The UK government will now be unable to insulate as many homes as planned after it scaled back the massive boost to its flagship program to help some of the country’s poorest households curb their energy consumption. There were plans to double the £1 billion in funding in the so-called Energy Company Obligation following Boris Johnson’s resignation as prime minister. But that has now been deleted, according to acquaintances of the case, Bloomberg reports.
Another insider claimed there is an additional £30million of existing funds that has gone unspent and will now be lost.
Initially, the plan was to double the £1bn fourth round of funding to help households in the weeks leading up to the frigid winter months.
But a British government spokesman confirmed that the plan will go ahead without the additional planned funding.
The spokesperson said: “Thanks to government support, the number of homes with an energy efficiency class of C or higher is at 46 percent, rising from just 13 percent in 2010.”
A person familiar with the situation claimed that there is also about £30 million left over from public funds in the past financial year to help local authorities across the country increase energy efficiency.
The Department for Business, Energy and Industrial Strategy and the Treasury were engaged in talks over how to divert the remaining funds, but those discussions have reportedly collapsed due to the ongoing Tory leadership contest.
However, a decision on this cannot be made until a new leader – either former Chancellor Rishi Sunak or the current Foreign Minister – has been elected in early September.
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This latest blow also comes to millions of households who will see their annual bills rise by £3,420 in October as the energy price cap rises again.
The insider said Brexit and the resulting supply chain problems have prevented the government from fully spending the money from its Social Housing Decarbonization Fund and Home Upgrade Grant.
The costs associated with product certification have risen since the UK’s departure from the European Union, as the paperwork on imports piles up.
In addition, in recent years there has been a major shortage of materials due to the Covid pandemic and the Russian war in Ukraine, while costs have risen faster than inflation, according to one source.
The uncertainty surrounding UK leadership and the ongoing battle for Tory leadership has also had a further impact on the new policy, with no major changes expected in the coming weeks.
Improved insulation in UK homes is a key driver in reducing demand and tackling climate change by reducing dependence on fossil fuels.
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