poorer households, including those on benefits and universal credit, are eligible for up to £10,000.

Dr Jonathan Marshall, head of analysis at the Energy and Climate Intelligence Unit, said: “It is hard to square pulling funding with the huge public appetite for improving home efficiency.