Recommendations & Conclusions
11 items
2
Recommendation
Twenty-Seventh Report - Green Homes Gra…
Acknowledged
Despite clear warning signs, the Department proceeded with an unrealistic implementation timescale for the Green Homes Grant Voucher Scheme. The Department had twelve weeks to set up the Scheme from announcement to launch. It was confident this was possible based on previous schemes, and felt the pace was necessary due …
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Despite clear warning signs, the Department proceeded with an unrealistic implementation timescale for the Green Homes Grant Voucher Scheme. The Department had twelve weeks to set up the Scheme from announcement to launch. It was confident this was possible based on previous schemes, and felt the pace was necessary due to the need to boost jobs at a time of economic risk and to start installations before winter. However, this limited timeframe put immense constraints on design, consultation and procurement, at a time when the Department’s own delivery capacity in terms of personnel and skills was under strain as it responded to the impact of Covid-19, for example supporting vaccine procurement, the various business loan schemes, as well as its other building decarbonisation schemes. This Committee has previously highlighted that Government should be willing to halt schemes when they are not ready for implementation. However, here the Department 6 Green Homes Grant Voucher Scheme proceeded despite its own assessment, and that of the Infrastructure and Projects Authority, that the Scheme was high risk, and after its Projects and Investment Committee rejected the Scheme’s Full Business Case just prior to launch. The Accounting Officer’s decision to proceed was partly due to reasoning the Scheme would likely achieve value for money even if it did not spend its full budget. We question whether this justification was sufficient, given Managing Public Money principles require consideration of a programme’s feasibility, as well as its potential value for money. Recommendation: The Department should: • set out how it will improve its approach to testing and assuring the readiness of new programmes; and • where the Department is unable to take these actions, consider requesting a Ministerial Direction, bearing in mind its obligations under Managing Public Money to have regard for the feasibility of what is being proposed.
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Government response AI summary
The government states it agrees with the recommendation and will ensure clear metrics for reform programmes, publishing regular updates on their operational effectiveness, but it doesn't detail improvements to readiness testing or address the request to consider Ministerial Directions.
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HM Treasury
7
Conclusion
Twenty-Seventh Report - Green Homes Gra…
Acknowledged
These issues were further exacerbated by underperformance of the Scheme Administrator (ICF Consulting Services Ltd, a contractor appointed by the Department), creating delays in applications being processed and vouchers issued to homeowners, as well as in making payments to installers, leaving them without payment for completed work for significant periods …
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These issues were further exacerbated by underperformance of the Scheme Administrator (ICF Consulting Services Ltd, a contractor appointed by the Department), creating delays in applications being processed and vouchers issued to homeowners, as well as in making payments to installers, leaving them without payment for completed work for significant periods of time.16 The Department argued that this was the primary reason for the scheme’s poor performance, and that it had seen a lot of demand at the start of the scheme before these customer service issues arose.17 It also stated that some of the application complexity arose from the failure of the Scheme Administrator to implement a digital voucher application system, meaning that customers had to be asked for documentation for checks instead of these being automated.18
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Government response AI summary
The government recognises the impact of the shortened timescale and acknowledges that the scheme administrator's digital delivery complicated processes and contributed to a complex user experience. It states that scheme design elements were informed by previous learnings and focused on quality assurance.
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HM Treasury
10
Conclusion
Twenty-Seventh Report - Green Homes Gra…
Acknowledged
Industry associations stated that the short lead up time, and the Scheme’s six-month window was a challenge for many installers, providing a very short timeframe for them to identify the resources they needed to engage with the scheme, as well as for the installation of measures.26 The Department acknowledged that …
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Industry associations stated that the short lead up time, and the Scheme’s six-month window was a challenge for many installers, providing a very short timeframe for them to identify the resources they needed to engage with the scheme, as well as for the installation of measures.26 The Department acknowledged that delivering the intended £1.5 billion of funding was extremely ambitious, and that it could have driven greater job creation by broadening the constraints on measures, however, it wanted to ensure that the scheme was not poor value for money in delivering carbon impacts.27 It also argued that many of the primary measures were labour intensive and stimulating demand for them would also have an impact in supporting jobs, and that where specialist skills were needed firms could hire new staff to work alongside those who were more experienced.28
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Government response AI summary
The government recognises the impact of the shortened timescale and digital delivery on installer engagement, stating that policy implementation will be improved through robust public consultation and by sharing lessons learned for future schemes.
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HM Treasury
11
Conclusion
Twenty-Seventh Report - Green Homes Gra…
Acknowledged
Requiring PAS and MCS certification, alongside Trustmark registration, was intended to protect homeowners from poor quality workmanship and fraud.29 However, gaining these certifications requires investment and time, which many installers were unwilling to do for only a 6-month scheme.30 At the Scheme’s launch, there were 880 potential installers registered with …
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Requiring PAS and MCS certification, alongside Trustmark registration, was intended to protect homeowners from poor quality workmanship and fraud.29 However, gaining these certifications requires investment and time, which many installers were unwilling to do for only a 6-month scheme.30 At the Scheme’s launch, there were 880 potential installers registered with Trustmark, however, by November 2020 only 248 had registered to participate in the Scheme, eventually growing to 1,008 by August 2021.31 Many homeowners struggled to find installers who were willing to participate in the Scheme, and the Department acknowledged that in many areas there were not enough 20 Qq136, 138–142, 154–155, Note dated 1 October 2021 from Department for Business Energy and Industrial Strategy section 2–4 21 Qq 91, 99 22 Q103 23 Qq 39–40 24 C&AG’s report, paras 10–11 25 Q35 26 The Mineral Wool Insulation Manufacturers Association, page 2, MCS Certified and MCS Foundation, page 4–5 27 Qq 40, 42, 64 28 Qq 35, 41 29 Q60, 63 30 Q85 31 C&AG’s Report, paras 8, 2.11 12 Green Homes Grant Voucher Scheme installers.32 Despite the challenges, some businesses did invest in order to participate; a survey by the Insulation Assurance Authority found that those who did invest spent an average of £87,000 getting set up for the scheme by gaining the necessary certifications, hiring staff, and promoting the scheme.33 Subsequent issues with the administration of the Scheme, however, such as the delays in issuing vouchers and making payments, meant that rather than expanding some firms reported having to lay off workers.34
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Government response AI summary
The government acknowledges the impact of shortened timescales and complex digital delivery on installer engagement. It reaffirms commitment to high quality standards based on the EHC review and states that lessons learned from the scheme will inform future policy development and implementation, including robust public …
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HM Treasury
12
Conclusion
Twenty-Seventh Report - Green Homes Gra…
Acknowledged
Whilst the Department extended the scheme’s duration by 12 months in November 2020, it later let these businesses down when on 27 March 2021 it suddenly announced the Scheme would close at the end of 31 March 2021.35 This abrupt cancellation itself had negative impacts on the companies who invested …
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Whilst the Department extended the scheme’s duration by 12 months in November 2020, it later let these businesses down when on 27 March 2021 it suddenly announced the Scheme would close at the end of 31 March 2021.35 This abrupt cancellation itself had negative impacts on the companies who invested in the scheme. For instance, the Federation of Master Builders reported loss of time and money, redundancies of staff hired to meet demand from the scheme, and reputational damage through being unable to service all their customers in the limited time available. It also stated that maintaining PAS certification requires continuous work, and thus the closure of the Scheme risked the loss of capacity in the industry.36
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Government response AI summary
The government recognises the negative impact of the shortened timescale and abrupt scheme closure on stakeholders, stating that policy implementation can be improved through robust public consultation and by sharing lessons learned for future schemes.
