11 February 2021
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The news the government is likely to claw back funding assigned to the Green Homes Grant scheme is the biggest blow yet to the credibility of the Prime Minister's green recovery promises, and it does not bode well for the UK's wider net zero strategy
This may come as shock news, but I am not sure the Prime Minister is a details man.
Yesterday at Prime Minister's Questions in response to a question about the paltry level of take up for the Green Homes Grant scheme and a request for him to clarify whether the budget for the scheme has been cut, Boris Johnson declared that while there were some issues with the initiative "the problem with the Green Homes Grant is not that we are cutting it, the problem is there hasn't been enough take-up".
"We want to encourage people to take it up and make use of the opportunity to reduce the carbon emissions of their homes," he added.
All of which sounds very encouraging, until you try and unpick precisely what the Prime Minister was saying and how it relates to objective reality.
Let's take it one claim at a time. Despite the Prime Minister's claims, the problem with the Green Homes Grant is demonstrably not a lack of take-up - quite the opposite in fact. There has been huge demand for vouchers, as well as massive pent up demand from people who would like vouchers but have been put off by the complex application process and their struggles finding installers who can carry out the work.
Perhaps, Johnson was referring to a lack of take-up amongst installers. This has been more of a problem, but many within the industry believe it is one entirely of the government's own making. Limited communication with the businesses delivering the scheme, demanding (although arguably necessary) certification processes, a ridiculously short time frame for delivering upgrades ahead of the scheme's original deadline, and well documented problems with paying installers in a timely manner have all hampered take-up among installers - and who can blame them? Small businesses need a very good reason to take on staff in the midst of an economic crisis, but the scheme that was meant to help justify their investment was originally scheduled to end within a handful of months of its launch and the shambolic administration has now been shown to result in cash flow problems for many firms.
What about the PM's claim that 'the problem with the Green Homes Grant is not that we are cutting it"? How do you translate that little line?
Is it that the government is cutting the scheme, but that is not the problem with it? Or is it that the government is not cutting the scheme? And if that's the case is a failure to roll over a budget underspend a 'cut' in the Prime Minister's mind, or not? To be honest, your guess is as good as mine.
What we do know is that last week Energy Minister Anne-Marie Trevelyan appeared to confirm that the original £1.5bn budget for the scheme would only run for the 2020/21 financial year, meaning that from the end of March it will be replaced by a new budget of £320m. But to date only around £70m of the original budget has been spent. It looks as if well over a billion pounds of money allotted for reducing domestic emissions is about to disappear back into the Treasury's coffers. We've been asking for clarification on all of this from BEIS in recent days, thus far to no avail.
Is replacing a £1.5bn budget with a £320m budget "not a problem", as the Prime Minister implies. Well, it's not a problem if the current sluggish rate of voucher awards continues through next year. But if the stated aim of your scheme is to upgrade 600,000 homes, support tens of thousands of jobs, seed a national retrofit industry, slash emissions in line with the UK's net zero target, and drive a green recovery from the coronavirus crisis, then it is very much a problem.
Or should the Prime Minister's line be interpreted as confirmation the scheme will get the funding it needs? If so clarity is urgently required, because if installers are to invest in appointing and training new staff they need certainty over the scale of the pipeline of work they can expect to see beyond March.
All of this matters far beyond the confines of the latest Whitehall scrap or headlines about government incompetence. As former special advisor Guy Newey noted on Twitter last night, "no matter what policies you have in place, the next wave of UK decarbonisation is going to require people to do stuff. Switch to an EV, accept a heat pump, change your diet. Whatever it is, you are going to need consent. And that means getting serious about the retail politics of climate change".
He is entirely right. Big changes are coming and the public needs to take part. And yet even where the public wants to get involved and Ministers have agreed to literally give money away to stimulate the changes that are needed, the government can't get the details right. More broadly, an economic stimulus is urgently needed to ward off another lost decade and yet even when the Treasury seems to grasp this fact within a handful of months the deficit hawks have won out and the money is being clawed back.
The Green Homes Grant was launched at the same time as the Prime Minister was referencing Roosevelt and touting plans for a post-covid New Deal-style green recovery for the UK. But I don't recall the part of the New Deal where the state could not organise some lagging so gave up.
The one part of Johnson's response at PMQs yesterday that was clear was the claim "we want to encourage people to take up [the scheme] and make use of the opportunity to reduce the carbon emissions of their homes". But if that admirable goal is to be realised then the Prime Minister urgently needs to acquaint himself with the detail of how the scheme is going, have a word with the Treasury about the counterprductive nature of penny-pinching in the midst of an economic crisis, and instruct someone to get a grip on what is fast turning into an absolute shambles at the heart of the government's green recovery plan.
A version of this article originally appeared in the BusinessGreen Overnight Briefing newsletter, which is available to all BusinessGreen subscribers.
