Is it all going wrong?
Hello and welcome to a special and extra edition of the Sustainable Futures Report datelined Monday 25th January 2021. I’m Anthony Day.
You may remember that back in October I reported on the government’s Green Home Grants scheme which gives homeowners a financial contribution towards improving the energy efficiency of their homes. There’s up to £5,000, or in special circumstances £10,000, for insulating floor, walls or roof, installing a low-carbon heating system like a heat pump or a biomass boiler, or putting in double glazing or a draught-proof door. I also spoke to Simon Ayers at that time. He’s CEO of TrustMark, the accreditation body which certifies the traders who carry out the work.
Recently there’s been feedback from the industry that things are not going well.
There’s a bit of a back story. The previous Green Deal scheme was abused and defrauded by lead generation companies pretending to be installers, which signed up customers to crushingly expensive loans. One of these, Home Energy and Lifestyle Management Ltd, (HELMS) was fined £250,000 for mis-selling but the company was dissolved.
While HELMS was not an installer, the Department for Business, Energy and Industrial Strategy (BEIS) nevertheless took the decision that the scheme would not work with installers but would deal exclusively with homeowners. Many firms have found it very difficult to get information from BEIS.
I’ve heard from a number of insiders and I recently spoke to Bryan Glendinning, CEO of Engenera, a company which provides solar panels, heat pumps and combined heat and power systems to domestic and commercial clients. It also constructs utility-scale ground-mounted solar: solar farms.
With first millions and now billions of pounds allocated to the scheme it must be a brilliant opportunity for companies such as Engenera to fill their order books for months. How’s it going?
Unfortunately it hasn't been like that at all. The principle of the scheme is wonderful, and it is very much what the industry needed. The principle of a grant, either £5,000 or £10,000, depending on the clients, is an ideal way to sort of decarbonise and help the advancement of the green homes programme, but unfortunately the scheme itself has been ill advised, ill managed. There's been a lot of criticism, actually, levied at the Green Homes Grant team, but in reality, it's probably more government that's got the problem because they didn't give enough time, they didn’t process the work properly, didn't allow a company that's done this before to deliver the scheme, and unfortunately it's left a hell of a lot of companies in a very stressed financial state.
I think at the moment we’re probably on the green homes or the grant side of the business, on the heating side of the business, we’ve probably laid off 10 staff. And our call centre: we’ve probably laid off 15 staff in the call centre.
We have 300 jobs that we have looked at. We've got about 55 vouchers through, we’ve done about five installations and we’ve been paid for nothing so far. So at this point in time, we've had to stop working on the Green Homes Grant. Well, we're fortunate because we do a lot of commercial work in the heating and solar markets and we'll be able to, to move on to those and continue trading, but some of the other companies in the industry are really going to struggle with this. There's been obviously quite an outcry about the quality of the delivery of the scheme in its entirety, which is a real shame because the principle of what the government is trying to do is really, really good.
What’s making things so difficult? The application process for the vouchers, which has to be carried out by the homeowner, seems to be a stumbling block.
It's quite difficult for our standard customer. Some of these people are either very old and not computer literate and filling in forms for a lot of them is quite a challenging and daunting task. And that's not everybody because there are a lot of people that are quite capable of doing that, but typically when it gets to some of the people that are on benefits or haven't had the opportunity to look at programmes of this type before and then some might be in fuel poverty or might be in food poverty.
And for those people trying to fill in all the forms and make sure they get everything right - if they’re not sure of a question and they get that bit wrong, it just gets sent straight back. There's no flexibility in the scheme at all in that respect.
What we've had to do was we've put Admin people in our call centre to help clients fill in the forms. In theory, it's, it's not what the plan of the scheme would be but if you don't have that customer care approach you would end up with a lot of frustrated customers getting their schemes or getting the form, the application forms rejected or sent back to them.
That's not for me what the scheme’s about. You're trying to help and support people out of fuel poverty or help them to decarbonise the house. And if you can't help them to make sure the form is filled in properly in the first place, there was going to be in with a challenge.
OK, assuming the form is filled in correctly, how long before the voucher is issued?
It's supposed to be turned round in two or three days, but unfortunately we are finding about two or three weeks. If you imagine we’ve filled in 300 applications and we've got I think 55 of them back. But the first ones we filled in at the very beginning of the process, application number seven, we still haven't got that one back yet.
So that, and, and the bizarre thing with that one is it's actually for our business development manager who works in the field. So he's filled his own form in because he is the client so he knows it's right and he still hasn't got it back.
Eventually the voucher will be issued the job will be done and the next stage is getting paid.
The challenge for us, isn't so much the client point of view, it's working out, um, when you're going to get paid from the Green Homes grant. And the project projects we've installed so far, we haven't been paid.
