Greed deal

There is insufficient protection in the Green Deal to ensure that assessors don't push unnecessarily expensive options on customers, says Cathy Finnegan.

Consumers have been left out in the cold when it comes to the Green Deal. The government’s current plans leave the door wide open for misselling and not enough of the Energy Company Obligation (Eco) is targeted at the fuel poor.
Citizens Advice is very concerned that mis­selling could turn out to be rife because there is too little protection for consumers under the government’s plans. As it stands, the Green Deal has the potential to be very lucrative for companies looking to make money by selling people products that are not necessarily the most suitable for them.
If a homeowner wants to take up the Green Deal for their property, they will need to be assessed to find out what improvements can be made and how to go about it. It is the job of the assessor to provide an impartial assessment and then give advice on a suitable package of measures. But many assessors are likely to be tied to Green Deal providers and will want to sell particular products or packages. This is problematic. It seems unrealistic to expect that assessors will be able to smoothly swap hats, switching from an impartial assessment to a sales pitch, without the incentive to sell affecting the assessment.
One of things we are most concerned about is the quality and consistency of assessments. There will be two parts to the assessment: one based on the fabric of the home itself, assuming standard energy consumption; and one based on the individual occupant. The Golden Rule (that the cost of the repayments will be no more than the amount saved as a result of the measures installed) will only be based on the former, but packages of measures may be tailored to take into account the latter. While this does theoretically provide protection for consumers – by making sure they understand how the package of measures might work for them – the danger is that the occupancy assessment could be open to abuse by assessors who are working to sell more expensive packages.
Monitoring what the assessor says in the person’s own home is difficult and we fear that assessors will be able to ask leading questions that will affect the customer’s decision and encourage them to agree to more expensive package of measures than is really suitable for their household.
Finally on misselling, there needs to be a common format and standards governing what is included in a Green Deal quote – for example, what remedial works need doing, preparation, making good and so on. There will be some minimum standards but these must be strengthened because customers may find it difficult to spot differences. We do not want providers cutting corners to ensure they have the cheapest quote, only for the customer to be hit with unexpected costs.
Let us turn now to Eco. It has two components: Affordable Warmth, which is targeted at individuals in fuel poverty (25 per cent); and a carbon saving element targeted at people in homes that need solid wall insulation (75 per cent).
There are 5.5 million homes in fuel poverty, yet the ambition of the Affordable Warmth element of Eco is low. The estimate given in the consultation document is that it will reduce the heating costs of 350-550,000 people by 2020, which means it will help only 7-10 per cent of people in fuel poverty. This prompts the question: how will fuel poverty for the remaining 90-93 per cent be solved?
If there are to be separate Affordable Warmth and carbon-saving elements of Eco, then there must be either a rebalancing of the funding so that a greater proportion – at least half – is spent on Affordable Warmth, or a prioritisation of the fuel-poor within the carbon-saving element.
Targeting people on an individual basis is expensive, and ensuring that the whole of the ­carbon-saving element of Eco is used for people in fuel poverty and in hard-to-treat homes, although desirable, will be difficult in practice. However, it would be possible to increase the proportion of the carbon-saving element used to help the fuel poor by using area-based targeting and focusing support for hard-to-treat homes on lower income areas.
Cathy Finnegan, social policy officer, Citizens Advice.

This article first appeared in Utility Week’s print edition of 27 January 2012.
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