Will the Green Deal live up to the hype?

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The Green Deal is no quick fix for the current ills of the construction industry, says Duncan King, technical officer at the Construction Products Association.

What is the Construction Products Association's view on the Green Deal as a whole?

We believe that the Green Deal and the Energy Company Obligation holds enormous potential to improve the energy performance of UK buildings, but there are some fundamental issues that still need to be addressed.

What challenges are facing the construction sector at the moment and will these Green Deal proposals be suitable to counteract these?

The Green Deal has nothing to do with new build so from that point of view the Green Deal will make no difference. The question is whether the scope of work envisaged for improvements to energy efficiency of existing buildings is sufficient to provide the stimulus for the repairs and maintenance sector to counteract the lack of new build? We believe that the Green Deal is a long term project and as such will take time to build up momentum. As such we don't see it as a quick fix for the current ills of the construction industry; although we do acknowledge that it has the potential to provide new work streams across the sector.

What messages are the Construction Products Association conveying to the government in the Green Deal consultation process?

The Green Deal will enable more people to access paid for energy efficiency measures, however, given that energy companies are already experiencing difficulties in persuading homeowners to take up energy efficiency measures which can be installed at no upfront cost, it is questionable if the Green Deal will be as successful as the government anticipates. It is essential that new companies and organisations be allowed into the market to undertake Green Deal work so as to avoid any one sector becoming dominant. The quality of the workmanship must also be very high to avoid a disaster in confidence by the consumer and that properly accredited materials are used. Extended warranties need to be included to give added protection to consumers, but can these be provided and still remain within the Golden Rule?

Some form of financial incentive will be necessary to help kick start the scheme and possibly the introduction of a longer term fiscal measures such as a stepped stamp duty reduction based on the combination of house value and its energy efficiency rating as measured by the EPC.

Does the Construction Products Association feel that the government is delivering so far on its commitment to ensure 'one man bands and local authorities' are suitably involved?

The Green Deal is so structured that local authorities and all sizes of business, including one-man bands, can be involved in the various aspects of the Green Deal scheme. The scheme has the potential to benefit the whole industry from product manufacturers, distributors, energy/building assessors and installers. This should bring greater competition and encourage diversity thus avoiding any one part of the supply chain enjoying a dominant position in energy efficiency work. Until such time as the Green Deal physically commences and has been running for a few months then it is not possible to gauge what involvement small businesses are committing to, nor how local authorities have engaged.

Are there any incentives that the Construction Products Association would like to see included and, if so, what are they?

The Association believes that targeted fiscal incentives such as our long held view of a reduction in VAT to five per cent both for Green Deal work and for equivalent energy efficiency work undertaken outside of the Green Deal will be needed. This will send the right signals to the consumer as well as making the Golden Rule more achievable.

To kick start the Green Deal an option exists to introduce cash back incentives for homeowners. The government has suggested a cash back of £150. Alternatives could be based on the degree of improvement in the energy efficiency rating of a building as recorded by the Energy Performance Certificate (EPC). In the longer term, government could base the level of stamp duty for the purchase of homes on both its price and EPC rating. Such a system has worked well for company car tax where both the vehicle price and its CO2 emissions set the level of tax charged to the individual. This has radically changed the choice individuals are making as to their company car. There is no reason why such a dual price and environmental performance based system could not have the same impact on home purchase, albeit over a longer period.

Does the Construction Products Association consider the prediction of the creation of 65,000 insulation and construction jobs by 2015 to be a realistic one?

This is difficult to gauge at the current time. Potential certainly exists for increased job creation, but to what degree is any bodies guess. We believe that 65,000 new jobs by 2015 to be optimistic as these figures are based on the government estimates of spending £14 billion over the next 10 years. The creation of new jobs will depend solely on the rate the British public takes up Green Deal measures.

There must be further work carried out on a transition process between the existing Carbon Emission Reduction Target (CERT) scheme and Energy Company Obligation (ECO). As things stand, there will be a catastrophic collapse in cavity wall and loft insulation work at the end of this year when the CERT scheme finishes. It is essential that the new ECO arrangements provide for a short period of continued support for cavity wall and loft insulation, whilst the Green Deal becomes established.

The Green Deal and ECO also offer other sectors of the construction industry the potential for job creation but again this will depend on the rate of uptake of the scheme.

The government noted it is going to be introducing 'safeguards to help small family firms'. What form would the CPA like this to take?

As alluded to in an earlier question, the Green Deal is so structured to involve all sizes of business. We see many small firms sub-contracting to larger companies but under a far more stringent contract than would normally exist. This would cover such requirements as having to demonstrate that they employ appropriately trained staff to undertake the actual work on site. We do not see this happening immediately when the Green Deal commences, but as momentum builds up, and more work comes on stream, these small family firms should benefit.

The Department for Energy and Climate Change (DECC) has announced that it will be introducing 'strict standards to prevent consumers being ripped off by cowboys'. Will the Construction Products Association be working with government to ensure these are appropriate for their goals?

We shall certainly make our support know to government about the need to protect the consumer from such undesirable elements. For the Green Deal to be successful, it is paramount that it establishes credibility with the consumer. To tackle this element, government does require that those undertaking the actual site work be adequately trained and hold appropriate qualifications. They are currently talking with training providers about this matter.

We believe that strong representation to government on such matters should come from the various organisations representing the respective trades involved and we fulfil this role on behalf of the construction products industry.

The Association did appoint several industry consultants who have, for the past year, been working closely with DECC in developing various aspects of the Green Deal scheme.