Green Homes Grant delays forcing installers to lay off staff

Energy efficiency installation companies claim they are being forced to lay off staff due to administrative delays bedevilling the issue of the Green Homes Grant vouchers intended to stimulate the sector.

The Environmental Audit Committee (EAC), which has been looking into the scheme as part of a wider probe into efforts to improve the energy efficiency of the UK’s building stock, has published written submissions from three installers.

Spencer Cohen, commercial manager of EcoSpray Foam System, wrote that prior to its launch the firm had never participated in a funded scheme.

However, because all of the company’s clients had wanted to take advantage of the vouchers, which are worth up to £5,000 for most households and £10,000 for those on low incomes, he said EcoSpray had “no choice” but to implement it.

Three and a half months after the launch last autumn, he said the company’s revenue has decreased by “at least” 40 per cent and its cashflow is negative for the first time in “years”.

In addition, Cohen claimed that EcoSprays’s administrative costs have increased four-fold due to having to hire staff to handle the additional paperwork.

Due to the “catastrophic” impact the delays have had on the company’s revenue and cashflow, he said EcoSpray is now looking at laying off 40 per cent of its workforce.

While the release of vouchers has increased, it is not yet at a “sustainable” level, Cohen added, calling for vouchers to be issued within 14 days of applications being lodged.

“This initiative is killing industry and unless addressed immediately, I cannot see how companies will survive. Unless we see a drastic improvement, we will have no choice but to walk away and initiate redundancies.”

In her submission to the committee, Ann Barradine of Insulated Homes wrote: “The installers who believed in this scheme, invested time, money and the belief this scheme would make a difference to our companies’ profitability and workflow, now find our companies on the brink of liquidation as a pure direct result of the atrocious lack of administration, organisation, coordination and information provided by BEIS and TrustMark.’

Charles Montlake, director of Use the Sun, wrote that his company is also “on the brink of extinction”, after having received no grants through the scheme by the middle of January.

The delays in issuing grants means that the energy efficiency market is “going to grind to a halt very, very soon”, he added: “In theory the purpose of the [Green Homes Grant scheme] was to promote air source heat pumps so that post Covid the industry is stronger and ready to meet the installation required to hit the 2050 targets. In practice, the [Green Homes Grant scheme] is destroying the market.

“At this rate by March 2022 (when the grant finishes) there will be a lot fewer companies installing and a lot fewer tradesmen and a serious shortage of equipment.”

Montlake wrote that many installers, who tend to be self-employed, are stopping energy efficiency work in order to focus on more reliable plumbing jobs.

He recommended that a new target should be set to process 90 per cent of applications within a month of their submission.

Commenting on the problems besetting the scheme, EAC chair Phillip Dunne MP said: “The tragedy is that the short-term nature of this scheme means, regrettably, that it is having precisely the opposite effect to what was intended, with firms of builders and installers informing my committee that it has led to them laying off staff.”

Responding to the concerns outlined in the correspondence, a spokesperson for the Department for Business, Energy and Industrial Strategy, said: “Over 21,000 Green Homes Grant vouchers have already been issued, helping us improve the energy efficiency of homes, and we continue to work with the scheme’s administrator to ensure voucher applications are processed as quickly as possible.

“To ensure the highest standards of service, ministers have asked the scheme administrator to pay money owed to installers and sort the processing of applications as a matter of urgency.”

BEIS has said that voucher applications may be subject to requests for additional information, as part of “robust” checks to prevent fraud and gaming, and that guidance for installers on the payment process is being revised to provide greater clarity.