Breathtaking spending spree used to boost Government's Green Deal programme

Parliamentary watchdog to investigate claims £36m scheme has benefited only 2,100 houses 

Whitehall Editor

The Government’s troubled Green Deal programme is to be investigated by Parliament’s spending watchdog after ministers were accused of going on a “breathtaking spending spree” in an attempt to make it a success.

In the last 12 months alone the Department of Energy and Climate has ploughed more than £36 million into the scheme that incentivises homeowners to install energy-efficient improvements.

But the latest figures reveal that just 445 households signed up to the scheme in February – a significant fall on the month before.

Overall only 2,100 households have had energy-efficiency measures installed since the scheme was launched last May – equating to £17,000 in administration costs for every home retro-fitted. The minister responsible, Greg Barker, said before the scheme was launched he “would not be sleeping” if 10,000 Green Deal plans had not been signed by the end of 2013.  

The Green Deal offers loans to cover the upfront cost of installing measures such as insulation or new boilers that are then paid back through reduced energy bills – but it has spectacularly failed to catch on with the public.

Some blame the high rate of interest for loans while others accuse the Government of failing properly to  test demand for the scheme before spending millions rolling it out nationwide.

The Government’s own research shows only a tiny number of people who have had Green Deal assessments went on to sign up to energy-efficiency measures.

That has not, however, led to a slow-down in government spending to promote the scheme. In February alone the Government spent:

  • over £300,000 on “consumer demand, marketing and communications” for the Green Deal including £100,000 on a rebranding exercise;
  • £227,000 to a single consultancy company on Green Deal monitoring and evaluation;
  • £20,000 in fees to part-time staff brought in to help run the scheme on top of the civil servants who are working on the plan full-time.

Margaret Hodge, chairman of the House of Commons Public Accounts Committee, which scrutinises government spending, said it was an area that she intended to investigate.

“It is pathetic when you consider that the Coalition promised to be the greenest government ever yet is spending millions of pounds on a scheme that is not even performing at the margins,” she said. “Sadly the Green Deal is looking like it is extremely poor value for money.”

Caroline Flint, Labour’s shadow Energy and Climate Change Secretary, said the party would scrap the scheme entirely.

“Energy efficiency is one of the best ways to help people get their bills under control but the latest statistics show that the Green Deal has completely failed. At a time when public money is so tight there is no excuse for this kind of breathtaking spending spree.”

A spokesman for the DECC insisted that the Green Deal was a “long-term project” that would deliver results “over a long time frame”.

They suggested Ed Davey, the Energy Secretary, would be soon unveiling further incentives to encourage uptake including a rebate on stamp duty. They added that lessons had been learnt and would be applied to the scheme in the future.

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