Green Homes Grant cut will be “a wrecking ball” to jobs, says TUC

• New analysis estimates that of the 100,000 new jobs the government promised through the scheme, just 14,500 have been created to date
• The union body says that more than 8,000 of those jobs could be lost because of a government funding cut of more than £1bn
• The TUC is calling for government to reverse its plan to cut the programme in a time of rising unemployment, and deliver a green jobs drive in the Budget

The TUC has today (Monday) warned that the withdrawal of hundreds of millions of pounds from the Green Homes Grant scheme will be “a wrecking ball” to green jobs.

The warning comes as the union body releases new analysis which shows that if these cuts are implemented, the government will overwhelmingly fail to deliver the promised 100,000 new jobs, and over half of those who have found employment through the scheme could be laid off.

The analysis reveals just 14,500 jobs have been created to date, and the TUC estimates that in 2021-2022, 8,500 jobs will be lost, with only 6,000 remaining.

The Green Homes Grant, which provides funding for retrofitting homes to make them more environmentally-friendly, was announced by the chancellor in his ‘Plan for Jobs’ speech in July 2020.

This was the government’s flagship policy to "build back better" and create green jobs in the face of rising unemployment. The grants were since promoted by the prime minister as a key plank in his ten point plan for a green recovery.

Recently however, the government has quietly set out plans to cut more than £1bn of funding from its flagship green initiative.

The move has caused consternation among business, environmental groups and unions – who have all raised concerns about the decision. The TUC says many businesses and workers had been relying on the scheme in good faith and will now be left out of pocket.

A proper green jobs drive

The union body is calling on the government to reverse the decision, fully fund the scheme and invest in a powerful green stimulus to create millions more decent jobs in the Budget on Wednesday.

The government’s Green Jobs Taskforce has promised to deliver 2 million jobs by 2030. But the TUC says the government must step up its ambition.

The TUC has set out plans to create 1.24 million good green jobs within the next two years. These jobs included retrofitting homes to make them more energy-efficient, as well as installing faster broadband, developing modern transport links and bringing forward new green technology.

In its retrofitting proposal, the TUC said 212,000 new jobs could be created and earmarked local authorities for delivery.

The Green Homes Grant has two components for delivery: a private voucher-based outsourced part and a local authority part. The private outsourced component has the lion’s share of responsibility for delivery.

The union body says instead of cutting Green Homes Grant funding, money should be redirected towards the existing local authority delivery process for private and social housing.

Local authorities delivered on £74 million of their £500 million scheme by November and are likely to use their full budget by March, demonstrating greater readiness to create jobs.

TUC General Secretary Frances O’Grady said:

“This funding cut will be a wrecking ball to green jobs.

“The Green Homes Grant was supposed to create jobs, not cost them. By pulling the funding, the government has shown it isn’t serious about ‘building back better’.

“A proper green jobs drive could stop mass unemployment, help power our economic recovery and tackle climate change.

“The chancellor must take the opportunity to reverse this damaging decision on Wednesday at the Budget. And he must drive our recovery forward with a powerful green stimulus that creates millions more good secure jobs.”

ENDS

Notes to editors:

Estimating actual job creation from the government’s Green Homes Grant scheme in 2020-2021

1. The government promised that its Green Homes Grant scheme would support 100,000 jobs in green construction for local plumbers, builders and tradespeople.
2. Government funding was £2 billion. £500 million for a Local Authority Delivery Scheme, and £1.5 billion for a voucher scheme. The vouchers only cover two thirds of the costs for most households. We therefore assumed that actual planned investment was 3/2 x £1.5 billion + £500 million = £2.75 billion
3. The Green Homes Grant programme opened for business on 30 September 2020, and was initially due to run until 31 March 2021 - 6 months.
4. Actual spending for the voucher-scheme was £94.1 million by 8 February 2021 (4.25 months in). We assume that more vouchers will be issued in the remaining 1.75 months before 31 March 2021, in proportion to time elapsed. As above, the vouchers only cover two thirds of the costs for most households. We therefore calculated likely total investment by 31 March 2021 as 3/2 x 94.1 million x 6 months / 4.25 months = £199.3 million.
5. £200 million was allocated to the Local Authority Delivery scheme of the Green Homes Grants in the 2020-2021 financial year. £74.3 million had been made available and fully allocated by November 2020, with a further round in December 2020. We assume that the full £200 million allocation will be spent by 31 March 2021.
6. This gives total Green Homes Grant investment in the 2020-2021 financial year as £199.3 million + £200 million = £399.3 million
7. Assuming that jobs created by actual investment are created in the same proportion to the government’s initial estimates (ie that the multiplier for jobs per £ million invested remains the same), then total Green Homes Grants jobs created in 2020-21 should be £399.3 million / £2.75 billion x 100,000 jobs = 14,519 jobs. (Actual investment / Planned investment x Planned jobs = Actual jobs).
8. Note that these jobs are only estimated to last for 6 months.
9. Broken down between the two components of the Green Homes Grant, this is 7,246 jobs created through the voucher scheme and 7,273 through the Local Authority Delivery scheme.

Estimating future job creation from the government’s Green Homes Grant scheme in 2021-2022

1. The Government has stated that total funding for the Green Homes Grant scheme in 2021-22 will be £320 million.
2. The Times has reported that the voucher-based component of the Green Homes Grant scheme will come to an end on 31 March 2021.
3. Phase 2 of the Local Authority Delivery component includes £300 million to be allocated through Local Energy Hubs. In February 2021, the government stated that regional delivery of Phase 2 is expected to begin in April 2021.
4. We therefore assumed that out of the £320 million allocated for 2021-22, £300 million is spent in line with the Local Authority Delivery component, and £20 million in line with the voucher system.
5. The vouchers only cover two thirds of the costs for most households. Therefore, total investment in 2021-2022 would be £300 million + 3/2 * £20 million = £330 million.
6. The initial 100,000 jobs promised by the government were only expected to last for 6 months (October 2020-March 2021). Jobs modelled for 2021-2022 can reasonably be expected to last for the year, as is standard in input-output job creation modelling. Therefore, the jobs created per £ million invested for 2021-2022 should be 50% of those used for 2020-2021.
7. Assuming that otherwise, jobs created by actual investment are created in the same proportion to the government’s initial estimates, then total Green Homes Grants jobs created in 2021-22 should be £330 million / £2.75 billion x 100,000 jobs x 0.5 = 6,000 jobs.

- Unite have called for a large Housing Retrofit programme, as part of their "Magnificent Seven" shovel ready projects.