U.K. Government Cuts Funding for Keeping Homes Warm

The U.K. government has cut plans to spend 3 billion pounds ($4.2 billion) insulating homes, in a move that’s at odds with its ambition to eliminate greenhouse gas pollution.

Prime Minister Boris Johnson on Wednesday said the annual underspend for the Green Homes Grant wouldn’t be rolled over into the next financial year because of lack of interest from consumers.

However, the government’s own figures show that more than 86,000 of the 103,833 voucher applications have yet to be approved by officials or have been turned down. That translates to only 5% of the total 1.5 billion pounds allocated for the 2020 to 2021 financial year.

Buildings account for a third of greenhouse gases in the U.K. so sealing up drafty homes is key to the U.K.’s effort to meet a goal of net-zero carbon emissions.

But the U.K. has struggled to convince people to take steps to make their home more energy efficient, which in turn will lower bills. The Green Homes Grant is not the first program that has struggled to get off the ground. In 2015, ministers abandoned the Green Deal, which attached the cost of loan repayments onto a property after low take-up.

“Under-spending of the budget is one of the worst-case scenarios for an energy efficiency program like the Green Homes Grant,” said Meredith Annex, an analyst for BloombergNEF.

Abandoning these programs can jeopardize decarbonization goals, maintain the perception among homeowners and contractors that these projects are too difficult to pursue, she said

The Green Homes Grant began in September, promising homeowners as much as 5,000 pounds for work such as fitting insulation. Those on low incomes can get as much as 10,000 pounds. It had been due to end in March, but slow progress means it has now been extended to March 2022.

©2021 Bloomberg L.P.

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