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NAO analyses Green Homes Grants scheme failings

Posted: 14 September, 2021. Written by Virginia Graham

The Green Homes Grants scheme (the Scheme) went live in September 2020, just 12 weeks after first being announced. Government had made £1.5 billion available to be allocated in just 6 months with the twin aims of creating up to 82,500 jobs in the sector and improving the energy efficiency of 600,000 homes.

Government first extended the proposed end-date for the Scheme by a year to 31 March 2022, but then closed the scheme to new applicants on 31 March 2021, the original end-date. In closing the scheme Governent cited operational difficulties leading to delays for home owners and installers. The element of the scheme supporting local authority housing continues.

National Audit Office (NAO) reviewed the scheme and has reported 17 key findings.

- The Scheme did not deliver the expected number of home energy efficiency installations or support the expected number of jobs.

- There was a high level of interest in the Scheme but many homeowners and installers had a poor experience of using the Scheme, including delays in issuing and paying vouchers and difficulties in finding certified installers.

- While the Scheme has faced difficulties, the Department (BEIS) has fully allocated its funding for the three other building decarbonisation schemes.

- The deadlines set by HM Treasury for BEIS to implement the Scheme constrained the time available for design, procurement and launch.

- BEIS did not fully reconcile the tension between creating jobs quickly, as part of a short-term economic stimulus package, and its aim of delivering a long-term carbon impact.

- BEIS did not sufficiently understand the challenges facing installers before the Scheme was announced, failing to learn from previous schemes.

- BEIS accepted that the Scheme posed a high delivery risk but felt urgency was required to stimulate the economy.

- BEIS's Accounting Officer approved the launch of the Scheme although BEIS’s Investment Committee had rejected the business case.

- The Department used a standard government contract to enable it to meet the Scheme’s timetable, but this limited BEIS’s commercial options, and the timescale limited its ability to fully develop the requirements of the contract.

- BEIS chose to proceed to its timetable even though no bidder thought it was possible to fully implement the required digital voucher application system by the Scheme’s launch.

- BEIS worked hard to improve the Scheme’s performance but ultimately chose to close it in March 2021.

Based on its findings NAO makes the following recommendations for BEIS:

a) set out by the end of 2021 how its various home energy efficiency schemes fit with its overall plans for decarbonisation, setting out timescales in a more detailed and longer-term plan. This will help to promote interest in future schemes from consumers and installers.

For future energy schemes BEIS should:

b) ensure the different policy objectives of a scheme are reconciled and translated into clear targets as part of the scheme design, with an agreed understanding of which objectives should be prioritised should trade-offs need to be made; and

c) engage with the installer market on the proposed design of any future scheme and base its planning on a realistic assessment of how long it will take the different segments of the market to mobilise the skills and capacity to meet demand across all parts of the country.

d) In designing a scheme, BEIS should:
    • test from the start what is being expected of householders and installers. The aim should be   to simplify processes, enabling all parties to complete stages right first time as far as possible; and
    • consider what risk appetite is appropriate to balance making the scheme accessible and efficient with managing the risk of poor quality workmanship and fraud.

e) take a staged approach to launch to ensure the processes and systems are working efficiently and effectively and can scale up.

f) ensure that BEIS deploys, alongside policy makers, people with technical, delivery and commercial experience to provide input at the earliest stages in the conception of new schemes.

You can see the full report here: