The government has decided to stop funding the Green Deal Finance Company (GDFC). The GDFC was set up to lend money to Green Deal providers.
At launch in 2013, it was hailed as “transformational” and the “biggest home improvement programme since the second world war” by ministers.
However, The Green Deal scheme which offered cash backs and incentives on efficiency measures such as double-glazing, insulation and boilers never quite took off as hoped, with just over 15,000 issued or in the progress of being issued. It also allowed tenants to initiate the scheme in a rented property without it costs the landlord or tenant because, theoretically the whole cost was added to future energy bills connected to the property.
The government it seems has no new scheme in place to succeed the green deal and all they have said about the future is that they will work with the building industry and consumer groups on energy efficiency policies.
The consumer organisation, Which?, has said that it agrees with the government stopping the green deal scheme as it was “currently throwing money at a deal that had not taken off”. The latest figures up to June 2015, showed there were 9,999 “live” Green Deal plans, where all measures had been installed in a home, and a further 5,597 in process.
Tens of thousands of vouchers have been issued under the Green Deal Home Improvement Fund, with payments worth £114 million paid out to finance 27,140 measures. A total of £171 million has been committed under the fund.
Buy others have criticised the move to scrap the scheme without having any replacement. The home insulation industry has said it will create huge uncertainty for firms while the government works out what the replacement policy should be put implemented, as there is no doubting the need for a scheme to finance improvements in home energy.
The insulation industry says the UK has some of the worst insulated houses Europe, and saving energy is by far the cheapest way of the UK cutting carbon emissions and bringing people out of fuel poverty.
The lettings industry has expressed disappointment at the government’s announcement that it is scrapping the Green Deal.
They say the scheme offered welcome cashbacks and incentives to landlords and owner occupiers for improvements such as boilers, insulation and other energy efficiency improvements. But the Department for Energy and Climate Change says it took the decision to protect taxpayers, citing low take-up and concerns about industry standards.
But David Cox, managing director of the Association of Residential Lettings Agents (ARLA) has said that the decision will mean that the deadlines outlined in legislation for private rented properties to meet minimum Energy Performance Certificate (EPC) ratings of an E may become impossible to implement.
“The Green Deal [says David Cox] allowed landlords to make their properties energy efficient at no upfront cost to themselves, and without the funding, how can these regulations be implemented? We are calling on the government to review these changes, as a matter of urgency”
Commenting on the Government announcement that there will be no further funding to the Green Deal Finance Company, Richard Lambert, Chief Executive Officer, National Landlords Association, said:
“The Green Deal was a good idea in theory, but that was never matched in practice.
“Whatever our immediate frustrations over this decision, the Government now has an opportunity to construct a more certain and sustainable means of supporting landlords to improve the energy efficiency of their properties. But it will have to move quickly, as the deadline of the introduction of minimum efficiently standards remains unchanged.”
The stop in funding will prevent any new loans from going forward, however existing deals and loans in progress will still be honoured.
All properties within the Private Rented Sector (PRS) must be up to at least an ‘E’ EPC rating by 1st April 2018 under the new legislation, but this date could come forward to 2016 so waiting is not an option. Energy efficiency improvements can also help landlords and tenants save on energy bills.
However, it is a concern that the Government has no current plans to replace Green Deal schemes, so basically landlords will be on their own resources as far as energy efficiency measures are concerned.
Department of Energy and Climate Change (DECC) blog: Changes to green home improvement policies
Green Deal Finance Company funding to end DECC – here
Scrapping Green Deal – What it Means for You
The Government has decided to Stop Funding the Green Deal Finance Company (GDFC) – http://t.co/jpdf34jcmg
— LandlordZONE® (@LandlordZONE) July 30, 2015