The Insulation Industry Forum (IIF), representing more than 70% of the UK’s £700m insulation industry, has written to energy secretary Ed Davey (see letter below) to point out the scale of the downturn likely between the ending of the existing subsidy schemes for cavity wall solid wall and loft insulation, and the Green Deal and Energy Company Obligation becoming fully functional.

Based on the government’s own figures, there is expected to be an 87.5% reduction  in the loft insulation market, a 57% reduction  in the cavity wall insulation market and a 16% drop in the solid wall insulation market.

As a result of the hiatus between the two support regimes, 16,000 (45%) of jobs in the insulation industry will be lost in 2013, the majority of which will be in loft insulation and cavity wall insulation, it is feared. The lack of any transition planning will also stifle and restrict investment and job creation in solid wall insulation which is necessary to transform the market in order to meet government carbon targets, the IIF argues.

The IIF predicts that the closure of loft and cavity wall insulation manufacturing plants and loft and cavity wall insulation installation contractors going out of business, with employee numbers reduced by 45% from 36,000 to 20,000 in 2013.

This will be combined with a lack of capability for the insulation installation industry to develop the training programmes and capacity necessary to deliver the ambitions for solid wall insulation market transformation.

On behalf of the IIF, Knauf Insulation managing director John Sinfield said: “The loft and cavity wall insulation installation industry will fall off a cliff in 2013.

“The policy by the current government risks destroying businesses, putting 16,000 people out of work and undermining the coalition’s green ambitions for the country.

“It will result in a lack of continuity of work from 1st January 2013 and dramatically fewer insulation installations in 2013 – we predict 16,000 job losses, many of them before Christmas.

“We are calling on the secretary of state to recognise the scale of the problem that is about to hit our industry and develop a set of measures to address the insulation gap and implement a suitable solution”.

Supporting the Forum, Which? executive director, Richard Lloyd, said: "Consumers tell us that rising energy prices are one of their biggest concerns. Lagging lofts and filling draughty cavity walls are relatively straightforward and low cost ways to reduce bills, so this warning about a drop in basic insulation work is clearly worrying. Even under the government's current schemes it's estimated there are still just over eight million homes that need their loft insulation topping up and six million homes that need cavity walls filled. With all of this still left to complete, the government must ensure that support is available to get these jobs done."

Letter from Insulation Industry Forum to energy secretary Ed Davey

Dear Secretary of State,

Although there are numerous positives to the Government’s Green Deal and Energy Company Obligation (ECO), the Insulation Industry Forum, which represents more than 70% of the UK’s £700m a year insulation industry is extremely concerned about the Government’s plans for its implementation. The withdrawal of the existing subsidies ahead of Green Deal Finance and ECO coming fully on stream will put 16,000 people out of work in the industry over the next year – with many jobs going before Christmas, the majority of which will be in loft insulation and cavity wall insulation.

The Government’s own Impact Assessment shows that the loft and cavity wall insulation installation industry will fall off a cliff in 2013, even while assuming all necessary Green Deal and ECO mechanisms are in place from January 2013.

This will have severe implications for our industry. With declining demand, loft and cavity wall insulation manufacturing plants will struggle to remain at capacity, and subsequently not be able to continue with their current investment levels.  It will also stifle and restrict investment and job creation amongst solid wall insulation companies.

The Government’s own figures suggest this will lead to an 87.5% decrease in the loft insulation market, a 57% drop in the cavity wall insulation market and a 16% drop in the solid wall insulation market. It will also prevent the Government from meetings its green commitments.

We are supportive of the Green Deal and ECO, which we want to succeed. We are therefore calling on the Government to recognise the real threat to thousands of jobs in our industry, and work with us immediately to develop a set of measures to address the insulation gap and implement a suitable solution.

Yours faithfully,

• John Sinfield, Managing Director Northern Europe, Knauf Insulation
• Richard Pemberton, Chief Executive, Celotex
• Tony Hardiman, Chair, Cavity Insulation Guarantee Agency (CIGA)
• John Garbutt, Marketing Director, Kingspan
• Thomas Heldgaard, Managing Director, Rockwool UK
• Alex McLeod, Chief Executive, SuperGlass
• Eamon McDonnell, Managing Director, Isover Saint Gobain
• Padraig Barry, Managing Director, Saint-Gobain Weber
• Neil Marshall, Chief Executive, National Insulation Association (NIA)
• Andrew Warren, Director, Association for the Conservation of Energy (ACE)

Got a story? Email news@theconstructionindex.co.uk