The Prime Minister is planning to divert more than £1bn from existing energy efficiency and clean heat programs to create a new scheme focused on insulating the homes of poorer households, according to reports.
The Times reported this morning that Boris Johnson has told Ministers to draw up plans to fund an expanded program to improve the energy efficiency of fuel poor households by slashing the budget of the £1bn Public Sector Decarbonisation Scheme, which focuses on making schools, hospitals, and other public buildings more energy efficient, and the £450m Boiler Upgrade Scheme, which launched last month and provides grants for households switching to heat pumps.
The plans have been widely slammed by environmental campaigners and opposition politicians, who have argued skimming funds from existing schemes was counterproductive, shortsighted, and amounted to ‘robbing Peter to pay Paul’.
Under the mooted plans, funds recouped from the Public Sector Decarbonisation Scheme and Boiler Upgrade Scheme would be reallocated to a new program potentially dubbed the ‘Great British Insulation Scheme’, which could also benefit from an enhanced Energy Company Obligation (ECO) levy on energy bills.
Campaigners were quick to slam the proposals to slash the budget of existing efficiency programmes, arguing that fresh long-term funding was needed to ensure millions of households were not plunged into fuel poverty this winter as a result of leaky homes and soaring energy prices.
Greenpeace UK oil and gas campaigner Georgia Whitaker said it was a “relief” the government had heeded widespread calls for an expanded nationwide energy efficiency programme. But she warned any plans to fund such a program with funds allocated to existing efficiency and heat pump programs made little sense.
“Diverting the cash from greening schools and hospitals, leaving and patients pupils to suffer from cold and draughty buildings, or from getting households off gas and onto clean heating, would be counterproductive,” she said. “There’s a simple way to raise this money and that’s to permanently raise the tax rate on the profits of fossil fuel giants that are making billions off the multiple crises the world is currently facing, not a levy that looks like more tax breaks than taxes.” “
Juliet Phillips, a campaigner at environmental think tank E3G, similarly warned that genuinely new funding was needed to support a major national insulation drive. “While E3G supports expanding ECO, this must be covered by new funding – not skimming money from other schemes,” she wrote on Twitter. “Schools & hospitals are facing sky high energy bills + desperately need energy saving measures. Robbing Peter to pay Paul is not the solution.”
And Darren Jones MP, chair of the Business, Energy and Industrial Strategy Committee of MPs wrote on Twitter: “It’s good the government has finally realised we need to insulate our homes, but taking the money from the heat pump voucher and public sector decarbonisation schemes is shortsighted. Just do it properly!”
Some in government have questioned the practicalities of funding the new scheme in part by extending the existing the government’s ECO scheme, the Times noted, with some officials noting that there was insufficient time to change the program ahead of this winter.
The scheme, which uses levies on energy bills to fund energy efficiency home improvements, has played a major role in driving efficiency improvements in homes since its launch in 2013, with government estimating it as reduced household gas demand by 20 per cent in 2.4 million homes .
But the government is yet to formally announce the launch of the next phase of the scheme, known as ECO 4, which is set to run between 2022 to 2026, despite the last iteration of the scheme running out at the end of March.
In an interview with BusinessGreen Last week, Energy Minister Lord Callanan insisted the scheme was underway, delays in putting its underlying legislation to parliament. “There’s a slight delay in the publication of the statutory instruments implemented but essentially ECO 4 is already being delivered,” he said.
However, there has been growing fears that the government’s refusal to formally announce the scheme is a sign that its budget is still in contention.
The Times reported the proposed ‘Great British Insulation Scheme’ would be focused on improving insulation in poorer households hardest hit by rising fuel bills, but noted it might be expanded to support middle-income households if people were willing to make a contribution.
One official reportedly suggested calling the scheme “Insulate Britain”, but the proposal was rejected when someone pointed out that it was the same name as the environmental campaign group whose road-blocking tactics government ministers have repeatedly criticized.