The government must act quickly on energy efficiency delivery – damage has already been done
The fallout from the government’s axeing of Green Deal funding took another grim turn this week, with two installers – Mark Group and Climate Energy – falling into administration. The fate of the companies, given the government’s high profile cuts to subsidies for the Green Deal and other retrofit initiatives, and before that the much maligned delays in the programme gaining any traction, may not come as a shock to many. But the fact that these companies between them employed more than 1,000 staff in what was just three years ago lauded as a growth area for UK expertise, is just one sobering reason to again consider the fiasco around green retrofit in the UK.
This week, we look back at perhaps the highest profile scheme to be axed amid the government turning its back on the Green Deal: the £1bn Birmingham Energy Savers scheme. The programme, under which Carillion was contracted to deliver an environmental retrofit of swaths of poorly insulated housing stock in a city with virtually the worst record on fuel poverty in the UK, was axed by Birmingham City council last month. A report prepared for the council’s cabinet blamed the failure of the Green Deal on a national level for the failure of the scheme to take off with householders. As far as missed opportunities go, the situation is pretty clear cut. As the former deputy leader of the council, Paul Tilsley, says, Birmingham could have “cut down on emissions, created employment and overcome fuel poverty”.
Even the industry giants like Carillion, whose balance sheets can withstand the sudden dissolution of a sector they expected to offer a growing pipeline, cannot also absorb the hundreds of specialist staff they have employed elsewhere in the business
Some councils, like Birmingham, are so convinced by the potential benefits of retrofit work to their communities that they are still trying to persevere with creating their own, albeit likely vastly reduced, programmes of work. But despite this leadership from local authority figures who – you may argue – are better placed than those ensconced in Westminster to assess policies that might benefit the lives of those who live in their towns and cities, the reality is that to do so they will be fighting an uphill battle that few would back them to win.
This is partly due to the difficulty in finding funding for such projects, or even consumer awareness programmes, on already stretched local authority budgets. But it is, as the fate of firms such as Mark Group and Climate Energy illustrates, also because what market capacity did develop to deliver such schemes is now rapidly being lost.
For businesses like these – the same technical specialists and SMEs that the government claims are so essential to the UK’s economic success – there often simply is no place to turn when the market they had banked on thanks to government encouragement collapses in front of them. Meanwhile, the workers who they trained and recruited may, in the absence of jobs among other specialist providers, switch to another area of construction; just as likely, however, they will be lost to the industry altogether.
Even the industry giants like Carillion, whose balance sheets can withstand the sudden dissolution of a sector they expected to offer a growing pipeline, cannot also absorb the hundreds of specialist staff they have employed elsewhere in the business. In Carillion’s case, the contractor had to undergo a £40m restructuring programme as a result of changes to the Green Deal and other government policies, as many of the workers lined up to deliver green retrofit initiatives were just that, specialist staff – and they cannot quickly be transferred to other schemes.
BRE chief executive Peter Bonfield’s review into future energy efficiency delivery in the UK, commissioned by the government to inform its future policy, is due in March – nine months after it was launched. A review charged with coming up with a cost effective way to replace an initiative with the scale of difficulties as the Green Deal is clearly going to take time. But with every month that passes, more expertise will inevitably disappear.
Which is why the real test for whether there is even any medium term cause for optimism for those who see the benefits retrofit can offer – for the environment, fuel poverty and employment – will lie in how quickly the government considers and acts on the recommendations of that review. So far, the signs are far from good.
Sarah Richardson, editor
There will be a session on Infrastructure, cities and the northern powerhouse at this year’s Building Live event on 26 November.
For more information and to book tickets go to: www.building-live.co.uk/programme