Ed Davey: little comfort
Climate Change Minister Ed Davey offered little comfort to SMEs wanting to engage with the Green Deal when he admitted at this week’s Liberal Democrat conference that opportunities in the impending Green Deal, due for soft launch next week (1 October 1), could initially be dominated by the existing “big players”.
Speaking at a conference fringe meeting organised by Dods’ Green Dialogue, made up of Land Securities, the Glass and Glazing Federation and Velux, Davey also reportedly admitted the scheme could carry potential problems for small companies.
The legal framework for the Green Deal will be in place from 1 October, but households will not be able to get work until after 28 January when the finance mechanism to enable them to pay for the Green Deal through their energy bills is in place.
Davey’s comments underline concerns still being voiced by SME trade bodies and institutions, which are yet to be convinced that the government has thought through the Green Deal from the installer perspective. Last week the Glass and Glazing Federation voiced concern that cash flow problems could cripple installers.
Paul Bogle, head of policy at the National Federation of Builders, stated that the Green Deal was still weighted too far in favour of the householder.
”There is plenty of advice out there covering consumer guarantees and Ombudsmen, warranties for works, a complaints service and the Consumer Credit Act to reassure consumers, but little by way of guarantees for the installers,” said Bogle. “There has to be more of a balance. If there’s to be take-up by construction SMEs, there has to be more concessions for them.”
He added that firms with no real expertise in finance are having to consider being Green Deal providers, and that payment guarantees for works completed prior to final sign-off needed to be clearer to give SMEs more confidence in the framework. “Things could be helped by introducing ‘pay on completion’ orders or staged payments that would reduce exposure of smaller firms to the risks associated with bad cash flow,” he said. “It does make things more complex, but you’ll need that at least to inspire contractor confidence,” he added.
Parity Projects, a firm that set up the Green Deal Conduit, a collective addressing the interests of locally-based SMEs, is not surprised by Davey’s announcement, and remains generally sceptical. “If you’re sensing a black hole regarding the nature of the payment structures with the Green Deal, that’s because there is one,” said commercial director Chris Newman. “It’s still not clear how SME’s will function within it and nothing in place to aid SME’s involvement. No seed funding has been allocated as far as I’m aware- it’s always seemed aimed towards the bigger players.”
In another development, the consultation for the introduction of the Renewal Heat Incentive for domestic installation – the tarriff scheme to encourage consumers to installation equipment such as solar thermal and biomass boilers – was unveiled this week. The consultation proposed that the households would not be eligible for the tariff – unless they had carried out a green deal assessment and undertaken works that meet the golden rule.
Consequential improvements
Meanwhile, Davey told Building magazine,that controversial proposals to require householders to undertake energy efficiency work on their homes when carrying out extensions or other home improvements – seen as a key driver of the Green Deal – could yet be introduced by the government in a scaled back form.
The proposals, known as consequential improvements, involved changes to Part L of the Building Regulations and would have introduced a requirement on home owners to make improvements to the energy efficiency of their homes when carrying out other work. But the plans were dubbed a “conservatory tax” by parts of the media and were seemingly quashed by Number 10.
However, speaking to Building at the Liberal Democrat conference this week, Ed Davey said the consequential improvement proposal “had merit”. He said the Liberal Democrat communities minister Don Foster, who replaced Andrew Stunell in the government reshuffle this month, was preparing the government’s response to the consultation.
