The Green Deal cost taxpayers £17,000 per household

James Nickerson
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Energy Efficient Houses In High Demand
The government spent £240m on the Green Deal (Source: Getty)

The government's abandoned flagship energy-saving programme cost the taxpayer £17,000 per each home that was improved, a watchdog has said.

The National Audit Office (NAO) said that "the Green Deal has not achieved value for money".

The scheme cost the taxpayer £240m, including grants to stimulate demand, but has generated additional energy savings.

"This is because Department of Energy and Climate Change's (DECC) design and implementation did not persuade householders that energy efficiency measures are worth paying for," the NAO said.

After not enough people took up the government on its offer, it quietly announced in July that funding for the Green Deal had been cut. Just 14,000 households signed up, taking out loans worth £50m.

When the government launched the scheme last May, government minister Greg Barker said it would be the “biggest home improvement programme since the second world war".

The NAO also found that DECC’s design of its Energy Company Obligation (ECO) scheme to support the Green Deal added to energy suppliers’ costs of meeting their obligation, therefore putting household bills up.

Read more: Government to stop funding Green Deal due to low take up rates

"Improving household energy efficiency is central to government achieving its aims of providing taxpayers with secure, affordable and sustainable energy," said Amyas Morse, head of the NAO.

"The Department of Energy and Climate Change’s ambitious aim to encourage households to pay for measures looked good on paper, as it would have reduced the financial burden of improvements on all energy consumers.

"But in practice, its Green Deal design not only failed to deliver any meaningful benefit, it increased suppliers’ costs – and therefore energy bills – in meeting their obligations through the ECO scheme.

"The Department now needs to be more realistic about consumers’ and suppliers’ motivations when designing schemes in future to ensure it achieves its aims.”​

But a DECC spokesperson said: "This government is clear about the need to have firm financial controls in place to protect consumers, which is why we took action last July to address the issues in this report – stopping funding to the Green Deal Finance Company and setting up an independent review of the energy efficiency sector."

"We are now designing a new scheme that will help make even more homes warmer and bring people’s bills down."

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