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Green Deal cost £17,000 per household, says NAO

roof insulation Image copyright Getty Images
Image caption The Green Deal offered households the opportunity to insulate their homes

The Green Deal - the government's flagship energy-saving programme - cost taxpayers £17,000 for each home that was improved, a watchdog has found.

The National Audit Office (NAO) concluded that "the Green Deal has not therefore been value for money".

Under the scheme, householders were encouraged to take out loans to pay for measures such as insulation or double-glazing.

But only 14,000 households took up the offer, well below expectations.

The Department of Energy and Climate Change (DECC) spent £240m on the programme, which ran between 2013 and July 2015.

But it did not test it with consumers beforehand, said the NAO, and the scheme saved "negligible" amounts of carbon dioxide (CO2).

Savings

The NAO report said the parallel Energy Company Obligation (ECO) programme also increased costs for energy suppliers, and so put up household bills.

"The Department of Energy and Climate Change's ambitious aim to encourage households to pay for measures looked good on paper, as it would have reduced the financial burden of improvements on all energy consumers," said Amyas Morse, head of the NAO.

"But in practice, its Green Deal design not only failed to deliver any meaningful benefit, it increased suppliers' costs - and therefore energy bills - in meeting their obligations through the ECO scheme."

However, the NAO said that the ECO scheme had generated £6.2bn in notional savings on bills paid by some of the most vulnerable in society - measured over their lifetimes.


Analysis: Roger Harrabin, Energy and Environment Analyst

The collapse of the Green Deal has left a big hole in government policies on fuel poverty and climate change.

Many of the people suffering from cold are owner-occupiers in old properties who would benefit from a well-funded and well-organised insulation scheme.

And the UK can't meet its targets with UK homes in such a draughty state.

Campaigners are urging the government to replace the Green Deal swiftly with a better scheme.

They say the government will help insulate 1.2 million homes this Parliament - a quarter as many as last Parliament. That will leave the UK well short of its climate change targets.

They want the government to provide much stronger incentives for people to improve their homes.


Enquiry

DECC said it had stopped funding to the Green Deal Finance Company last July, to protect taxpayers.

It said it would now be designing a new scheme to replace the ECO programme, to run from 2017 to 2022.

That will reduce the amount that households have to contribute by £30 a year.

A spokesperson also said it was now harder to make improvements in energy efficiency, as earlier schemes had tackled the easiest changes.

"As the NAO itself has said, government schemes will deliver over £6 billion of energy bill savings to the most vulnerable and have already helped make more than one million British homes warmer," said a DECC spokesperson.

DECC has also set up an enquiry to examine standards, consumer protection and enforcement of its energy efficiency schemes.

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