Weekend press round-up: Green Homes Grant scheme axed

In our latest review of sector coverage across the national newspapers, there is criticism of the government’s handling of its flagship energy efficiency scheme, as it is scrapped with just four days’ notice. There is also continued coverage of the standoff between British Gas and the GMB union and of bill hikes prior to the energy price cap rise this week.

Green Homes Grant scheme to insulate houses axed

A much-promoted grants scheme to help householders in England insulate their home is to be scrapped within days.

The Green Homes Grant (GHG) reached just 10% of the 600,000 homes the chancellor promised would be improved.

The scheme will be stopped on Wednesday and the cash allocated to a separate insulation fund run by councils.

The £300m previously allocated for the GHG will now go into a programme administered by local authorities, targeted at lower income households.

Some 19 million homes in the UK need to be insulated or the emissions from gas boilers will wreck the UK’s chances of achieving its climate change targets.

But the GHG scheme, which launched in September in a bid to tackle that, has struggled from the start.

The government said many households were reluctant to apply for the grants – up to £10,000 – because they feared catching Covid from contractors coming into their homes.

However, in some parts of the country installers were actually overwhelmed with demand, and families could not even get firms to answer the phone.

Then checks on the way the money was spent were so stringent that some installers went out of business because payments were so badly delayed.

And despite the checks, some builders appear to have hugely overcharged for their work. One joiner told me he had witnessed an installer carry out work worth £3,000 at most, then deliver an invoice for £5,000.

It seems clear there is frustration in Whitehall at the American consultants brought in to manage the scheme for able-to-pay families.

The parallel insulation scheme administered by local authorities is running much more smoothly but ministers still need to create a new programme to nudge able-to-pay home owners into improving their insulation for the UK to hit its climate change targets.

There is no sign yet what that new programme might look like, or when it might happen.

A government source pointed out that the Conservatives promised in their manifesto to spend £9bn on insulation – and insisted that this cash would definitely be made available.

Campaigners, industry figures, and MPs said the current scheme was botched and called for the Chancellor Rishi Sunak to create an insulation programme stretching for decades, so that installers and suppliers have the chance to build up stocks and expertise.

Ed Matthew, from climate change think tank E3G said: “The end of the government’s flagship green homes scheme is a tragedy that was avoidable.

“There was plenty of demand for the grants but the scheme was plagued by incompetent administration. The reality is that we can’t get to net-zero without decarbonising our homes.”

He called for a new grant scheme to replace it – but said it was key to get the grants out quickly.

The demise of the GHG follows the previous failure of the government’s Green Deal which flopped because householders could get cheaper finance through their bank.

Matthew Pennycook, the shadow minister for climate change, said: “The funding announced today doesn’t even come close to plugging the investment gap created by the government’s decision to slash more than £1bn from its Green Homes Grant scheme and then scrap it altogether.

“Ministers might talk a good game on energy efficiency but their staggering ineptitude when it comes to decarbonising the country’s housing stock speaks for itself”.

Last month Utility Week analysed how things went so wrong for the Green Homes Grant

BBC News

‘A kick in the teeth’: British Gas engineers face losing their jobs or longer working hours

Hundreds of engineers could be dismissed from the country’s biggest energy supplier by the end of the week as a bitter nine-month battle in the UK’s latest “fire and rehire” debacle reaches its climax.

The standoff between British Gas executives and trade union representatives at GMB will come to a head on 1 April, when scores of the engineers responsible for servicing and repairing office and home boilers will be forced to accept longer working hours or lose their jobs entirely.

“For the last nine months it has been the first thing I think about when I wake up, and the last thing I think about when I go to sleep. The pressure we’re under is terrible,” says one veteran British Gas engineer. Chris, 51, has worked for the company since 1987 but asked not to be named in full because he may be forced to accept the new terms and remain at the company to support his family.

“Honestly, it’s made me ill. It’s made everybody ill. We just can’t understand how badly we’ve been treated – why?”

The tougher terms affect the entire 20,000 strong British Gas workforce, but its 7,500 service engineers – who carry out repairs for 3.6m customers who use British Gas for servicing their machines – fear they will take a disproportionate toll on their lives and livelihoods. British Gas claims that the percentage which have accepted the changes are in “the high 90s” – leaving up to 1,000 to face a stark choice in the days ahead.

“A kick in the teeth is probably the best way to put it,” says Ciara Arrowsmith, 37, who resigned from British Gas in protest last month after 13 years as a service and repair engineer in Sunderland. “I was always very loyal to the company, but I felt that what they were doing was immoral,” she says.

British Gas set out the fire and rehire plans last summer as part of a formal consultation process with trade unions. The company said it hoped to “streamline” its employment contracts, and increase productivity, to help rescue the business from the risk of financial ruin. Trade unions said the plan amounted to “bullying” by threatening to “set fire to jobs, terms and conditions”.

“It just became a really toxic atmosphere. I felt completely betrayed and it wasn’t good for my mental health. I had to go on to medication, but now I’m off,” says Arrowsmith. “It was just the uncertainty of what it was going to mean for the future because I’ve got two young children. There are loads of people with young kids, with carer responsibilities. This strike was not about money, it was about time.”

Under the new terms, full-time engineers would be required to work an extra three hours a week, 40 hours in total, and would not be paid a higher rate to work when required on weekends and public holidays.

