The problem with insulating Britain

It’s a simple enough equation. To permanently reduce high household energy bills, cut the amount used in the first place. Yet for all its simplicity, it’s a sum that successive UK governments have struggled to solve.

The UK’s record over the past 10 years in upgrading its energy inefficient housing stock — among the leakiest in Europe — is embarrassing. Former Conservative prime minister David Cameron in 2011 promised a “revolution” in upgrading British property by 2020.

But programme after programme has been fraught with problems. Many of the largest, including Cameron’s flagship “Green Deal”, were scrapped to the distress of companies and climate groups alike.

The recent energy price crisis has triggered a fresh wave of corporate and political enthusiasm for insulating Britain. The government aims to cut energy use in buildings and industry by 15 per cent by 2030. Labour leader Sir Keir Starmer has pledged to spend £6bn a year to upgrade 19mn homes if he gains power.

Funding is evidently important. But botched policies of the last decade show it isn’t always the deciding factor in the success or failure of energy efficiency programmes. Much can be learned from the past decade to ensure the latest promised revolutions don’t, once again, end in hasty retreats.

First, trust. The installation industry today is still feeling the effects of Cameron’s shock decision in 2015 to prematurely end his flagship Green Deal scheme.

Cameron had promised to upgrade 14mn homes over 10 years but ultimately only 14,000 properties were improved. Granted, the programme’s design was problematic. Interest rates on loans for homeowners to carry out work were too high. It involved excessive paperwork. There were some complaints of shoddy workmanship.

Yet scrapping the programme rather than fixing flaws wrought long-lasting damage on an industry that had geared up with staff and materials to deliver it. The installer workforce has since shrunk dramatically.

The Installation Assurance Authority (IAA), a trade body, estimates that in 2012 government energy efficiency programmes supported 54,000 jobs to carry out work such as loft insulation. Today, jobs supported by smaller publicly-funded schemes — aimed largely at social housing, local authorities and the fuel poor — total less than 10,000, according to its modelling.

In 2020 Rishi Sunak, while chancellor, launched a “Green Homes Grant” voucher scheme offering homeowners in England up to £10,000 for work such as draft proofing. But among the programme’s problems were a shortage of accredited installers.

“If you want to build a successful energy efficiency programme in the UK, you have got to provide long-term security and build trust with the industry that you are serious about this in the long term,” said Ed Matthew, campaign director at the think-tank E3G.

The second problem is overcomplicated policies.

Energy companies and installers report problems with one of the government’s current programmes, the Energy Company Obligation (ECO). Aimed at addressing fuel poverty by fitting insulation and heating systems, it is now in its fourth iteration. ECO4 was launched in April 2022 and is targeting 450,000 home upgrades over four years.

By March, though, only 15,000 homes had been improved, according to the Energy Efficiency Infrastructure Group (EEIG), a coalition that includes energy and engineering companies.

Problems lie with strict minimum requirements that make it difficult to find appropriate properties, according to energy groups such as Eon UK. Such problems are pushing some installers to look for work elsewhere. Government officials insist, though, that there has been an increase in delivery in each quarter under ECO4.

Third, persuading homeowners to carry out work isn’t always easy. Programmes such as the Green Deal suffered because at the time homeowners preferred to fund extensions or a new kitchen, according to Noble Francis, economics director at the Construction Products Association.

That will always be a tension. You can’t show off cavity wall insulation to the neighbours. Even so, the government could do more to inform households about less intrusive measures that still make a difference, Francis said. For example, secondary or triple glazing.

The latest efforts to fix Britain’s leaky housing are welcome. Let’s hope that this time the formula is finally cracked.

nathalie.thomas@ft.com