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Fri December 06 2019

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Construction leaders issue Green Deal crisis call

1 Jul 13 A cross-section of construction industry leaders has written to all three main political parties calling on them to come together for urgent action to ensure the Green Deal does not fail.

The initiative was orchestrated by the UK Green Building Council in response to the publication of the first quarterly Green Deal statistics showing that just 241 Green Deal plans had been requested by 16 June and only four plans has been signed.

The letter (below) is signed by a chief executives from housing, energy, finance and construction companies. It is addressed to energy secretary Ed Davey (Liberal Democrat), minister Greg Barker (Conservative) and shadow energy minister Luciana Berger (Labour).

The letter outlines a number of perceived barriers to the uptake of energy efficiency measures through the Green Deal such as the lack of long-term structural incentives, the current interest rate for Green Deal finance and the complexity of the scheme.

UK-GBC chief executive Paul King said: “It is obviously disappointing that more Green Deal assessments have not been turned into finance plans, and it shows just how crucial additional incentives are to drive take up.  But we simply cannot let this fail – retrofitting the UK’s housing stock is too important for reducing energy bills, improving health, creating jobs in the construction sector and avoiding costs of new generating capacity – and no one has a credible alternative.

“Business leaders are saying loud and clear that we need to forge a new consensus between politicians of all parties, the private sector and the public around retrofit, to depoliticise something that simply has to be done. It will require some tough choices, but it is absolutely in the public and nation’s best interest to address this as a matter of urgency. The Green Deal provides an important foundation to build on.”

Full text of the letter

We are taking the unusual step of writing the same letter to all three of the main political parties, setting out our major concerns with current retrofit policy and our belief that we can only address this most urgent of challenges with a greater degree of cross party consensus, and collaboration between government and industry.

Government’s own figures show that meeting our legally binding carbon targets requires a high level of retrofit across the UK’s 26 million domestic properties, at an average of one home per minute between now and 2050. Clearly this is a monumental task, but it also represents a tremendous opportunity: to reduce energy bills, improve health, provide jobs in the construction sector, and avoid additional costs of new generating capacity.

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However, to have any chance of successfully tackling this, it will require government – either this one, or indeed any future one – to address the following major issues:

Green Deal interest rates: The current rate of interest for Green Deal finance is in danger of acting as a major disincentive to take up, as well as minimising the extent of the measures available in a Green Deal package. Taking inspiration from the effect of recent government intervention to support new build homes, government should explore, with stakeholders, what options are available to reduce risk associated with providing Green Deal finance – even if this means greater intervention in the market.

Long term structural incentives: Even if Green Deal was available at a much lower cost of finance, long term structural incentives would still be needed to ensure sufficient uptake. Council tax or stamp duty could be used to send a signal to consumers and the market on the direction of travel, and both could be applied in a fiscally neutral way to HMT. Regulation could also be used, in particular Consequential Improvements, which government itself has estimated would lead to an additional 2.2 million Green Deals being taken up.

Stakeholder engagement: There needs to be a better on-going dialogue between government and those trying to deliver the Green Deal on the ground, in order to overcome obstacles, reduce unnecessary complexity, identify future issues and learn lessons. At the very least this should take place through a high level industry advisory board co-chaired by a minister and a senior industry figure. It could also involve a more operational body, or ‘hub’, which government has previously expressed support for.

Long-term certainty and political consensus: There is an increasing sense that the Green Deal, and indeed energy bills more generally, are being used as a political football, which is not good for confidence in the market. These challenges will affect any party, or parties, of government and very bold decisions will be required. We believe there needs to be a new consensus forged between the main parties around retrofit, to depoliticise what is ultimately a long-term challenge that it is in the nation’s interest to successfully address.

Yours sincerely,

  • Paul King - Chief executive, UK Green Building Council
  • James Cameron - Chairman, Climate Change Capital
  • Mark Clare - Group chief executive of Barratt Developments Plc
  • John Frankiewicz - CEO, Willmott Dixon Capital Works
  • Peter Hindle - general delegate, UK, Ireland and South Africa, Saint Gobain
  • Ian Marchant - CEO, SSE Plc
  • Gene Murtagh - CEO, Kingspan Group Plc
  • John Sinfield - Chief Executive, Knauf Insulation
  • Russell Smith - Managing director, Parity Projects & acting chairman of RetrofitWorks
  • Nigel Taylor - Chief operating officer, Services, Carillion Plc
  • Peter Walls - CEO, Gentoo

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