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HM Treasury
13
Conclusion
Twenty-Seventh Report - Green Homes Gra…
Acknowledged
The Department acknowledged that the impact on many installers was less than ideal, however, it stated that the alternative was to continue running an unacceptable standard of service.37 It also argued that installers would be able to access the other building decarbonisation schemes it had launched in July 2020, such …
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The Department acknowledged that the impact on many installers was less than ideal, however, it stated that the alternative was to continue running an unacceptable standard of service.37 It also argued that installers would be able to access the other building decarbonisation schemes it had launched in July 2020, such as the Local Authority Delivery element of the Green Homes Grant scheme and the Social Housing Decarbonisation Fund Demonstrator, which were delivered through local authorities as an intermediary.38 This contradicted evidence from industry, who stated that local authorities had tended to deal with just larger suppliers, and SMEs were either unable to engage with the schemes or would at least struggle to engage quickly.39
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Government response AI summary
The government acknowledges the impact of shortened timescales and states that policy implementation will be improved through robust public consultation and sharing lessons learned for future schemes, but does not directly address the contradiction regarding the viability of alternative schemes for SMEs.
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HM Treasury
17
Conclusion
Twenty-Seventh Report - Green Homes Gra…
Acknowledged
In 2016 our predecessors on the Committee identified similar problems when they examined the Green Deal; in that case the former Department for Energy and Climate did not undertake enough work to understand consumer needs, and how to make it easier for them to apply. This resulted in an overly …
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In 2016 our predecessors on the Committee identified similar problems when they examined the Green Deal; in that case the former Department for Energy and Climate did not undertake enough work to understand consumer needs, and how to make it easier for them to apply. This resulted in an overly complex scheme with many process steps and excessive paperwork, resulting in extremely low demand; only 14,000 households took out a loan, leading to a cost to taxpayers of £17,000 for every loan arranged.47 Similarly, in 2018 the Renewable Heat Incentive saw poor uptake; the Department expected to install 513,000 new heating systems as part of the scheme, but at the time anticipated it would install only 111,000. This was also due to a lack of preparation by the Department to understand what consumers wanted and the potential barriers to participation.48 The Warm Front Scheme featured a lack of clarity over whether it was primarily aimed at energy efficiency or alleviating fuel poverty.49
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Government response AI summary
The government agrees with the committee's implied recommendation to learn from past scheme failures, stating it is 'implemented'. The response details processes for extracting and sharing lessons learned from the GHGv scheme through independent evaluation, internal briefings, cross-Whitehall cascades, and a new programme to transform …
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HM Treasury
20
Recommendation
Twenty-Seventh Report - Green Homes Gra…
Acknowledged
The Department’s previous energy efficiency schemes for private housing have operated in different ways, and for varying timescales, and this fragmented, stop-go activity has hindered long term stable progress towards Government’s energy efficiency ambitions. In evidence to us industry associations argued the case for a stable, long-term plan for decarbonising …
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The Department’s previous energy efficiency schemes for private housing have operated in different ways, and for varying timescales, and this fragmented, stop-go activity has hindered long term stable progress towards Government’s energy efficiency ambitions. In evidence to us industry associations argued the case for a stable, long-term plan for decarbonising the UK’s domestic buildings.57 In our evidence session on Achieving Net Zero the Department referred to its new Heat and Buildings Strategy, alongside the Net Zero Strategy, which sets out its plans, including spending intentions, and the longer- term regulatory path for the building retrofit sector.58 The strategy is intended to provide a stable long-term policy landscape for consumers and industry to engage with.59 53 Q105 54 Q164–167 55 Qq 29, 52, 158 56 Environmental Audit Committee, Oral Evidence: Mapping the Path to Net Zero, HC 497, 22 September 2021, Qq 170, 189 57 MCS Certified and MCS Foundation, page 8–9, Federation of Master Builders, page 3–5, Mineral Wool Insulation Manufacturers Association, page 2–4 58 Committee of Public Accounts, Oral Evidence: Achieving Net Zero: Follow Up, HC 642, 25 October 2021, Qq 53, 55 59 Qq 74, 77, 93, 127 Green Homes Grant Voucher Scheme 15 2 Scheme Implementation Unrealistic implementation timescales
