National Audit Office slams Green Deal as poor value for money and says government won鈥檛 recoup millions loaned to scheme

Industry is working to ensure Green Deal qualifi cations and accreditation procedures are in place to protect consumers

A damning report from the National Audit Office has slammed the government鈥檚 failed Green Deal initiative.

The report said the scheme was poor value for money and failed to deliver carbon emission savings.

It said this was because the design and implementation of the scheme by Department for Energy and Climate Change (DECC) did not persuade householders that energy efficiency measures were worth paying for.

According to the report, 拢240m of taxpayer money was spent on the scheme.

The report did add that DECC had achieved its target to improve the energy efficiency of one million homes, but said this came 鈥渁lmost entirely鈥� through the energy company obligation (ECO).

It added DECC鈥檚 design of ECO to support the Green Deal meant it cost more for energy companies to meet their obligations, reducing the scheme鈥檚 value for money.

In addition, an accompanying investigation from the National Audit Office (NAO) into Green Deal financing revealed that DECC doesn鈥檛 expect to recover the 拢25m loan it gave to the Green Deal Finance Company nor the extra 拢6m in interest.

The investigation said DECC based its loan on forecasts of 鈥渟ignificant consumer demand鈥� for Green Deal loans but found that demand for Green Deal finance was lower than forecast from the outset, meaning the finance company could not cover its operating costs.

It added that DECC agreed a second loan with the company worth up to 拢34m in October 2014, of which the finance company has drawn down 拢23.5m.

According to the NAO, DECC still expects to recover this loan in full as it will be repaid before other investors in the finance company.

Head of the NAO, Amyas Morse, said DECC鈥檚 鈥渁mbitious aim to encourage households to pay for measures looked good on paper鈥�.

But he added that 鈥渋n practice, its Green Deal design not only failed to deliver any meaningful benefit, it increased suppliers鈥� costs 鈥� and therefore energy bills 鈥� in meeting their obligations through the ECO scheme鈥�.

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