Following the changes to the Energy Company Obligation announced in the autumn budget statement, there has been a marked negative impact on the installation of insulation and other energy efficiency measures up and down the country.
Arguably, some of the biggest losers have been residents of registered providers who were set to receive solid wall insulation through ECO-funded projects – the funders for which have now, largely, walked away.
Addressing the issue
The government has announced it’s addressing this situation with its successor to the Green Deal Cashback scheme - the Green Deal Home Improvement Fund.
The new scheme makes funding available for SWI and/or a bundle of at least two other measures. Funding will only be provided for measures recommended on an Energy Performance Certificate which is less than 24 months old or a Green Deal Advice Report.
“It should be noted that neither the existing Green Deal Cashback nor ECO can be used alongside the Green Deal Home Improvement Fund”
As an example, for SWI, 75 per cent of the installation cost (up to a maximum £6,000) is on offer - a £2,000 increase on the Green Deal Cashback figure.
While this increase is a step in the right direction, it should be noted that neither the existing Green Deal Cashback nor ECO can be used alongside GDHIF, and improvement works can only be undertaken through a registered Green Deal installer or provider.
So what does this mean for registered providers and their contractors?
As we all know, there are two sides to every story.
Registered providers will not be able to claim more than €200,000 (approx. £160,000) of GDHIF vouchers over three fiscal years (in accordance with the requirements of the EU State Aid De Minimis Regulation) and may not be able to claim at all if, across three years, they’re receiving over £160,000 in other state aid.
The Feed in Tariff, Renewable Heat Incentive and Social Housing Grant were all counted as state aid for Green Deal Cashback. As a result, while registerd providers will be able to get some help towards the funding of improvement programmes, there’s not going to be a lot of new work on the table for contractors.
On a more positive note, registerd providers are no longer required to go through a Green Deal provider.
This means that they will be able to deal direct with contractors who are PAS2030 certified and Green Deal approved – cutting out the middleman.
As such, contractors who can provide evidence of their status will be able to tender for work direct thorough a registerd provider’s own procurement systems, or via OJEU compliant frameworks such as those from Re:allies.
Does the Home Improvement Fund go far enough?
For registerd providers with no state aid concerns or ECO funding, and with relatively small programmes of energy efficiency measures, GDHIF could potentially be a welcome source of funding.
However, given the maximum amount of GDHIF available (£160,000) this may not be sufficient to kick start stalled SWI schemes, and in turn, bring in significant new revenue for contractors.
It’s worth remembering that previous asset management programmes such as Decent Homes have been delivered without significant additional funding.
Registerd providers were responsible for improving a number of key areas to prescribed levels within a given time-frame and within existing budgets.
To achieve this, providers had to thoroughly reassess and appraise their stock, reprioritising investment programmes where necessary in order to deliver these works.
Contractors, then, may find that while more ‘green’ work will come their way other improvement work may be curtailed.
David Kemp is sustainability manager at Re:allies. Re:allies is a collaboration between two housing consortia - Procure Plus and Efficiency North - that provide purchasing consortium facilities for social housing developments and registered providers across the UK