ECO4 and Insulation Schemes
Tom Gordon Excerpts(1 week, 3 days ago)
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Miatta Fahnbulleh
My hon. Friend is right to highlight subcontracting within the system. Often we find that subcontracting is happening two or three times, and the starting client is not overseeing the work in the way that they should. That is why we are clear that we must look at the entire system, and part of that is looking at who is delivering the work, how they are delivering it, and how we ensure that there is proper accountability in the system. It is obvious to me that the current system does not allow for that accountability, and that is what puts consumers in a difficult position.
Tom Gordon (Harrogate and Knaresborough) (LD)
I am sure the Minister will recall our intimate Adjournment debate before the House rose for the Christmas recess—it was just her and me here. [Interruption.] Yes, and it was the day after our Christmas party, so it was an interesting debate.
I sincerely welcome the steps that the Minister has outlined for solid wall insulation. The problem I have is that, fundamentally, all these issues apply to spray foam insulation, as I said in my Adjournment debate. There are blanket bans by some mortgage providers: research by the BBC showed that one in three of the top 12 mortgage lenders have such policies. I am more than happy to send on that information again. There is a real issue of fairness and justice here. It is right that we are seeking to get this right for people done wrong by those who have not installed insulation to spec, but the same must be true for those who are victims of the spray foam insulation scandal, including my constituents Tom and Norma in Knaresborough.
The Minister has acknowledged in her statement that there are systemic issues, that TrustMark is not doing its work and that there are to be audits of solid wall insulation. However, when I asked whether there was an understanding of how many people had been impacted by spray foam insulation, I was told that there was not a number. How can it be that we are counting how much of one sort of insulation has been installed, but not another? Some 250,000 people have been affected by spray foam insulation. Will she give justice to them, too?
Miatta Fahnbulleh
I thank the hon. Member for all the work he has done on spray foam insulation and the campaigning he has done for his constituents. I fondly remember that Adjournment debate with just the two of us, and I vividly remember the stories he told of Tom and Norma. I reiterate the commitment to work together to try to resolve this.
The difference between spray foam insulation and work done under the ECO and GBIS schemes is that, because those are Government-backed schemes, we have the data. Large numbers of people have had spray foam installed, and some but not all of that work was done through the green homes grant.
We recognise that there is a problem with the system of quality assurance and regulation across the piece—we have acknowledged that very clearly in the House. We will continue to work with MHCLG and other colleagues to think about what we can do on spray foam. The priority, as the hon. Member will understand, is households who have had work done under ECO and GBIS that, if we do not fix it quickly, could result in damp and mould. We must act quickly on that. However, I acknowledge that there is an issue with households that had spray foam insulation done under the old system. As I said when we had the debate, we will continue work to think about ways in which we can resolve that for those households.
Spray Foam Insulation: Property Value
Tom Gordon Excerpts(1 month, 3 weeks ago)
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Tom Gordon (Harrogate and Knaresborough) (LD)
The green homes grant voucher scheme was introduced in July 2020 under the Department for Business, Energy and Industrial Strategy. The scheme was part of the Department’s green recovery from the pandemic and promised to contribute to the goal of net zero carbon emissions by 2050. Some £1.5 billion of funding was made available by the Chancellor of the Exchequer to offer homeowners the opportunity to reduce emissions and improve energy efficiency. Individual homeowners could apply for up to £5,000 of funding to cover two thirds of the cost of eligible energy efficiency measures.
Between September 2020 and March 2021, just short of 50,000 vouchers were paid to homeowners that could be used for a variety of improvements, including heat pumps, energy efficient windows and doors and, importantly, spray foam insulation. The exact number of vouchers given out for use on spray foam insulation is unknown. However, almost 14,000 vouchers were used for loft and pitched roof insulation measures which could have included spray foam.
Spray foam insulation is a form of liquid insulation applied with a spray gun, typically in roofs, lofts and attics. This is where the problem occurs. It has the potential to improve thermal efficiency if applied correctly. However, it can cause significant damage when it is not done correctly. Homeowners have reported problems in timber-framed roofs following installation. It restricts air circulation causing condensation that ultimately damages the property and has resulted in signs of decay and dampness in timber framed roofs.
Homeowners put faith in the Government’s recommendations and carried out this work with the promise of enhanced energy efficiency. Instead, they have been met with thousands of pounds of remedial works and difficulty in selling their properties. An unregulated trade of cowboy builders offering to carry out remedial work has also emerged. Homeowners are being convinced to spend thousands on improvements when they are not always necessary.
The Government need a cross-departmental strategy to address the issues arising from the green homes grant voucher scheme. We must see action to support affected homeowners with a compensation scheme, regulation of removal companies and steps to tackle the blanket ban that some mortgage providers have placed on homes with the insulation. There are important lessons to be learnt here to ensure future Government home improvement schemes do not have the same unintended consequences.
