Business

Uncertainty over green subsidies affects energy efficiency work

gas ring
Image caption Energy prices and green taxes have become a highly charged political issue

Millions of pounds' worth of work to make homes energy-efficient is stopping or slowing, amid doubt over the future of green subsidies.

The prime minister has put eco-charges in his sights as a way to reduce bills.

Radio 4's You & Yours found that the money, which should filter down through construction firms, has been affected by uncertainty over green taxes.

E.On, EDF, Npower, SSE, British Gas and Scottish Power told the programme they were distributing funds normally.

Before the current political row over the affordability of energy bills, the government instructed energy companies to raise £1.3bn to improve domestic efficiency.

The money was to be raised and spent before 2015 to fund improvements for the fuel-poor or those with difficult-to-heat homes.

It funds cavity wall insulation, new boilers and external wall insulation.

One construction firm told the programme that £10m worth of funding for solid insulation work, which it expected to receive a month ago from one of the big energy firms, had been withheld.

Their concern now is that they should be on site in January, but work on securing the local supply chain should start now.

Another firm said it had noticed a funding slowdown and was not receiving answers to funding applications.

Most companies still negotiating the funding declined to be named, apart from Gentoo, which is due to start work on a £500,000 project to provide solid wall insulation for 100 homes in the North East.

Director Sally Hancox said: "Since 23 October, when the prime minister talked about rolling back green levies, we've seen a number of energy companies who we're in regular conversation with, basically, pause their activity, and a couple of them have suggested to us they are waiting to see what will happen in the chancellor's Autumn Statement.

"That's 100 homes that aren't going to be treated this winter."

She added the reason given was that the energy firms preferred to manage the process themselves.

Paul King from the UK Green Building Council said: "Some of the energy companies have not been doing what they should have been doing already. Some of them have delivered only 3% of their commitment half way through this programme

"Undoubtedly everyone is waiting to see what the chancellor will say in his Autumn Statement."

First Utility said it would not sign any new contracts until it knew what was going to happen.

The other six firms obliged to raise the eco-funds - EON, EDF, Npower, SSE, British Gas and Scottish Power - said they were continuing to fund work already in progress and projects which had not yet started.