Construction bosses claim energy companies are pulling funding before the outcome of a government review of the scheme


Energy firms have halted work on energy efficiency projects being funded through the Energy Companies Obligation ahead of the results of a government review of the scheme, according to the chiefs of insulation firms,

The government is undertaking a review of the Energy Companies Obligation (ECO), which pays for energy efficiency measures to be installed in some of the nation’s poorest households, as well as other green levies, in an attempt to bring down the cost of energy bills.

But today Andrew Warren, director of the Association for the Conservation of Energy (ACE), wrote to energy secretary Ed Davey to warn of the “devastating” effect the government’s review of ECO and other green levies on energy bills is having on the insulation industry.

Warren, who said he had chaired an emergency meeting of the association’s members, which include Carillion, Celotex, Mark Group and Insta Group, yesterday, said: “No new ECO-related contracts are being signed and committed programmes are being withdrawn.”

He added: “The consequence is that we are in danger of the Big Six effectively deciding the result of the PM’s investigation, by unilaterally terminating their activities under the ECO. The consequences of this for those in our industry operating in this marketplace are deeply alarming, with devastating losses of business confidence.”

He said that ACE expected there to be further job losses in the industry, on top of the 7,000 that he said there had already been this year.

Warren added: “One aspect we do know is that the vast majority of these job losses are from not just SMEs, but from precisely the kind of micro-businesses and start-ups which the Government is ostensibly relying upon to ensure our economic recovery.”

He said ACE was putting together a set of alternative measures that would avoid a cut to ECO but still reduce bills.

A spokesperson for EDF said it had not withdrawn from any commitments. She added: “EDF Energy has established a supply chain of sufficient scale to meet the requirements of its ECO.”

The other energy companies that make-up the big six have been contacted for comment.