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Government response AI summary
The government agrees with the recommendation for a stable long-term plan, stating it is 'implemented' by the Heat and Buildings Strategy. The response outlines a commitment to applying lessons learned from the GHGv scheme through an independent evaluation, internal briefings, cross-Whitehall cascades, and a new …
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HM Treasury
21
Conclusion
Twenty-Seventh Report - Green Homes Gra…
Acknowledged
The Chancellor announced the Green Homes Grant Voucher Scheme (the Scheme) on the 8 July 2020, with the expectation that it would launch on 30 September 2020. This allowed just 12 weeks to get the scheme up and running. During this time, the Department had to consult with stakeholders, design …
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The Chancellor announced the Green Homes Grant Voucher Scheme (the Scheme) on the 8 July 2020, with the expectation that it would launch on 30 September 2020. This allowed just 12 weeks to get the scheme up and running. During this time, the Department had to consult with stakeholders, design the Scheme, and procure a scheme administrator to implement a digital system for voucher applications.60 This was at a time when the Department’s delivery capacity in terms of personnel and skills was already constrained in responding to the impact of Covid-19, for example with supporting vaccine procurement various business loan schemes, as well as its other building decarbonisation schemes.61
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Government response AI summary
The government recognises the impact of the shortened timescale and the scheme administrator's digital delivery complications. It commits to improving policy implementation through robust public consultation and sharing lessons learned from the GHGv scheme to inform future policy development.
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HM Treasury
22
Conclusion
Twenty-Seventh Report - Green Homes Gra…
Acknowledged
The Department told us that it had a high-risk appetite in getting the scheme up and running due to the ongoing effects of the pandemic, and the short 12-week timescale was necessary to boost jobs as 60% of the construction industry were on the furlough scheme which was due to …
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The Department told us that it had a high-risk appetite in getting the scheme up and running due to the ongoing effects of the pandemic, and the short 12-week timescale was necessary to boost jobs as 60% of the construction industry were on the furlough scheme which was due to end. It argued that if it had pushed the launch back to November or December then the Scheme would have started in winter, when it is less practical to install energy efficiency measures.62 Despite the short timescales, the Department was confident that it was still possible to implement the Scheme due to its experience of setting up other energy efficiency schemes with similar timescales, such as the Green Deal Home Improvement Fund.63
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Government response AI summary
The government acknowledges the negative impact of the shortened timescale for the scheme and states it aims to improve policy implementation through robust public consultation and by sharing lessons learned for future schemes.
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HM Treasury
23
Conclusion
Twenty-Seventh Report - Green Homes Gra…
Acknowledged
This rushed timescale meant that the Department undertook limited stakeholder engagement and restricted its options for procuring an administrator.64 The Department also did not pilot the scheme to test its feasibility.65 These issues led to many of the problems described in Part One including the lack of understanding installer needs, …
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This rushed timescale meant that the Department undertook limited stakeholder engagement and restricted its options for procuring an administrator.64 The Department also did not pilot the scheme to test its feasibility.65 These issues led to many of the problems described in Part One including the lack of understanding installer needs, the complexity of the scheme and the performance of the administrator. The Department pressed on with its unrealistic timetable despite warning signs during implementation.66 Both the Department’s own assessment, and that of the Infrastructure and Projects Authority, showed that the Scheme was high risk.67 In addition, the Department’s Projects and Investment Committee rejected the Scheme’s Full Business Case two days prior to the Scheme launch date as it did not believe the full £1.5 billion would be spent and was not able to confirm the scheme administrator’s IT solution would function, as it had yet to be fully developed and tested.68
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Government response AI summary
The government recognises the negative impact of the rushed timescale and limited stakeholder engagement on the scheme's delivery, stating that policy implementation will improve through robust public consultations and sharing lessons learned for future schemes.
Read full response →
HM Treasury