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The government has admitted that its proposed cuts to one of its flagship retrofit schemes will mean 14,000 fewer jobs will be created in the energy efficiency sector as spending is slashed by nearly 拢1bn.

The government announced a series of changes to the Energy Companies Obligation (ECO) in the Autumn Statement in December as part of a drive to cut levies on energy bills, which ministers said were driving up prices.

Under the changes, the carbon reduction target energy firms are required to meet through the scheme was slashed by 33%, while the timetable was extended by two years to 2017, effectively halving the impact of the scheme and meaning there will be less investment in energy efficiency in the short term.

Last week energy secretary Ed Davey announced a consultation on the changes at the Ecobuild event in London, which he said were aimed at ensuring ECO 鈥渄elivers in the most cost effective manner possible鈥�.

But a Department of Energy and Climate Change (DECC) impact assessment on the proposed changes, published alongside the consultation, reveals the cuts will lead to 14,000 fewer jobs being created in the energy efficiency sector over the next three years.

It predicted that without the cuts the scheme would support up to 50,000 jobs through to 2017, but with the proposed changes this would fall to 36,000.

The impact assessment showed 11,000 fewer jobs would be created in the supply chain; 2,000 fewer installer jobs would be created; and 1,000 fewer Green Deal assessor jobs would be created as a result of the changes.

It also showed the scheme, in its current form, would cost 拢2.75bn between January 2013 and the end of March 2017, but that this would fall to 拢1.85bn if the cuts are introduced, a drop in spending on energy efficiency measures of 拢900m.

The impact assessment also showed the number of hard-to-treat cavity wall installations between January 2013 and March 2017 would more than halve as a result of the changes and the number of solid wall installations - both external and internal 鈥� would fall by 11% to 121,000 over the period (see graph).

Sustainability consultant David Strong said: 鈥淭he impact assessment will have been massaged to give the best possible position and it鈥檚 still pretty damning.鈥�

He added that the energy companies that have pushed for the changes 鈥渉ave the government on the run鈥�.

Steven Heath, external affairs director at Knauf Insulation, said the cuts were a 鈥渟tep backwards鈥�.

鈥淚t鈥檚 a clear negative signal to industry that the government commitment is now, in essence, 14,000 jobs less,鈥� he said.

Heath added that the industry jobs were not just 鈥渇or the sake of it鈥�, but were directly focused on enabling the government to meet its own carbon reduction commitments.

Pedro Guertler, head of research at the Association for the Conservation of Energy, which has campaigned against the cuts, said the fall in jobs was 鈥渘ot good鈥�.

鈥淭he changes don鈥檛 bode well for investment in energy efficiency, especially not foreign investment,鈥� he said.

Guertler said other countries would now be more attractive investment opportunities for multinational companies.

Labour鈥檚 shadow energy minister-Jonathan Reynolds said: 鈥淭hese figures aren鈥檛 surprising, but they are extremely disappointing none the less.鈥�

鈥淏y giving in to the demands of the big energy companies the government have left consumers out in the cold and put thousands of jobs at risk.

鈥淲e know that changes needed to be made to ECO in order to make sure that the money is well spent and goes to those who need it, but the only people who will benefit from the government鈥檚 changes are the big energy companies.鈥�

A DECC spokesperson said: 鈥淲e are making it simpler and cheaper for people to take control of their energy bills, stay warm and improve their homes.鈥