Spray foam insulation has the potential to cause such severe damage that many mortgage lenders have issued blanket refusals. BBC research demonstrated the varied approach mortgage lenders are taking on the issue. Of the 20 largest mortgage providers, seven have said that they refuse to lend on any properties with any form of spray foam insulation. The other 13 stated that extra information and surveys would likely be required and that mortgages would be offered only on a case-by-case basis. That is adding additional costs to people when they come to mortgage, remortgage or sell their home.
My constituent Tom described the utter devastation he felt when the sale of his house fell through after surveyors discovered spray foam insulation. It was only once the buyer informed Tom that they would not be able to get a mortgage approved on the property that he learned of the dangers of this type of insulation. Without the availability of grant money, Tom and his family would never have considered installing spray foam insulation. However, they wanted to do their bit for the environment through the green homes grant scheme.
There are lots of good people out there like Tom trying to make efforts to help reduce their carbon emissions and contribute to net zero, and they have fallen foul through no fault of their own. Tom applied for a voucher through a scheme that would cover two thirds of the cost of the upgrades and put in £1,000 of his own hard-earned money, too. After receiving a list of Government-approved installers, Tom and his family chose one that they believed met the standards to carry out the works.
After the sale of the house fell through, Tom began investigating potential remedial works to remove the foam and make his home suitable for mortgage. It soon became apparent that there were no affordable options. Tom has reported spending £4,000 on removal of the spray foam insulation, while another constituent, Norma, has been told that she will likely need to have all the roof timbers replaced due to the severity of the damage.
Earlier this year, the Health and Safety Executive published shocking data revealing that condensation could cause 25% of roof timber to decay within five years if spray foam was applied directly to roof tiles. However, the Insulation Manufacturers Association has warned that blanket bans on mortgages for homes with spray foam is leading to a new wave of rogue traders offering to remove foam for over-inflated prices, often causing greater damage in the process. It said that homeowners must not turn to cowboys for this removal service. When installed correctly by a regulated provider, spray foam is an effective form of insulation. It recommends that anyone with spray foam gets an independent assessment by a surveyor.
Prior to these conversations, the surveying industry had little knowledge of spray foam or how to adequately check its impact on roof timbers—that was what was leading to the blanket refusals. The Royal Institution of Chartered Surveyors, the Health and Safety Executive and insulation manufacturers have all worked to introduce protocols, which is a good first step to measure the impact of spray foam and ensure safe removal. It is imperative that we regulate rogue removal companies and stop them charging thousands of pounds to remove spray foam that could have been correctly installed.
Despite the previous Government having run and funded the scheme, they took a hands-off approach to the issue. We must not see the new Government follow that same approach. Instead, we need to see decisive action to support those facing the financial repercussions of the Conservatives’ lack of due diligence.
Several excuses have been used to justify the lack of action by successive Governments. Cowboy builders have been blamed for applying foam without the necessary expertise of proper surveys. While that has certainly contributed to the damage, that cannot act as a “get out of jail free” card for the previous Conservative Government.
There have been attempts to shift blame to the homeowner for using an installer that did not meet standards. In June 2022, when pressed on the possibility of redress for impacted homeowners, the Government argued that it was the responsibility of the installer and homeowner to decide whether to proceed with using spray foam insulation. However, all works using vouchers had to be done by a TrustMark-registered installer. TrustMark is a Government-endorsed quality scheme for tradespeople. The then Minister, Greg Hands, argued that the Government were not responsible for remedying the impacts of a scheme as TrustMark had
“a robust framework of operating requirements, including dispute management.”
Recipients of green grant vouchers were provided with a list of recommended installers to choose from, and my constituent Tom provided a copy of that TrustMark certification of lodgement that he received following the installation of the foam. TrustMark’s slogan is “Government-endorsed quality”. in this case, it is somewhat ironically branded.
While previous Governments have tried to wash their hands of responsibility for the disastrous impacts of the scheme, their involvement is well documented. TrustMark continues to operate as the only Government-endorsed quality scheme for home improvements. Understandably, homeowners trusted the recommendations and installers that the Government had endorsed. It was the responsibility of the Government and TrustMark to ensure that those installers were capable of carrying out the works to the necessary standard.
The Royal Institute of Chartered Surveyors has previously raised concerns with the Government about the lack of impartial advice under the scheme. Retrofit advisers were often the same as installers and salespeople. If the Government continue using TrustMark to regulate contractors, greater due diligence is required to ensure that those contractors are endorsed and have all the necessary knowledge, experience and training to carry out work to the highest standards.
So far, the Government have not taken action to understand the breadth of the impact of spray foam on recipients of green homes grant vouchers. I tabled a number of questions that the Minister kindly responded to yesterday in advance of this debate. We do not yet know the true number of people who might be impacted, but it is estimated to be in the tens of thousands, if not more. There is currently no clear data to ascertain how many homes have been impacted, which is why the Government need to investigate this fully.
