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House of Commons agree: Green Deal was a dud

A House of Commons Public Accounts Committee report has concluded that the Green Deal and the Energy Company Obligation government-sponsored energy efficiency schemes put public money at risk and must not be repeated.
The report highlighted failures with the way the schemes were both designed and managed.

The report says that the Department of Energy and Climate Change implemented the Green Deal in 2013 “without adequately testing the design of the scheme with consumers.”

It found that householders were not persuaded that energy efficiency measures were worth paying for through the Green Deal and take-up of loans was “abysmal”.

The Department’s forecast that the Green Deal Finance Company would provide loans worth more than £1.1 billion by the end of 2015 was “wildly optimistic” –the actual figure was £50 million.

The report concludes “The finance company has incurred large financial losses as a result of the low demand for green deal loans resulting in the Department writing off some £25 million of the amount it loaned to the company.

“While the complementary Energy Company Obligation scheme has led to energy efficiency improvements in over 1.4 million homes, the Department does not have the information it needs to measure progress against its objectives. In particular, it cannot tell what impact the schemes have had on reducing fuel poverty.”

Rich Twinn, Policy Advisor at the UK Green Building Council, says: “The Public Accounts Committee report makes clear that implementation of the Green Deal was woefully inadequate. The wildly optimistic forecasts about take up were never realistic, and this point was made strongly by many in the industry at the time.

“Most of all the Green Deal simply didn’t appeal to many of the householders it was trying to attract. The interest rate was unappealing and there was – and still is – a fundamental lack of demand for energy efficiency among homeowners which the scheme did not address. Calls for structural incentives such as stamp duty continually fell on deaf ears, and ultimately it was the taxpayer who lost out.”

About Fiona Russell-Horne

Fiona Russell-Horne
Group Managing Editor across the BMJ portfolio.

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