Hannah Vicker, chief of staff of construction giants Mace Group, interprets the scaling back of the £28 billion ambition as “a pragmatic decision made in the face of huge economic uncertainty”
This week saw the scale back of Labour’s Green Prosperity Plan; and whilst the energy transition elements were protected, the funding ringfenced for installing energy efficiency measures in our homes was scaled back.
As a leader in the construction industry, who would benefit from an expansion in this market, you’d think then perhaps I would be up in arms over the lost opportunity to secure some of the pledged Warm Homes Plan – now scaled back from £6bn a year to just £6.6bn over five years. In fact, I’m interpreting it as a pragmatic decision made in the face of huge economic uncertainty.
The reality is that domestic retrofit is one of the most complex and intractable policy areas to deliver against in our industry. The size of the challenge is enormous – 11 million homes to be upgraded by 2035 if we are to meet the CCC’s targets. It’s also one where the evidence shows that blunt application of Government subsidy just doesn’t have much of an impact. Currently it can cost almost as much to find people willing to have their homes retrofitted as it does to actually retrofit them.
We know the answer to improving energy efficiency is not just Government pouring money into subsidies. The picture is complex and requires a long-term multifaceted policy response to manage the confluence of consumer awareness, regulation, private sector finance and influencing behaviour, not just flooding the market with Government funding.
You just can’t deliver change on this scale without full buy-in from the public – it’s no exaggeration to say everyone’s home is their castle, it’s the single largest investment most of us will make – we will not be rushed into costly capital investments at a time when mortgage rates are already eating away at household budgets.
Without first securing consumer confidence, investing billions of pounds into retrofit subsidies will represent poor value for the taxpayer.
Having said that subsidy funding has its place in specific circumstances – for example, carefully targeted energy efficiency interventions to support the health and financial wellbeing of pensioners or enable key workers to reduce their bills is hard to disagree with given the wider societal benefits. In parallel as an industry we need to target investment in skills and capabilities across our sector, developing our competence in this new skillset and professionalising the routes to market so that consumers can access these services more easily and over time crucially more cheaply
So – while some in our industry may mourn the loss of a transformative subsidy that would have kept the lights on for a few years; other will be happy that Keir and Rachel are taking a sensible and pragmatic approach. Using this announcement as a foundation for a mature, long term plan that Government, industry and most importantly the public can have confidence in might just be the key to unlocking this perennial challenge.
I know I speak for more than just Mace that this sort of conversation going forward would allow businesses who see the need and want to seriously invest to develop the skills and products to deliver this national endeavour to breathe a sigh of relief. In a time of financial uncertainty and expensive Government debt, we’d rather we spent the time developing a private-sector led solution that is sustainable, consumer-friendly – and crucially one that works.