Rural communities need a dedicated energy grant

When the UK Government announced recently that it was ending its much-vaunted £2bn Green Homes Grant scheme with just 10% of funds actually distributed, rural communities felt let down, as the government once again overpromised and under-delivered on infrastructure investment. 

Homes in rural areas face particular challenges, so the scheme - designed to contribute towards the cost of installing energy-efficient improvements in people’s homes - provided the opportunity to reduce their bills and minimise their environmental impact. 

The only significant action to date on the government’s vow to “build back greener”, the grants of up to £5000 should have represented the start of a process that created real change. Instead, the scheme was hamstrung from the beginning and failed to deliver even on its limited scope, being shelved after six months with thousands of applications for funds left unfulfilled. 

The Green Homes Grant Scheme failed to make an impact for two key reasons. First, red tape. Builders complained of having to jump through hoops just to become accredited to carry out Green Homes Grant projects. This was a particular problem in rural settings where these firms are typically smaller and often do not have the scale and financial cushion of bigger urban businesses to gain accreditation. Lack of certification led to a massive backlog of applications, meaning that even if people wanted to join the scheme, they would have to wait months. The second issue was time. With the scheme set up for an initial six months with a one-off payment of up to £5000, against the backdrop of Covid controls and uncertainty, few homeowners or construction companies thought it was worth taking on the huge financial and time commitment rural home improvements require in exchange for this limited government support.

By proposing that all privately rented homes may need to reach an Energy Performance Certificate (EPC) rating of C by 2028, this government has failed to consider the differences between urban and rural housing. EPC ratings are a different beast when it comes to rural homes, many of which were built hundreds of years ago and rarely have access to mains gas. One CLA member spent some £40,000 to improve a home’s energy efficiency, only to reach a band E rating, which is the current legal requirement.

The consequences of pulling the rug out from underneath rural property owners will be severe and far-reaching. For many rural landlords, it means being forced to sell off property, as they will not be able to recoup the huge expense that bringing their property into line with regulation will entail through rent increases. For many homeowners, it’s a missed opportunity to make a difference to their carbon footprint and reduce their heating bills.

Ultimately, this will see a decline in the rural private rented housing supply and will push out of the countryside people who are the backbone of the rural economy and are an important part of the social fabric in rural areas.

The failure of the scheme in its current form also slows progress on climate mitigation. More than 800,000 rural homes are heated by oil and will need to transition to cleaner sources of power in coming years, such as heat pumps. But the Energy Saving Trust estimates that it costs £19,000 to install one pump, with the annual bill saving of using the technology just £20 a year. If the government do not help bring about a green transition for rural communities – which so often are first to suffer the impacts of climate change in this country – then we risk it never happening at all.

We need a new Green Homes Grant made available without delay. Significant improvements should be made to its scope and the help available. The amount available from the failed scheme was £5,000. Taking into the account the huge extra costs with upgrading rural homes, this should be doubled to £10,000 for rural properties. Some £2bn was initially promised from the scheme, with £1.5bn part of the Green Homes Grant voucher scheme and the remaining £500k for the local authority delivery scheme. We believe this amount needs to be doubled, and spread out over five years, giving builders and homeowners the confidence to take part in a scheme that could revolutionise Britain’s homes.

The idea of a grant to directly support “building back greener’” is a fine one. But the government’s willingness to throw in the towel after six months raises more questions than answers. A new, reformed scheme, properly thought through and adapted to serve the whole country, is required if the government is serious about embarking on a journey to net zero carbon emissions.

• This appeared first in Conservative Home. Read it here