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Small firms fear Green Deal exclusion

Small contractors have urged the government to ensure they are not cut out of the market for work on its Green Deal.

The UK Green Building Council and the Federation of Master Builders said a handful of large companies must not be allowed to gain a stranglehold on the market for energy efficiency upgrades.

The Green Deal is the centrepiece of the Energy Bill, which was published last week.

Under the scheme, set to be launched in late 2012, households take out loans to make energy efficiency improvements and pay back the money through a charge on their energy bills.

Retailers, local authorities and builders merchants will be able to advise people on the best energy efficiency measures for their homes, arrange the deal and installation, and even carry out the work themselves.

More detail on how accreditation and financing will work is expected to be laid out in secondary legislation, which is due in the first half of 2012.

But construction bodies have warned ministers they must address potential pitfalls in the plans.

They fear high street retailers and councils, which can arrange the deals for householders, may subcontract the improvements to just a few big firms, leaving small companies in the cold.

A UKGBC spokesman said: “What is key for us is that small and medium-sized firms get a piece of the pie and there is competition in the marketplace.”

An FMB spokesman added: “Our main concern is opening up the market to SMEs to make sure work is not just done by Marks & Spencer subcontracting to larger contractors. Otherwise it will be a closed market.”

He suggested some smaller contractors might not want to arrange Green Deal loans for householders themselves.

He added that extra financial incentives might be needed to persuade householders and businesses to carry out the improvements.

These could include reducing VAT on green products or decreasing council tax on energy efficient homes.

The FMB said more expensive upgrades, such as solid wall insulation, could take a long time to pay back without extra help.

A spokeswoman for the Department of Energy and Climate Change said there should be a range of contractors carrying out Green Deal work.

She said: “The point of the Green Deal is that you could shop around. There would not just be one firm in an area doing this; there is choice for the consumer.”

DECC estimates that the number of people working in the insulation sector alone could rise from 27,000 to 100,000 by 2015, eventually rising to a peak of 250,000.

The Energy Bill includes an obligation for power companies to contribute towards the cost of upgrading the homes of people on low incomes or with hard-to-treat properties from 2012.

However, the National Housing Federation fears the obligation will not raise enough cash to help everyone on low incomes.

 

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