Energy-saving scheme hitting homeowners with hidden costs

A controversial Government energy-saving scheme has cost the taxpayer millions of pounds and made homes harder to sell, it has been claimed.

The Green Deal is designed to help homeowners make energy-saving improvements such as installing a new boiler or insulating their home. It was heralded as a “revolution” in the UK’s energy sector, which would help hundreds of thousands of families save on their bills.

But a year after it was introduced, just 8,100 homes have signed up including 1,600 in Scotland and experts warn those who have may find their homes harder to sell.

The revelations come just weeks after the company set up to administer the loans had to be bailed out, with a staggering £34 million of taxpayers’ money due to a lack of activity, sparking renewed calls for the scheme to be scrapped.

Tom Greatrex, Scottish Labour’s Shadow Energy Minister and MP for Rutherglen and Hamilton West, said: “The Green Deal is failing to deliver. It needs to sign up 5,000 people a month to be viable – in the first two months it had 12. This is policy failure on a staggering scale.

“Labour will scrap the Green Deal and implement a new package of policies to upgrade at least five million homes over 10 years. We’ll offer up to a million interest-free loans, set a new target for landlords to get cold, leaky properties to a decent standard and designate energy efficiency as a national infrastructure priority.

“Under the Tories’ failing plan, Britain is facing an energy bill crisis, with millions of people struggling to heat their homes. Labour has set out radical plans to reform the market and freeze energy prices until 2017, saving the average household £120 and Scotland £500m.”

The scheme, which was introduced in January 2013, allows major energy-saving renovations to be carried out on your home, funded through a loan bolted on to customers’ energy bills.

But latest figures have revealed just 8,000 homes UK-wide have taken up the offer over the last year, and the company set up to handle the loans had to be bailed out with £34m taxpayers’ cash, revealing it needs 60,000 sign-ups a year to break even.

Critics believe one of the major reasons it has failed to take off is because the loan, which could span 25 years, remains attached to the home until it is paid off, which means if the house is sold the new owner must take on the debt.

People are also said to have been put off by the rates of interest on the loans, which can be as high as 9%, and the Government admits there is no guarantee people will save money.

Mark Hayward, managing director of National Association of Estate Agents, said: “The Green Deal needs to be declared to potential home buyers and it could prove off-putting under the knowledge the house comes with a loan that needs to be repaid.

“While homes with the Green Deal may prove more energy-efficient, buyers generally will not be swayed. They purchase a home based on their heart rather than head, so ultimately it is not viewed as a pull factor.

“The Green Deal may also affect how much a potential buyer is willing to pay. If there is a significant loan to be paid back, this could affect the offer they are willing to make on the house.”

In a bid to rejuvenate the scheme, the Government introduced a Green Deal Home Improvement Fund (GDHIF) which enables people in England and Wales to claim back cash for certain energy-saving home improvements, while the Scottish Government runs its own scheme.

But this has also had problems including the fund shutting without notice, leaving people out of pocket. Industry experts believe it is now too late to rescue the scheme.

Mark Todd, director of comparison website Energyhelpline, said: “It seems to be a massive waste of Government money.

“It should be scrapped and they should bring back the more sensible stuff from the past by subsidising energy-saving measures for everybody. And, if you’re from a vulnerable group, then you get it for free.

“It would be a much more cost-effective way of getting people to insulate their homes.”

Meanwhile, anecdotal evidence has emerged that people are being driven away from the Green Deal by rogue green energy firms which make promises and fail to deliver.

The Sunday Post has been contacted by numerous people who claim to have been promised enticing deals, but after paying up to £299 for home assessments, no work is ever done. Internet forums have also been inundated with similar complaints.

Last week the Government revealed nearly £1m of homes had benefited from energy-saving measures through its policies, with the vast majority coming from the Energy Companies Obligation which orders the providers to help customers save cash.

A Department of Energy and Climate Change spokesperson said: “The Green Deal is an ambitious programme. Through Green Deal Finance, GDHIF, ECO and Green Deal Assessments we’re driving step change in household energy efficiency.

“Thanks to our policies, one million energy efficiency measures such as new boilers and insulation have now been installed in less than two years.”

Case study

Angry customers claim they have been left hundreds of pounds out-of-pocket after signing up for Green Deal schemes.

The Sunday Post has been contacted by numerous customers who claim they have paid £300 to sign up for Green Deal boilers which are never delivered.

Among them is Cyril Swales, 86, from Scarborough, North Yorkshire, who received a cold call in which he claims the agent asked him if he claimed his “free boiler”. An assessor, from Tivium Ltd, went to his house and after checking his loft, confirmed he was entitled to a new boiler. But the married grandad-of-nine said he was ordered to pay an assessment fee of £299 before the installation could progress. After paying the cheque he claims the progress quickly halted and he never received his boiler or his money back.

He said: “They said they would pass the money on to the Government and then the Government would refund us £270. We paid there and then. I have had several conversations with them and sent claim forms in to try to get my money back but nothing. I think we have been treated very badly.”

Michelle Dempsey, 36, from Maryport, Cumbria, is also demanding her £299 assessment fee back, after claiming the same firm failed to tell her she was not eligible for the scheme before she paid. The mum-of-two paid for the assessment to get a new boiler but says she was only told afterwards that the energy supplier she is with is not part of the Green Deal scheme.

“I feel badly let down, they should be telling people up front you need to be with a specific energy supplier before you sign up.”

Tivium Ltd, which is based in the North East but also has an address in London, says on its website it is no longer accepting new customers.

The firm was unavailable for comment when contacted by The Sunday Post.