Exclusive: Cameron in urgent bid to save Green Deal

David Cameron has stepped in to rescue the Green Deal by commissioning the Cabinet Office to put together an urgent briefing on how the scheme can be modified to avoid a collapse in insulation installations.

The move comes just weeks after the success of the flagship energy efficiency policy was put at risk by the prime minister’s intervention to block the so-called ‘conservatory tax’ that was touted by ministers as key to driving take-up of the Green Deal.

The Cabinet Office interviewed senior figures in the sector over the weekend to establish what must be done to make the scheme viable amid increasing concern that it will prove a damp squib when it launches in October this year.

Building understands the results will be presented to the prime minister, deputy prime minister Nick Clegg and energy secretary Ed Davey early next week.

Andrew Warren, director of the Association for the Conservation of Energy, who was interviewed by the Cabinet Office for the briefing said: “We talked about the need to use stamp duty and council tax [to incentivise the scheme] and how the £200m [set aside to aid the scheme’s launch] should be used.

“It very much needs overt government endorsement or else the Department of Energy and Climate Change’s economists’ view that this is a train crash will come true.”

The rescue bid comes just weeks after Number 10 moved to block changes to building regulations which would have forced people to make energy efficiency upgrades when extending their homes, a policy which was touted as bolstering the Green Deal’s take-up.

Following Cameron’s intervention construction firms warned that the scheme now looked like a less attractive prospect for investment.

As revealed in Building in January, the government’s own impact assessment for the Green Deal shows that loft insulation and cavity wall insulation will reduce by 93% and 70 % respectively under the scheme.

The industry has also been increasingly concerned about the government’s proposed “soft launch” for the scheme in the autumn, which has prompted fears of limited take up.

As Building reported in March, the big six energy companies have lobbied ministers to delay the launch of the scheme until early 2013 to ensure everything is in place from the outset and avoid the kinds of problems that have beset the prime minister’s mortgage guarantee scheme, which housebuilders say was launched  prematurely.

Shadow climate change minister Luciana Berger said Cameron’s latest move move was a “clear admission” from the prime minister that the Green Deal was a “complete mess”.

“For months the government ignored Labour’s warnings that without serious improvement the scheme will be a car crash, yet now it seems panic has set in,” she said.

“As it stands the Green Deal leaves the public exposed to miss-selling, hidden charges and high interest rates, while giving them few incentives to take out a package in the first place.”

A spokesperson for the Cabinet Office said: “It is not unusual for civil servants to brief the prime minister and deputy prime minister on the progress of policies.

“The Implementation Unit [which is putting together the briefing] was set up to ensure that headline coalition policies are on track to fulfil their potential and really make the intended difference to people’s lives.”