So can you talk to the people at the Green Homes Grant about it?
Yes, we’re in contact with it, with the organisation, but you do get passed from pillar to post. It's not clear at all, and it's very difficult to get paid. The staff are finding it very frustrating to work with the guys at the moment, and to be fair to some of the green homes grant people, I don't think they know what's going on too much, you know, to be fair.
So it's very ambiguous as to how we're supposed to get paid and when we're going to get paid, although it shouldn't be because it's all in black and white, - what the written word is and what actually is happening is completely different. Unfortunately.
Some of the communication sent out by the government’s contractor has not been helpful.
There was an email, went out to, I think, 10,000 customers on Christmas Eve which was a generically sent out email, telling the customers that all of the systems they've been quoted for were all too expensive. I think that email wasn't even generated in the UK, so I fail to see how without even looking at a system they can decide what is a right price on what's a technically correct offering to the customer. So that created a number of issues right over the Christmas period where our staff were getting calls from people, somebody in floods of tears, thinking I'm going to get me new boiler before Christmas or over the Christmas period - so not getting one at all. For them thinking that they're being duped because they are told by a government body that the price they’re paying was too much. But the system price we're putting in is exactly as the same that we’re charging as many other installers are charging, and that's created a massive issue for both the clients and our staff in general.
And the grant scheme has not generated new business.
When the government announced the Green Homes grant, obviously people didn't want to pay for the systems when they were going to get a, a five or a 10,000 pound grant. So it actually killed the market place in July when they announced it, and then it started to pick up again in September when the scheme started, but the way the scheme has been developed to date, unfortunately, we've spent £250,000 on work to date and not had a penny back.
Unless you've got guidance from above and some wherewithal of how you're going to deliver a scheme in a professional and structured manner that allows the client to get the right system installed for them and the installer to make money and get paid, it isn't going to work. And at this point in time, there's not an installer in the country, I would say, that would tell you anything different. It's not working.
Surely something must be done.
Very much so. You know I've worked on a number of government schemes over the last 25, 30 years. I would say without fear of contradiction that this is probably the worst scheme we’ve ever had. Green homes, the green owned scheme much as a loan wasn't a great scheme compared to the schemes before that, but this one, unfortunately, because of how it's been structured is actually killing the market place and killing the installer network and isn't helping the customers at all. I mean, this is a time we were classed as a heat season through the winter. Where we should be in full production and clients will be really struggling at the moment.
And particularly the ones of haven't got any heating systems in the house or it’s broken, and we couldn't go, we couldn't go and install for them with any confidence of getting paid.
So we really have to stop what we're doing within the Green Homes Grant scheme, and really focus our business on other areas. I have time this week put aside to speak to our MPs because it's a desperate situation.
A desperate situation indeed.
Bryan mentioned the Christmas Eve letter which he said wasn’t generated in the UK. The background to that is that the scheme is run by an American company. The original budget for the scheme was £250 million and it was to be administered by Trustmark, the organisation set up to accredit the installers. However the government decided that the budget would be increased to £2 billion and that this was too much for Trustmark to be responsible for. Instead it awarded a multi-million pound management contract to an American organisation called ICF.
Companies in this industry have taken on extra staff in anticipation of extra demand which has not appeared. They have also spent thousands of pounds on registration with Trustmark which was necessary for them to be accredited with the scheme. They are therefore now very unhappy to find that the government, in order to try and speed things up, has relaxed this condition so that their competitors who did not invest in accreditation can now undertake the work. Clearly this must have implications for the quality of the work.
Manufacturers which have geared up for anticipated demand for the materials for creating energy-efficient homes have found themselves having to mothball plant and lay off workers.
What was intended to be a job-creating scheme now seems to be destroying jobs.
Criticism has been levelled at Secretary of State Alok Sharma who has now been moved out of BEIS to take full-time responsibility for COP 26, the international climate conference to be hosted by the UK next November. He was succeeded on 11th January by Kwasi Kwarteng who had previously been the minister directly responsible for delivering the Green Homes Grant scheme. In his new role Mr Kwarteng will have many other issues to deal with including the national vaccination rollout. The new minister responsible for the scheme, Anne-Marie Trevelyan, has yet to make her mark.
Action cannot come too soon!
Many thanks to Bryan Glendinning, CEO of Engenera Renewables Group. We’ll follow this story and keep you al informed.
That's it for this special edition of the Sustainable Futures Report. There will be another one on Friday as usual. Thanks for listening and thanks in particular to all my patrons who support the Sustainable Futures Report. If you’d like to be a patron for as little as a pound, a dollar or a euro per month you’d be more than welcome. Just go along to patreon.com/sfr.
That was the Sustainable Futures Report.
I’m Anthony Day.
Until next time.