Ministers have scrapped the Government's flagship Green Deal home energy efficiency programme as part of their austerity drive.
The announcement comes weeks after The Independent reported that the scheme was at risk of falling victim to the Government’s plans to significantly scale back the Department of Energy and Climate Change’s £3.3bn budget.
It leaves David Cameron’s vow to lead the “greenest Government ever” in tatters, a phrase he even used in a speech at the Royal Welsh Show today.
The home improvement plan was deemed a failure by Decc, who decided to pull the funding after only 10,000 installed the taxpayer-subsidised green technology in their homes.
The closure of the scheme will not affect existing plans or applications for the programme, which is delivered by the Green Deal Finance Company, but the Government has announced it will launch an investigation into alleged scams connected to the scheme.
The Green Deal was launched in 2013 and was hailed as a “revolution” in transforming Britain’s typically energy inefficient housing stock.
It was designed to encourage people to install efficiency measures in their homes by offering loans and allowing them to pay back the money in instalments on their energy bills.
Decc released figures showing there had been just 9,999 Green Deal loans approved by June 2015, with a further 5,597 pending or applied for. It said it was scrapping the scheme “in light of low take-up and concerns about industry standards".
It is the latest sign of Mr Cameron’s waning commitment to green energy. In a sign that the Green Deal was about to be scrapped, the Prime Minister decided not to appoint a minister directly responsible for the scheme, with its brief handed to Lord Bourne – the most junior minister in the department who divides his time with the Welsh Office and is unpaid.
Overall, DECC’s £3.3bn annual budget is expected to be one of the biggest casualties in percentage terms of George Osborne’s austerity drive. He has already yannounced that it would have to find £70m in this financial year and that figure is expected to rise significantly in the autumn Spending Review.
Labour said today's announcement was proof of the Government's "complete and utter failure" on energy efficiency.
“The Green Deal was billed by the Government as ‘the biggest home improvement programme since the Second World War’ but has been a flop from start to finish," Jonathan Reynolds, the shadow energy minister, said.
“Installing energy efficiency measures in the home is an important way of getting consumer bills down, but the Green Deal never represented value for money.
“This is the second major announcement in the two days that the House of Commons has been on recess and it is clear the Department is in complete disarray. With more than two million households in fuel poverty, the Government urgently needs to lay out what plans they have to replace the Green Deal.”
Green party MP Caroline Lucas accused the Government of failing to do enough to ensure the Green Deal succeeded. “David Cameron had the audacity to again call his government the ‘greenest ever’ today – at the very same time as he takes a wrecking ball to key climate and energy policies," she said.
“This week has seen crucial climate and energy policies in the firing line as the Government pursues its myopic and reckless austerity agenda.
“The fact is that the Green Deal never did enough to roll out the home energy efficiency schemes this country desperately needs. But the Government’s rhetoric – which suggests that cancelling the scheme is good for taxpayers – is deeply flawed.
"The Government should be putting home energy efficiency at the very top of its infrastructure priorities – not cutting away at the schemes already in place. We need an ambitious energy efficiency programme for lower bills, decent jobs and to stand any chance of meeting our climate targets."
However the Taxpayers' Alliance welcomed the move, describing the initial decision to launch the Green Deal as a "triumph of politics over policy".
Jonathan Isaby, chief executive of the TaxPayers' Alliance, said: "The scheme was poorly designed, and with such high interest rates it's hardly surprising that people weren't queueing up for loans. The Government is right to see sense and dump the scheme, and should concentrate on delivering energy policy based on long term sustainability, not short term gimmicks."