National Audit Office Press Releases
Green Homes Grant Voucher Scheme
The Green Homes Grant Voucher Scheme was delivered to an over-ambitious timetable and was not executed to an acceptable standard, significantly limiting its impact on job creation and carbon reduction.
The Government has identified decarbonising home heating as a key part of its plan to deliver net zero by 2050.1 Between September 2020 and March 2021, as part of government’s ‘green recovery’ from the COVID-19 pandemic, the Department for Business, Energy & Industrial Strategy (the Department) ran the Green Homes Grant Voucher Scheme (the scheme). The scheme offered homeowners up to £5,000 funding, or £10,000 for low-income households, for the installation of energy efficient improvements.
The Department originally expected the scheme to support up to 82,500 jobs over six months, and enable up to 600,000 households to save up to £600 on their energy bills. The scheme did not deliver the expected number of energy efficiency home installations, or support the expected number of jobs. In total, the Department estimates that it will spend £314 million of the £1.5 billion funding available, of which £50.5 million (more than £1,000 per home upgraded) is on administration. It forecasts that the scheme will eventually support efficiency measures in 47,500 homes, and create up to 5,600 jobs over 12 months.
Many homeowners and installers had a poor experience using the scheme. There were delays issuing vouchers to homeowners and paying installers, causing frustration. Homeowners also found it challenging completing applications, and were often asked for more information, which took time. From October 2020 to April 2021, over 3,000 complaints were made to the Department and the scheme administrator.
HM Treasury gave the Department an over-ambitious 12-week timescale to design the scheme, consult with stakeholders and procure an administrator. This came at a time when the Department was supporting vaccine procurement, and undertaking activities related to EU Exit. The Department accepted that delivering the scheme within this timescale posed a high risk, but judged it was justified by the need to support businesses in the wake of the COVID-19 pandemic.
The Department did not sufficiently understand the challenges facing installers, failing to learn from its own previous energy schemes. Other energy schemes have shown the need for a robust evaluation of stakeholders’ views.2The Department only consulted with installers after the scheme was announced, which limited the opportunities to include installer views in the scheme design. The costs of installer accreditation and the short duration of the scheme when it was first announced (six months) deterred some installers from participating.
The Department did not fully manage the tension between maximising long-term reductions in carbon emissions, and creating jobs in the short-term.The scheme focused on measures that would provide the biggest impact on reducing carbon, such as insulation and low-carbon heat installations. These require specialist skills to install, which meant it took some time for employers to take-on and train staff. Jobs might have been created more quickly in areas that require less specialist skills, such as window and door installation. The initial plan for a two-year scheme would have allowed more time for jobs to be created, but this was rejected by HM Treasury.
The Department chose to proceed to its timetable, even though none of the firms that bid for the grant administration contract thought it was possible to fully implement the required digital voucher application system in the time available. By March 2021, the required system was still not in place, and much more manual processing was required for applications than expected, contributing to a growing backlog. The Department decided to close the scheme in March 2021, reasoning that insufficient improvement had been made, and that existing voucher applications would fully use the £320m provided by HM Treasury for the next financial year.
The NAO recommends the Department should engage properly with the supplier market for future decarbonisation schemes, and base its planning on a realistic assessment of how long it will take the market to mobilise. The requirements placed on homeowners and installers for such schemes should be tested from the start, with the aim of simplifying administration.
Gareth Davies, the head of the NAO said: “The aim to achieve immediate economic stimulus through the Green Homes Grant voucher scheme meant that it was rushed. As a result, its benefits for carbon reduction were significantly reduced and ultimately, it did not create the number of jobs government had hoped for.
“Decarbonising our homes is a key element of the government’s net zero strategy. It is vital that future schemes learn from this experience.”
Full report: Green Homes Grant Voucher Scheme
Notes for Editors
- In June 2019, the government passed legislation committing to achieve net zero by 2050.The NAO has reported on government’s environmental strategy in Achieving net-zero (December 2020) and Achieving government’s long-term environmental goals (November 2020).
- See the NAO’s report Green Deal and Energy Company Obligation (April 2016).
- Press notices and reports are available from the date of publication on the NAO website. Hard copies can be obtained by using the relevant links on our website.
About the NAO
The National Audit Office (NAO) scrutinises public spending for Parliament and is independent of government and the civil service. It helps Parliament hold government to account and it uses its insights to help people who manage and govern public bodies improve public services.
The Comptroller and Auditor General (C&AG), Gareth Davies, is an Officer of the House of Commons and leads the NAO. The NAO audits the financial accounts of departments and other public bodies. It also examines and report on the value for money of how public money has been spent.
In 2020, the NAO’s work led to a positive financial impact through reduced costs, improved service delivery, or other benefits to citizens, of £926 million.
NAO Press Office
+44 (0)20 7798 7400 or email firstname.lastname@example.org
Latest News from
National Audit Office Press Releases
Investigation into underpayment of State Pension22/10/2021 16:38:00
The Department for Work & Pensions (the Department) estimates that it underpaid 134,000 pensioners over £1 billion in State Pension.
Investigation into underpayment of State Pension22/09/2021 11:20:00
The Department for Work & Pensions (the Department) estimates that it underpaid 134,000 pensioners over £1 billion in State Pension. This was due to repeated human errors over many years, some level of which was almost inevitable given the complex rules and high degree of manual review necessary when assessing claims, according to the National Audit Office (NAO).
The Environmental Land Management scheme15/09/2021 11:05:00
Core elements of the Department for Environment, Food and Rural Affairs’ (Defra’s) new environmental grant schemes for farmers are not yet in place, increasing the risk to the initial roll out planned for 2022.
The challenges in implementing digital change21/07/2021 10:25:00
To deliver digital business change effectively, senior government decision makers need to better understand the business, technical and delivery risks associated with digital programmes, a new report by the National Audit Office (NAO) has found.
Local government and net zero in England19/07/2021 11:15:00
The recent (16 July 2021) report from the National Audit Office (NAO) finds that central government has not provided local authorities with clarity about their roles in achieving net zero by 2050, and its approach to funding their net zero work is piecemeal.
Department for Work and Pensions Accounts 2020-2116/07/2021 12:43:00
Fraud and error overpayments in the benefits system rose again in 2020-21 to the highest rate ever recorded.
Efficiency in government15/07/2021 16:15:00
As part of measures to manage spending following the COVID-19 pandemic, government plans to increase its efficiency.
Crossrail – a progress update09/07/2021 11:25:00
Today’s report from the National Audit Office (NAO) finds that the revised schedule and budget agreed for Crossrail in April 2019 was unachievable because the programme was further from being complete than Crossrail Ltd and the programme’s sponsors understood.
Investigation into the British Business Bank’s accreditation of Greensill Capital07/07/2021 11:20:00
A National Audit Office review finds that Greensill Capital (UK) Limited was accredited by the British Business Bank (the Bank) as a lender under the government’s COVID-19 business support schemes using a streamlined version of the Bank’s established accreditation process in response to the policy requirement to provide prompt access to finance for businesses.