Peter Smith, head of policy research at National Energy Action, says we have the biggest policy gap on energy for more than three decades and that action is needed
On 14 April, the National Audit Office (NAO) reported that since 2013 there has been a dramatic 60% decline in the delivery of home energy efficiency.
The NAO’s value-for-money report into the Green Deal and the Energy Company Obligation (Eco) also rebuked the UK government for its handling of the announcement last year that there will be no further central funding for the Green Deal Finance Company (GDFC) or the Green Deal Home Improvement Fund. Launched with much fanfare by the coalition government in 2012, it was hoped the Green Deal would lead to the renovation of the UK’s housing stock with a hoped-for 14 million homes receiving energy efficiency improvements.
While many could have predicted that the policy would struggle to live up to the huge hype surrounding its launch, the dramatic subsequent decline in the delivery of home energy efficiency is unprecedented and has now left England facing one of the biggest voids in energy policy in recent memory.
The introduction of the Green Deal and the Eco marked a deliberate move away from providing grants to finance energy efficiency measures, even for the poorest households. Despite advice to the contrary and in contrast to the rest of the UK, this has left England as the only nation without a government-funded energy efficiency programme for the first time in more than 30 years. Following the loss of the Green Deal, there is now no non-levy-funded energy efficiency mechanism aimed at ‘able to pay’ households and while the Eco continues to provide some support, in future the policy will be the principal mechanism in England to enable low-income and vulnerable households to benefit from energy efficiency measures.
“England is without a government-funded energy efficiency programme for the first time in more than 30 years”
To add to these woes, the industry believes the Eco targets within the current phase of the scheme will be met well in advance of the scheme’s end-point in March 2017. The Comprehensive Spending Review in November 2015 also said the budget from 2017 would be slashed to circa £640 million a year, following a similar reduction in 2014 when Eco was reduced by a third from the original notional spend of circa £1.3 billion a year. So will the NAO report put an end to the recent antipathy towards initiatives that make homes greener, warmer and healthier? And how should policymakers respond?
NEA is a national charity working to increase investment in energy efficiency within vulnerable households. We continue to urge the government to join up the business case for enhanced action on energy efficiency across the UK.
The International Energy Agency’s (IEA) report Capturing the multiple benefits of energy efficiency demonstrated last year that energy efficiency programmes can prompt huge public health benefits. In the UK, there has also been an increasing recognition of the economic and fiscal impacts of making homes energy efficient.
Cambridge Econometrics and Verco, for example, noted last year that an ambitious UK-wide energy efficiency programme could return £3 to the economy per £1 invested by central government; help reduce imports of natural gas by 26%; save domestic consumers more than £8 billion a year; increase GDP by 0.6%; increase employment by up to 108,000 net jobs; and help reduce carbon dioxide emissions by a staggering 23.6MtCO2 a year.
NEA believes that achieving these macro outcomes is still a realistic prospect, but this depends on the government listening to key stakeholders’ feedback in the policy design phase and learning from successful national energy efficiency policies, which still operate in Wales and Scotland. If this happens in the coming years it will have a direct impact on vulnerable households and the pursuit of national fuel poverty targets. NEA therefore supports the Energy and Climate Change Select Committee’s recent call for the UK government to reinvest in warmer and more energy efficient homes.
In particular, it supports the Committee’s renewed calls for the National Infrastructure Commission (NIC) to investigate how creating warmer, healthier homes can encourage economic growth and the strong case for home energy efficiency to be regarded as a key national infrastructure priority.