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Nearly half of all people working in the insulation industry could lose their jobs because of delays to the start of the Green Deal, insulation firms have warned the government.

In a letter sent to the offices of business secretary Vince Cable and energy secretary Ed Davey, obtained by 好色先生TV magazine, leading insulation manufacturers and installers said they expected up to 44% of jobs to go in the industry in 2013, after delays have hit the launch of the government鈥檚 flagship energy efficiency scheme.

The Green Deal aims to boost the uptake of energy efficiency measures in buildings by providing low cost loans, which are tied to the property and paid off over time through energy savings. The government has predicted jobs in the sector will grow to 60,000 by 2015 under the scheme, which is due to be launched in October this year.

However, the letter from the industry leaders said research by the Association for the Conservation of Energy, whose director Andrew Warren also signed the letter, said the Green Deal would not now be ready 鈥渢o go live on a mass market basis as promised in October 2012 or in January 2013鈥� and now the 鈥渂est guess鈥� was that the scheme would not be 鈥渇ully functional鈥� until September 2013 - a year later than originally planned.

It said that as a result of this delay the number of insulation jobs could fall from 36,000 this year to 20,000 in 2013 - a drop of 44%. 鈥淪ome insulation companies are being asked by their Group management to make decisions on the long-term viability of their UK presence in September 2012, hence the urgency of seeking solutions to this issue.鈥� the letter said.

The letter also said the tax take for the Treasury was expected to fall 拢250m as a consequence of the job losses - a figure the letter described as 鈥渟tartling鈥� and which it said didn鈥檛 take into account the impact on the benefits budget of those people made unemployed.

Among the signatories to the letter were Bill Rumble, chief commercial officer at insulation installer Mark Group; David Robson, managing director of InstaFoam and Fibre at insulation installer and manufacturer InstaGroup; and John Sinfield, managing director at manufacturer Knauf Insulation.

The letter said the reason for the anticipated drop in workload was that while the current government insulation programmes - the Carbon Emissions Reduction Target (CERT) and the Community Energy Savings Programme (CESP) - were due to end in December 2012, the Green Deal was not expected to be 鈥渇ully functional鈥� until September 2013.

It said a major barrier to getting work started earlier was the lack of Green Deal finance from the Green Deal Finance Company (GDFC), set up to channel cheap finance for Green Deal providers, which is not expected to become available until April 2013.

鈥淲ithout Green Deal finance available, no one will take up a Green Deal Plan; consumer confidence will be lost at the beginning of a new scheme, and once lost will take time, effort and money to restore,鈥� the letter said.

鈥淒espite a real desire to achieve success, promises made but not delivered and a gap in delivery could together have very serious consequences on growth in the UK, on unemployment numbers, and on achieving the carbon savings across the domestic building stock.

鈥淐ontinuity of delivering insulation measures into the homes of British people will be stalled and whilst that is happening, industry might choke and falter, with some businesses looking at the real threat of closing and making their people unemployed during the autumn of 2012.鈥�

It recommended that the government extend targets for energy companies under the current CERT and CESP programmes into the third quarter of 2013.

Plus, it said the government should include low cost insulation measures in the Energy Company Obligation for a transitional period of 12 months.

It said that doing this would ensure work remained available while methodology for accrediting hard to treat cavity jobs under the ECO was developed. The ECO obliges energy companies to roll out insulation to low income households.

Luciana Berger, Labour鈥檚 shadow climate change minister, said: 鈥淭his warning that the Green Deal won鈥檛 be fully functioning for a year is a blow for businesses in the energy efficiency sector and the millions of families struggling with the cost of sky high energy bills.  

鈥淚f done properly a pay-as you鈥搒ave scheme could reduce carbon emissions, lower gas and electric bills and create thousands of new jobs. Instead the Government鈥檚 chaotic mismanagement of the Green Deal will mean thousands of jobs losses and cost the treasury hundreds of millions in lost revenue.

鈥淢inisters must act now to make the Green Deal a good deal for consumers and get the green deal up and running as soon as possible.鈥