Councils in England have hit out at the “flawed” and “unrealistic” Green Homes Grant programme for local authorities months after the government was forced to scrap a similar scheme for homeowners.
Inside Housing has learned that local authorities which have received funding through the programme are struggling to deliver within the timescales imposed by government, with some blaming a “fundamental misunderstanding” among ministers on how to run such a programme.
Councils have also warned that the structure of the scheme has prevented social housing providers from benefiting from the retrofit funding, as the short funding cycles mean landlords did not have enough time to put their stock forward.
In July last year, chancellor Rishi Sunak launched the £2bn Green Homes Grant scheme in a bid to fund the retrofitting of more than 650,000 homes to make them more energy efficient. Of this, around £1.5bn would be allocated through a voucher system to homeowners directly, while a further £500m would be given to local authorities to carry out retrofits in low-income households.
At the time he said the work from the funding would support roughly 140,000 green jobs and was supposed to be spent by the end of March this year.
However, in March this year, the government was forced to scrap the voucher part of the Green Homes Grant scheme after spending less than 10% of its value. At the time MPs warned that this was largely because the programme was poorly designed and overly bureaucratic.
After taking the decision to scrap the voucher part of the scheme, the government instead allocated an additional £300m to the Local Authority Delivery side of the Green Homes Grant scheme, in a move that it said would “mean even more households across England are able to access these vital grants through their local authority”.
However, Inside Housing has learned that councils are struggling to spend the money they have been allocated via the scheme, which has been beset by much of the same issues as the voucher programme.
When bidding opened for the first phase of the Local Authority Delivery scheme in August last year, councils were given just one month to submit bids outlining how they planned to retrofit hundreds of low-income households in the space of six months.
The Department for Business, Energy and Industrial Strategy (BEIS) was then forced to reopen bidding for the scheme in October – in what became known as Phase 1b – after allocating less than 50% of the funding in the first round.
A source from BEIS said the original one-month deadline was implemented to ensure that the scheme could quickly support jobs and stimulate the economy as the country came out of the first lockdown. They added that the department listened to local authorities and extended the bidding timeline to six weeks for Phase 1b.
Councils delivering retrofits through Phase 1b of the scheme have until the end of September this year to complete works.
BEIS has already been forced to extend the deadline for Phase 1a until the end of June this year, however Tania Jennings, who is the Green Homes Grant project lead at Ealing Council, said she thinks the council will still struggle to meet this date.
She said that Ealing, which is leading a consortium of eight west London boroughs, was delayed by three months after BEIS asked it to submit a bid for more money via Phase 1b before deciding not to give the consortium any additional funding.
“I think the biggest delays have just been a fundamental misunderstanding at government level of how long procurement takes.
“It took months for us to get through all of the legal hurdles, to accept the grants, put out a compliant tender and get a managing agent in place,” Ms Jennings said.
“If you want to be able to expand the scope of projects, you’ve got to think about that from day one with the procurement. You can’t account for things like government coming back three weeks later and saying ‘oh not enough people bid, we want to give you more money’.”
She said she felt that BEIS was forced to “reverse engineer” the Green Homes Grant programme after the chancellor’s announcement last summer and said the short timescale meant the council was forced to “develop a start-up in about three weeks”.
Philip Glanville, mayor of Hackney and chair of London Councils’ Transport and Environment Committee, said “serious flaws” with the national scheme are “hampering progress”.
“While we welcome funding for this vital agenda, boroughs are frustrated by the unrealistic timescales and bureaucratic hurdles within the Local Authority Delivery scheme. Councils haven’t been given enough time to ensure successful delivery, especially in the context of COVID-19 lockdown restrictions,” he added.
Under the Local Authority Delivery scheme, councils are able to fund the delivery of energy efficiency measures, such as insulation, within any household with an annual income below £30,000, including social housing properties.
However, both Ms Jennings and Mr Glanville said social landlords have been hesitant to put their stock forward because of the short timescales.
BEIS refused to release information to Inside Housing via the Freedom of Information Act about how many homes are currently receiving measures via the local authority Green Homes Grant scheme.
However, it did release information about the ‘delivery confidence assessments’ submitted by councils to BEIS earlier this year.
In February just 18% of councils that received funding as part of Phase 1a rated the likelihood of them delivering their project within time as ‘green’, while 16% selected ‘amber-green’, 35% selected ‘amber’, 19% selected ‘amber-red’ and 12% selected ‘red’. Green denotes that the councils were confident.
A spokesperson for the Local Government Association said that while the grant funding had helped to boost energy efficiency in homes, councils do “face challenges with the competitive, short-term nature of funding, which required councils to have sufficient staffing and capacity to apply”.
They added: “Providing long-term funding would better enable councils to help achieve our national net zero ambitions, supported by giving councils the flexibility to set energy efficiency standards above the current building regulation standards.”
Ms Jennings said that Ealing Council is making a “transformative difference” to the lives of those it is reaching through the scheme and that she hopes the government will give it more time to carry out the Phase 1a work, which she thinks it can complete by July.
“If you kill a programme just as it’s finding its stride, what’s the point? What we need are three-year long programmes where you can get apprentices and tradesmen into those roles to learn new skills and build the market. You can’t train anybody to do anything efficiently in six months,” she said.
Councils have now been allocated additional funding as part of phase two of the Local Authority Delivery scheme, which will be delivered in a different way via BEIS’ five local energy hubs.
The deadline for phase two work is December this year, but Ms Jennings said there has already been “significant delays” with contracts and funding agreements. She said Ealing hopes to begin delivering under phase two next month.
BEIS said there have been no delays to phase two and that delivery is planned from June to December.
A spokesperson from the department said: “The Green Homes Grant Local Authority Delivery Scheme has already begun to help thousands of lower-income households in England, saving them hundreds of pounds each year on energy bills by making their homes more energy efficient. By the end of the scheme we expect around 50,000 low-income households to have their homes improved directly through the scheme.
“The UK has a strong track record in improving the energy performance of its homes, with 40% now above Energy Performance Certificate Band C, up from just 9% in 2008. We are committed to going further and faster, and are investing £9bn in improving the energy efficiency of our buildings, while creating hundreds of thousands of skilled green jobs.”
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