The Chamberlain News

£600m Birmingham scheme to end fuel poverty collapses after Government ‘moved goalposts’

Birmingham city council is scrapping its Energy Savers Green Deal scheme designed to lift thousands of households out of fuel poverty by fitting 60,000 homes with insulation and new boilers by 2020.

The council will terminate a £600 million agreement with Carillion Energy Savers, blaming the Government for overseeing a “flawed” model of financial support and “constantly changing the goalposts” making the scheme untenable.

A cabinet report recommends taking advantage of a break clause to exit the Green Deal contract with Carillion drawn up in 2012.

It states the council and Carillion had no chance of hitting targets established for Birmingham Energy Savers because of the failure of the national Green Deal and changes in the support offered by the Government to green initiatives since the launch of BES.

The goals were based on a number of nationally-based assumptions on how the market for Green Deal would develop and included delivering energy saving improvements to at least 15,000 homes and 40 of the council’s public non-domestic properties.

Council leaders have published a long list of problems with what was once described as a flagship environmental scheme:

• A lack of national marketing to drive demand for the uptake of the Green Deal and the time taken to complete the process being extensive and complex.
• Lower than expected subsidies that required the householder to provide a much larger financial contribution to implement Green Deal measures.
• Doubts over the central tenet of the “golden rule” whereby the costs of repayment never outweigh the savings on the bill.
• Landlords being unable to take advantage of Green Deal due to existing legislation surrounding the Consumer Credit Act which subsequently needed to be amended.
• Concerns that although the concept of a house holder passing the remaining repayments on to the next owner is attractive to them, buying a dwelling that has a Green Deal Finance arrangement tied to it, may make the property less attractive to a buyer.
• A seven per cent interest rate set centrally to be paid for the financing of the Green Deal works against a personal loan rate of three to four per cent available at the time.

Cllr Lisa Trickett, cabinet member for sustainability, said:

Everyone at the council and Carillion Energy Services has done their very best to make this partnership work – but when you are asked to deliver something that is based on a flawed central government model and significant changes in the energy efficiency market, you are faced with an impossible job.

Through Birmingham Energy Savers, we have started the huge task of reducing CO2 and tackling fuel poverty, which affects far too many people in the city, key issues we must address if the city is to become truly sustainable.

With the government constantly moving the goalposts there was absolutely no chance anyone could have hit the final target of 60,000 homes and 1,000 non-domestic buildings across the city at no net cost to the council.

We need to break away from this arrangement and explore the other options that are out there to ensure we lift as many households out of fuel poverty as quickly as possible and reduce carbon emissions in the process.

When the BES contract was drawn up three years ago the then green, safe and smart city cabinet member Cllr James McKay said the scheme represented a major milestone in Birmingham’s green ambitions and demonstrated that “the social justice and environmental agendas go hand-in-hand with each other”.

He declared:

It will reduce energy bills for citizens by up to £300 per year – taking up to 40,000 people out of fuel poverty by 2015 – create jobs in the technology supply chain and ensure that there are less carbon emissions from the city.