“This is certainly not a position anyone wants to be in,” says Chris O’Shea, chief executive of Centrica, parent company of British Gas. “How did we get here? Our business has been declining for a number of years. We’ve lost a million customers in the last 10 years. Our productivity has declined substantially.”

“Our costs are between one-third and one-half higher than the person with a white van, and that is an unsustainable position,” says O’Shea. “Without change we would continue to decline. So I took the decision to engage with all four of our trade unions – Unite, Unison, Prospect and GMB – to discuss this and seek a negotiated settlement. And we managed to achieve one with all but the GMB. It’s deeply regrettable. But it’s about the long-term sustainability of our business,” he says.

“We’ve tried as hard as we can to be fair. The vast majority are with us. There’s still time for everyone to join us too. But everyone’s got their own choice, and I feel strongly that everyone has to make the right decision for them and their families,” O’Shea says.

Read Utility Week’s take on the Centrica strike here

The Guardian

Britain’s energy firms set to make £1billion from price hikes for loyal customers

Britain’s biggest energy firms are set for a £1billion windfall as they hike prices for hard-pressed loyal customers from Thursday.

Around ten million families on standard tariffs — many already with money struggles as a result of Covid — face bill rises of almost £100.

It comes after energy regulator Ofgem raised the price cap on standard variable tariffs.

They are the contracts that most people will be on if they have not switched supplier in the past year or so.

The change will increase the charges paid by a typical family on a standard variable tariff by £96, bringing the average bill up to £1,138 per year.

Added together, it makes a huge £1billion for power giants, analysis for Mr Money shows.

The Big Six energy firms have all said they are ­putting their prices up following the increase to the cap, which will affect millions of customers.

Of those companies, Eon, npower and British Gas have said they will put up prices by the maximum allowed, with SSE and EDF increasing prices to just £1 below it.

A number of other energy companies have also raised their prices to match — or very nearly match — the cap, including Shell Energy and Utility Warehouse, hitting a further 450,000 people.

Analysis by auto-switching site Look After My Bills shows that more than 12million customers will see increases to their bills on ­Thursday.

Simona Rutkauskaite, from Look After My Bills, said: “We added up all the increases — and it’s £1billion.

“With families across the country still suffering as a result of the Covid-19 pandemic, this could not be coming at a worse time.

“Yet again, the UK’s biggest energy firms are seeking to profit at the expense of customers who deserve better.

“The price cap was put in place to protect hard-pressed families. But energy companies continue to find ways to charge households over the odds for their household bills, treating the cap as a target to hit rather than the absolute maximum they should be charging households.

“The positive is that there are already many tariffs that are more competitive than the price cap. We would urge customers fearing these hikes to their bills to sign up to an auto-switching service that could save them around £262 a year.”

The Sun

UK pubs hit by higher energy costs as suppliers limit exposure

Energy suppliers are refusing to renew gas and electricity contracts for pubs or forcing publicans on to higher rates while they renegotiate terms, as they limit exposure to a sector still facing huge uncertainty after a year of on-off lockdowns.

About 30,000 pubs are facing contract renewal rejections or more expensive off-contract tariffs, the British Beer and Pub Association (BBPA) estimates.

Harry Webb-Jeffries, who took over the Valiant Sailor pub near Folkestone in Kent five days before the second national lockdown in November, said he had been refused contracts by every big supplier except Utilita and he was now paying £400 more a month for energy than the previous tenant.

Garry Tallent, landlord of the Red Lion in Chobham, Surrey, said he had been rejected by Eon after the German supplier said it was no longer taking on new hospitality businesses. He was accepted by Utilita but his rates increased and were barely covered by government coronavirus grants.

“After rent, utilities is our biggest bill,” Tallent said. “We’re just keeping going on a wing and a prayer.”

The BBPA said that it was lobbying Ofgem, the energy regulator, to investigate why suppliers were refusing renewals and to push them to agree long-term repayment plans.

Several energy suppliers, including British Gas, Eon and Utilita, admitted they had stopped accepting new customers from hard-hit sectors such as hospitality as they dealt with a surge in bad debts from existing customers. Many energy suppliers — even some of the largest companies — are lossmaking and operate on thin margins.

Suppliers also pointed out that utility bills were rising for households as well after a surge in wholesale electricity and gas prices in recent months.

Eon said it “had to make changes to how we operate in order to manage the higher risks we face in a market where margins are already wafer-thin”. It added that it had stopped accepting new customers in certain sectors because of the level of risk and “the cost of selling energy back to the wholesale market for customers not consuming when their businesses were shut”.

British Gas, which has more than 4,000 pub, bar and restaurant customers, said it had been “slowly relaxing restrictions for some of our products for new customers”. Its parent company, Centrica, said last month that losses at its business division widened to £140m last year from £20m in 2019 as it had to account for higher bad debts.

Utilita said it had quoted some renewals at a higher figure “due to a number of factors, including the rising price of energy” but insisted that more than half of its commercial customers “are renewing with us, with thousands staying on cheaper rates”.

Ofgem said energy suppliers offered contract terms “which take into account several factors, including risk of default”.

“We continue to encourage customers to explore the market for offers most suited for them,” the regulator added.

The Financial Times

Utility Week’s weekend press round-up is a curation of articles in the national newspapers relating to the energy and water sector. The views expressed are not those of Utility Week or Faversham House.