The government has confirmed it is to launch a replacement scheme for the Energy Company Obligation in April 2017 but fears are growing over what appears to be a 40% reduction to its budget.
The government has committed to launching a new Energy Company Obligation (ECO) scheme in April 2017. The scheme will run for five years and has been labelled a “new cheaper domestic energy efficiency supplier obligation” in the autumn statement documents.
It will upgrade the energy efficiency of more than 200,000 homes a year, “tackling the root cause of fuel poverty and delivering on the government’s commitment to help 1 million more homes”.
However buried in the autumn statement document is the programme’s costings, valued at £640 million per year rising with inflation. ECO currently spends approximately £1.1 billion per year on energy efficiency upgrades, meaning that expenditure will actually fall by around 40%.
The figure is also well below the £1.2 billion per year right-leaning think-tank Policy Exchange has suggested is required for the government to meets its fuel poverty targets.
The cut comes despite increased warnings over a lack of energy efficiency measures being installed and less than a week after elderly charity AgeUK called on the government for urgent action.
“One of the ways George Osborne said he intends to cut fuel bills is by slashing the energy efficiency fund,” Greenpeace policy director Doug Parr, said.
“This is nonsensical as this fund actually helps people to cut their bills and keep warm by draft proofing and insulating their homes. Cutting the fund simply means fewer homes will be kept warm. The number of people dying from cold in their homes is rising and this short-termist approach to that horrible fact will do nothing to help that.”