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UK Government guts Green Homes Grant funding by £1.5 billion

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The UK Government’s flagship Green Homes Grant scheme will likely lose around £1.5 billion in funding, despite the scheme being extended until 2022. 

When it was first announced, the Green Homes Grant was lauded as a key part of the green revolution that promised to supercharge the UK’s economic recovery from the Covid-19 pandemic. Initially, the Government said that it would fund everything from LED lighting to new doors and windows, although the scheme was significantly changed between what was briefed and what was subsequently launched

Well, it turns out that what was subsequently launched hasn’t been all that popular with consumers. In fact, according to Anne-Marie Trevelyan, the minister of state for business, energy and industrial strategy (BEIS), just 17,618 vouchers had been issued as of January 26, 2021. 

Those vouchers are worth just £73.1 million, meaning the UK Government isn’t anywhere near to spending the £2 billion it had set aside for the scheme. In fact, there’s still over £1.9 billion left in the budget to cover the scheme. 

How has the Government defunded the Green Homes Grant? 

So if there is over £1.9 billion left in the pot, how has the Government defunded the Green Homes Grant? Well, it’s quite simple actually. The scheme was initially due to run until April 2021, but will now actually end in April 2022. However, rather than simply rolling over the remaining cash, the UK Government has only earmarked £320 million for the extension, meaning around £1.5 billion will not be spent. 

The reduction in funding could significantly limit the scheme’s ability to make an impact on the environment, and certainly won’t deliver on the green revolution the Government promised. But it’s clear the scheme wasn’t working in the first place, and there’s been a paltry take-up by consumers, meaning it was unlikely to achieve those goals anyway. 

Trevelyan commented on the scheme, noting, “The original funding for the Green Homes Grant Voucher Scheme was announced as a short-term stimulus, for use in the 2020/21 financial year only.

“In the 2020 Spending Review, my Rt. Hon. Friend Mr Chancellor of the Exchequer announced £320 million of funding for the green homes grant voucher scheme for 2021/22, as part of funding allocated to make homes and buildings more energy efficient and less carbon intensive.”

What’s next for the Green Homes Grant? 

Well, it doesn’t look like the Green Homes Grant is going to last much longer. While, yes, it is being extended until April 2022, it won’t be a flagship policy of this Government and will likely do little to spark a green revolution. 

That’s certainly a shame considering the promise the scheme initially offered. A scheme targeting the energy inefficiencies of people’s homes could do a world of good for both the planet and the electrical industry that has been impacted severely from the Covid-19 pandemic. Unfortunately, the Green Homes Grant scheme was simply too complex and cumbersome for consumers. 

Couple the complexity of the Green Homes Grant with the UK Government’s downscaling of the scheme since its initial announcement, and you can see why this once promising scheme was doomed to failure. Plus, some firms took advantage of the incentive by jacking up prices, which certainly did the industry no favours. Still, we hope that there will be more schemes that will boost the green credentials of the UK, after all if we have any hope in hell of achieving net zero emissions by 2050, then it’ll require all households to do their part.

While the Green Homes Grant hasn’t been popular with consumers, that doesn’t mean consumers don’t want to make environmental upgrades. In fact, surveys suggest that the general public are increasingly interested in making home improvements that will increase their energy efficiency.

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