Chancellor preps one year energy efficiency spending blitz, featuring £1bn to improve public buildings and £2bn to fund vouchers to help households pay for upgrade work
Chancellor Rishi Sunak is set to announce a major new £3bn green investment plan in a bid to upgrade buildings across the UK, slash greenhouse has emissions, and create thousands of green jobs.
The Treasury confirmed last night that a number of green recovery programmes would feature in the Chancellor's economic update to Parliament on Wednesday, including over £1bn to support the decarbonisation of public buildings and social housing and a £40m Green Jobs Challenge Fund to support habitat restoration projects, which was trailed by Prime Minister Boris Johnson last week.
The government then confirmed this morning that the rest of the package, totalling £2bn, will fund a major new voucher scheme to help households towards the cost of energy efficiency upgrades. The £3bn of funding is set to last a year and is regarded as a "significant down payment" on the government's longer term energy efficiency plans.
Business Secretary Alok Sharma told BBC Breakfast that under the Green Homes Grant hundreds of thousands of homeowners will receive vouchers of up to £5,000 to cover at least to two thirds of the cost of energy-saving home improvements. He confirmed the scheme would cover double glazing, insulation, and other approved measures.
Moreover, poorer households could qualify for more generous grants worth up to £10,000 per household that would cover the full cost of any work.
The Treasury estimates the scheme could support over 100,000 jobs. It is scheduled to start as early as September with households able to secure quotes from approved suppliers before then applying for a voucher.
"What [the scheme] ultimately means is lower bills for households, hundreds of pounds off energy bills every year, it's supporting jobs and is very good news for the environment," Sharma said.
The proposals were broadly welcomed by green groups and political opponents, but there were also warnings that the government needed to go further to match the green recovery programmes being mobilised by other countries, such as Germany's recently announced €40bn climate-focused stimulus package.
The Treasury said the plans would support tens of thousands of green jobs and form a key part of the government's 'New Deal' plan to "power up the nation's workforce and protect the environment".
Alongside the voucher scheme, the government is also preparing to unveil a £50m pilot project to trial innovative approaches to retrofitting social housing at scale that would see measures such as heat pumps, insulation, and double glazing, so as to help landlords improve the least energy efficient social rented homes in England.
The project is designed to lower annual energy bills by an average of £200 for some of the UK's poorest households, while also slashing carbon emissions.
In addition, the Treasury confirmed the government will launch a new £40m Green Jobs Challenge, designed to support up to 5,000 new jobs by working with environmental charities and local authorities to deliver projects to improve England's "treasured landscapes".
The announcement received a cautious welcome from green groups, but also sparked a raft of questions over precisely how the remaining £2bn of the package would be spent and whether it would be followed by further announcements to help accelerate the UK's transition to net zero emissions.
The government previously committed to a £9.2bn building energy efficiency programme as part of its manifesto last year, including a £2.9bn Public Sector Decarbonisation Scheme and a £2.5bn Home Upgrade Grant programme to be delivered over five years, as well as a £3.8bn Social Housing Decarbonisation Fund to be delivered over 10 years.
Campaigners had been calling for these programmes to be brought forward to form the backbone of a green recovery package that would create thousands of jobs, drive economic growth, and cut emissions.
The Treasury was said to be supportive of the proposals, but reports had suggested the Prime Minister's senior advisor, Dominic Cummings, has been pushing to dilute the promised energy efficiency programme with government sources alleging that he regards insulation upgrades as "boring".
However, the new £3bn package is now set to be fast tracked over the next year. One campaigner said that if confirmed the updated plan would represent "a cracking start" to the government's energy efficiency efforts, but added that it needed to be followed by a longer term, decade long plan to upgrade the UK's housing stock. Another hailed the prospect of the government spending £3bn over one year represented a "massive win" that would provide a significant boost to the green construction sector.
Nick Molho, Executive Director of the Aldersgate Group of green businesses, said the £3bn package to support energy efficiency investments for 2020/2021 was "a good start". But he added that for it to deliver meaningful emission cuts, better buildings, and net job creation support needed to be provided "in the years ahead, in line with Conservative Party's manifesto commitments".
His comments were echoed by Ed Matthew, associate director for climate change at think tank E3G, who said the funding pledge was "a real breakthrough".
"It can kickstart a major retrofit programme to make UK homes and public buildings energy efficient, [and] it will create thousands of jobs, slash carbon emissions, and help tackle the scourge of fuel poverty," he said. "It is the cornerstone for a green economic recovery, and is sorely needed. The UK has among the least energy efficient buildings of any country in western Europe, with one of the worst records on fuel poverty, with 10,000 people dying a year from the health consequences of cold homes."
However, he also stressed that it was "vital that the government now builds on this stimulus by setting out a long-term investment programme to make all UK buildings energy efficient within a decade". And he warned that action was required to ensure the voucher scheme runs effectively. "This should include putting in place schemes to guarantee the work will be carried out by qualified builders to a high standard, with full protection for households to ensure any poor work carried out is immediately rectified for free," Matthew added. "The scheme should also be administered by a trusted independent organisation, as is the case with the Energy Saving Trust managing schemes in Scotland."
Labour's Shadow Business Secretary Ed Miliband also welcomed the new package, but criticised the failure to provide targeted support for private renters. "It appears there is almost nothing for the people who rent the 8.5 million homes in the social rented sector and private rented sector, which has the worst energy efficiency standards," he told the BBC. "That means one-third of people are left out."
Meanwhile, environmental groups remain concerned about the government's wider green recovery plans.
"Surely this is just a down payment?" said Greenpeace UK's head of green recovery Rosie Rogers of the new spending pledge. "The German government's pumping a whopping £36bn into climate-cutting, economy-boosting measures and France is throwing £13.5bn at tackling the climate emergency. £3bn isn't playing in the same league.
"Of course this money is better than nothing, but it doesn't measure up to the economic and environmental crises. It's not enough to create the hundreds of thousands of new green jobs that are needed. It's not enough to insulate all of the homes and buildings that need to be kept warm and more energy efficient. It's not enough to 'build back greener', and it's certainly not enough to put us on track to tackle the catastrophic impacts of the climate emergency."
Molho warned that beyond the welcome focus on energy efficiency the government also needed to be accompanied by "targeted public spending in areas such as electric vehicle charging infrastructure, energy networks, broadband and nature restoration projects". He also urged the government to publish "a comprehensive policy plan in the autumn to drive private sector investment towards the low carbon and environmentally resilient infrastructure needed to put the UK on track for its net zero and nature restoration targets".
Green MP Caroline Lucas said that if the government was committed to "building back greener" the £3bn package was "a start, but it needs to go a lot further and a lot faster".
"It's a very cautious toe-in-the-water towards a greener, more resilient economy when we need to be diving right in," she added. "Retrofitting our building stock is the right place to start. But at this rate, it will take half a century to properly insulate all our homes - which are overwhelmingly in private ownership so not covered by this initiative. There needs to be a much greater sense of urgency."
A Treasury spokesperson said the "government remains committed to decarbonising buildings to keep us on track to reach Net Zero emissions by 2050".
"The funding expected to be announced this week represents a significant and accelerated down payment on decarbonising buildings, to help stimulate the economic recovery and create green jobs," they added. "Allocations for future funding will be determined in due course."
Reports have suggested the government is considering plans to increase funding for new carbon capture, hydrogen, and green transport projects as part of its stimulus package, but new funding commitments are yet to be confirmed and campaigners fear big spending decisions could now be deferred until the autumn.
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