Utility Week

18 | APRIL 2021 | UTILITY WEEK Policy & Regulation Policy & Regulation Policy & Regulation 18 | APRIL 2021 | UTILITY WEEK Analysis Should the GHG be amended or abandoned? P rofessor Sir David King was a xture of the BBC's election night for more than 20 years. If the lugubrious Canadian hadn't died in 2017, surely the botched intro- duction of the Green Homes Grant (GHG) would have provided a fresh chapter for his tome, The Blunders of Our Governments, set- ting out how various government initiatives since the poll tax have crashed and burned. "Absolute shambles" is how one energy policy expert describes the scheme, which according to the most recent gures had delivered only a tiny fraction of the 600,000 home upgrades originally meant to have been installed by the end of March. What makes the botched implementa- tion of the GHG so painful for many in the industry is that it started out with such high hopes. A programme to tackle energy eŒ - ciency was the key ask of the industry as it presented its post-pandemic recovery wish- list last summer. There seemed to be no downside to investment in improved energy eŒ ciency, which promised to cut both emissions and bills, while tackling fuel poverty. The added bene t for a government confronting the spectre of escalating dole queues was that installing insulation and low-carbon heating devices would also create plenty of jobs. "It ticked every single box," says Simon Markall, Energy UK's head of public a• airs. Last July, chancellor Rishi Sunak unveiled the GHG as part of his Summer Jobs Plan, the centrepiece of which was the "Eat Out to Help Out" scheme. But the seeds of the GHG's woes were planted at this early stage when it was decided that the programme should be up and running by September and delivered in full by 31 March this year. Ambitious timetable It was understandable that the government wanted to see quick results, given the urgent need to stimulate the economy. As late as August, though, barely a month before the scheme was due to go live for application, industry sources were telling Utility Week they were still largely in the dark about how it would work. By the time the scheme's systems and pro- cesses were up and running in September, BEIS (the Department for Business, Energy and Industrial Strategy) had yet to estab- lished whether there were suŒ cient trades- people to carry out the work, says Markall. While not involved with setting up the scheme, ex-BEIS director of clean growth Tim Lord sums up the pressure the government at the time was under to deliver. "Damned if you don't and damned if you do," he says. But Caroline Bragg, head of policy at the Association for Decentralised Energy, says the initiative would have bene ted from bet- ter planning: "Putting processes in place is really important." The major problem once the scheme was up and running, says Solar Energy UK's senior external a• airs adviser Jack Dobson-Smith, was the contracting out of its administration to US-based company ICF. The outsourcing out t proved to be "over- zealous" in how it managed the scheme with many quotes rejected for either being "too high or too low". However, installers were leŸ in the dark about the speci c amount they should be targeting due to BEIS's desire to ensure a competitive bidding process, he says: "Appli- cations for funding are being arbitrarily refused with no clarity about why." Replying to a written question in parlia- ment earlier in February, energy minister Anne-Marie Trevelyan said applications must be thoroughly checked for compli- ance with the scheme rules to "help ensure value for money, consumer protection, and detect malpractice", meaning waiting times "can¡vary". It was important to ensure robust pro- cedures were in place to safeguard pub- lic money, says Lord: "We have to have a scheme that people can be con dent in, pro- viding appropriate protection against fraud and ensuring that the right kind of works are being carried out." According to the rst set of GHG statis- tics published in March, nearly half (46 per cent) of applications for vouchers had yet to be processed at the end of January due to requests for further information. Delays in issuing vouchers has put o• installers from getting involved in GHG- funded projects because they are wary about not getting paid, says Dobson-Smith: "Installers who have encountered problems won't take on new GHG scheme work until they can be sure they will be paid for it." He says the drop in applications for vouchers following the spike in October recorded in BEIS GHG statistics is due to cautious installers pulling back from the scheme. The result, says Lord, was that a "vicious rather than a virtuous circle" developed as reluctance to apply for the scheme grew. These delays were compounded as corona- virus infection increased during the autumn. Lord, who has recently leŸ government to become senior fellow, net zero, at the Tony Blair Institute for Global Change, says: "The problem is trying to provide that stimulus in the middle of a lockdown when people don't necessarily want to have work done inside their homes." Government spokespeople have blamed social distancing for the slower than antici- pated uptake of the scheme, although the risk of a fresh wave of the pandemic was pretty clear last summer when the GHG was being drawn up and tradespeople had been allowed to carry on working in homes. The government's explanation doesn't wash with industry sources. The Green Homes Grant was supposed to be the government's fl agship energy effi ciency scheme but take-up has been desultory and now installers are giving it the cold shoulder. David Blackman looks at how things have gone so disastrously wrong.

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