A report by the National Audit Office (NAO) has concluded the Green Deal initiative by the Department of Energy and Climate Change (DECC) has 'not achieved value for money'.

No additional energy savings have been generated by the scheme which, including grants to stimulate demand, cost taxpayers £240 million.

The 'Green Deal and Energy Company Obligation' report concluded DECC's lack of design and implementation did not persuade householders that energy efficiency measures are worth paying for.

In addition, the NAO said the departments Energy Company Obligation (ECO) scheme to support the Green Deal added to suppliers' costs of meeting obligations, therefore reducing value for money of ECO.

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However, while DECC achieved its target to improve 1 million homes with the schemes, this is not a direct indicator of progress against the objective of reducing carbon dioxide (CO2) emissions due to different types of energy-efficiency measures saving different amounts of CO2.

Overall demand for Green Deal finance has fallen well below government expectations, with households only funding 1% of the measures installed.

Amyas Morse, Head of the NAO, said improving the energy efficiency of households is "central to government achieving its aims of providing taxpayers with secure, affordable and sustainable energy".

"The Department of Energy and Climate Change's ambitious aim to encourage households to pay for measures looked good on paper, as it would have reduced the financial burden of improvements on all energy consumers," he said.

"But in practice, its Green Deal design not only failed to deliver any meaningful benefit, it increased suppliers' costs – and therefore energy bills – in meeting their obligations through the ECO scheme.

"The Department now needs to be more realistic about consumers' and suppliers’ motivations when designing schemes in future to ensure it achieves its aims."

To view the full report, visit here.

(LM)