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Why Did Green Deal Money Run Out So Quickly?

August 4, 2014

By Paul Homewood

 

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http://www.telegraph.co.uk/finance/personalfinance/energy-bills/11006180/Was-Green-Deal-cashback-scheme-rigged.html

 

The Government announced a couple of weeks ago that they were closing their Green Deal Home Improvement Programme for the year, after it ran out of money after just a couple of months. This was hardly surprising, since the Deal involved giving away free money to people.

The Programme supplemented the old Green Deal, which only lent money to householders for energy saving improvements, with the logic that energy savings would exceed repayment costs. Most people though were reluctant to take on more debt, and were suspicious about the savings they were told they would make. Consequently, very few took up loans and the new scheme was launched in June this year.

It now appears that some of the money may have been paid out fraudulently. The Telegraph report:

 

An investigation has begun into the sudden closure of a cashback scheme for households to install energy-efficient home improvements, amid concern that many of the applications in a last-minute deluge were not genuine.

The Green Deal Home Improvement Fund, which opened in June, offered households up to £7,600 each to install measures such as solid wall insulation and double glazing.

The fund closed abruptly on July 24, without notice, due to “overwhelming popular demand”. The Department of Energy and Climate Change (DECC) had announced reductions to the cashback rates two days earlier.

Households have been left confused and angry at the fund closure. Thousands of home owners who paid for a Green Deal assessment to qualify for cashback, but did not register in time, will lose out.

Jonathan Reynolds, Labour’s opposition energy minister, questioned whether the deluge of applications was caused by “the speculative activity of those seeking to get their hands on as much public subsidy as possible” in a letter to the public accounts committee.

Mr Reynolds has written to the select committee asking for an investigation into the fund’s closure. “The fact that all funding allocated to the scheme has now been spent, less than two months after the scheme was launched, will mean that many customers who have paid around £100 for a Green Deal assessment will now be out of pocket,” he said.

A DECC spokesman said: “We are monitoring voucher redemption closely, there is anecdotal evidence that some customers may not go on to install, but it’s usual to see a degree of drop off in any scheme."

The spokesman said: "We have been made aware of rumours of speculative or ‘phantom’ lead generation activity taking place where vouchers are being issued without genuine customers agreeing to the scheme terms and conditions.

"We are investigating these rumours and will keep you informed of our findings and any subsequent actions."

Matt Richardson, a 35-year-old firefighter, paid £144 for an assessment. Originally, households could claim £6,000 towards installing solid wall insulation.

The family had already removed about 400 tiles from the front of the house in Newbury, Berkshire, in preparation for the work when the fund closed to new applicants. “Without the £6,000 we simply cannot justify spending the large sum of money solid wall insulation requires,” he said.

The department received 9,463 applications in the final week of the scheme – thought to be worth about £70m – compared with 2,261 applications the previous week. It is unclear how many vouchers have been cashed in after work has been completed.

http://www.telegraph.co.uk/finance/personalfinance/energy-bills/11006180/Was-Green-Deal-cashback-scheme-rigged.html

 

 

 My Thoughts

1) When you are giving away free money, it is hardly surprising if some people with no entitlement try to claim. Much of the problem appears to lie with DECC’s desperation to get things moving quickly in order to proclaim the scheme’s success.

Why were no proper safeguards put in place, even if that meant delays?

2) I do not have a great deal of sympathy with those who have shelled out for assessments, or started peeling tiles off their walls. (CORRECTION – I have absolutely no sympathy!) If they want to grab free money that other taxpayers have funded, that is their lookout.

3) We are continually told that these sort of energy saving improvements are more than self financing. If this is so, why do these people need to be bribed?

Why does Matt Richardson say “Without the £6,000 we simply cannot justify spending the large sum of money solid wall insulation requires”.

And why are thousands of others “confused and angry”? Hard luck – the money’s run out, so just go ahead with your home improvements anyway instead of expecting someone else to pay for them.

9 Comments
  1. quaesoveritas permalink
    August 4, 2014 11:37 am

    Whenever there is free Government money, there will be fraud.

  2. August 4, 2014 11:57 am

    The truth is that most of the potential claimants do not believe that the scheme will be self-financing in any reasonable period. Of course they are looking at getting money from the government. I do have some sympathy with them as they have paid out up front for a survey having been told that the money is there and now the government has reneged in short order. This will reduce still further any trust people have in the government.

    • mkelly permalink
      August 4, 2014 1:29 pm

      This will reduce still further any trust people have in the government.
      ======

      Good.

  3. August 4, 2014 1:30 pm

    This money would have been better spent on developing improved building standards and encouraging their take up by the building industry, though of course that would be a long game which wouldn’t garner many vote winning headlines.

  4. August 4, 2014 1:38 pm

    I’ve just realised that these bozos probably made many phone calls to us, only to be treated as a bunch of fly-by-nights peddling some bogus rubbish. So we were correct, then.

  5. August 4, 2014 1:41 pm

    You wrote – “Why were no proper safeguards put in place……., ”
    Come on, you know why. It’s because none of these empty suits and bums-on-seats have got any skin in the game. They could care less!

  6. John F. Hultquist permalink
    August 4, 2014 3:02 pm

    In the great USA the scam would start as soon as the program planning became known. Applications would appear to come from many hundreds of localities supported by bogus assessment firms. A home owner could be given a 30% cut on the subsidy just for using her/his address while 70% (numbers may vary) going to the faux-assessor.
    By the time the DECC figures out what happened the money will be gone and the home owners will have more explaining to do. Maybe some will have to pay or lose a home – all doubtful. Likely you have heard the end of this story.
    Investigation and attempted recovery of funds will be as costly as the money wasted so far. So double the loss.
    A good flim-flam episode.
    http://en.wikipedia.org/wiki/The_Flim-Flam_Man

  7. Joe Public permalink
    August 4, 2014 7:54 pm

    That wasn’t very thorough reporting by the Torygraph.

    Nowhere do they give voice to a whinging ‘Assessor’ who’s forked out £500 from his own pocket, to attend a 4-hour course to become a fully-qualified “Energy Efficiency Consultant”, and has the ‘Certificate’ to prove it.

    [For the avoidance of doubt – /sarc]

  8. A C Osborn permalink
    August 5, 2014 2:57 pm

    Paul, Rog, another case of a truthful Scientist’s persecution by a University with ties to Wind Power.
    See
    http://antigreen.blogspot.co.uk/

    Sacked for telling the truth about Wind Turbine noise.

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