Those who put their faith in the Government’s recommendations deserve their fullest attention to remedy the repercussions. The Government should take some responsibility for the negative implications of using the endorsed installers and methods. So far, that is not happened. They have recommended that consumers seek redress under the Consumer Protection from Unfair Trading Regulations 2008. However, a number of these installers have since gone bankrupt, making it incredibly difficult to claim against them. Consumers are therefore having to cover the cost of removal and repairs themselves. The Government have attempted to rid themselves of responsibility by arguing that the availability of terms of mortgages were an issue for lenders. Multiple issues are at play, including difficulties with TrustMark’s dispute management system. Also, many of those installers no longer exist, and companies have closed, as has the green homes grant scheme.
There are growing calls for compensation for those who have been impacted by spray foam insulation to cover not just the cost of large remedial works but their contributions to the initial works. The green homes grant voucher scheme only covered two thirds of costs in most cases. There needs to be proper support for people who had spray foam installed. My constituent Tom is very lucky that he had family support while they moved, and they had the opportunity to move out for remedial works to take place. Nevertheless, he remains £4,000 out of pocket.
We cannot ignore the issues caused by spray foam insulation. Potentially, 300,000 homes have spray foam insulation, and we need support to ensure these homes are sellable. The Government must step in and ensure that mortgage providers are not unnecessarily withholding mortgages. We must also limit the unregulated trade of foam removal companies preying on vulnerable households and causing further damage at hugely inflated prices. I have already attempted to address that with the Department. It is evident that cross-governmental issues are at play. Where there has been legitimate damage to properties from people who have used green homes grant money, the Government must step in and take action. Lessons need to be learned for future Government schemes, too.
Is important not to be alarmist. People should not remove spray foam until they have had it checked by a reputable surveyor with the necessary training and experience to deal with this issue. It is understandable that mortgage providers have to lend responsibly, but blanket bans contribute to mass panic and fuel the business of cowboy builders. We must make sure that mortgage providers are properly regulated, too. This is a nationwide issue—although the numbers are still unknown, people have reached out from across the country as this issue has come to the surface recently. I have had conversations with a number of colleagues across parties. My hon. Friends the Members for Oxford West and Abingdon (Layla Moran) and for Stratford-on-Avon (Manuela Perteghella) are working hard to get support for their constituents who have been affected.
It is key that people put their faith in the Government’s recommendation. These were good people who wanted to work hard towards the goal of net zero and save a little money along the way. They should not be left thousands of pounds out of pocket because of it. It is crucial that we not only provide them with the necessary support, but look to the future to make sure that we prevent this happening again with any other schemes.
I do not deny that the green homes grant scheme was well intentioned. Such schemes are crucial, and I do not want to diminish faith in future schemes. However, we need to rectify the schemes of the past. If not, people will not trust the schemes of the future. I also appreciate that this is not an issue of the current Minister but one of the many legacies of the previous Conservative Government and the disaster that ensued. I would welcome meeting and working with the Minister responsible for repair and regulation, and to ensure that this does not happen again. I appreciate the time that the Minister has already given to this issue in advance of today’s debate, and I hope that she will continue to work with me to address this issue.
Oral Answers to Questions
Tom Gordon Excerpts(2 months, 3 weeks ago)
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Miatta Fahnbulleh
We will ensure that we see upgrades in every part of the country; we will be working with combined authorities, local government and the devolved Administrations to make sure that we are delivering the scale of upgrades needed across the country.
Tom Gordon (Harrogate and Knaresborough) (LD)
In the light of the warm homes plan, is the Minister aware of challenges faced by homeowners who used the green homes grant for spray foam insulation? Many now find their homes unmortgageable, and face significant costs for removal and repair. Will the Minister consider measures to support such homeowners as part of the warm homes plan?
Miatta Fahnbulleh
I am aware that many households have had upgrades that have not gone to plan. It is critical that we build confidence, because in the end we need to persuade consumers up and down the country to have these upgrades. There were schemes under the last Administration that were not regulated and did not have the correct standards, and we are working hard to make sure that we raise standards across the piece.
Oral Answers to Questions
Tom Gordon Excerpts(3 months, 3 weeks ago)
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Sarah Jones
I thank my hon. Friend for his question. After 14 years of failure and inaction, we now have a Government who believe in working with our trade unions, who have the backing of our trade unions, and who want to work to create good jobs in the industries of the future. Our announcement on carbon capture, which was groundbreaking and world beating, will deliver just that.
Tom Gordon (Harrogate and Knaresborough) (LD)
The Institution of Civil Engineers has called for a spatial energy plan to utilise new and emerging technologies to facilitate future net zero infrastructure planning. Will the Government look to bring forward a spatial energy plan and meet me to discuss that?
Ed Miliband
Yes, we will be bringing forward a spatial energy plan. That is one of the responsibilities of the National Energy System Operator. The hon. Gentleman makes an important point: we need a plan for the system. We can have a plan for the 2030 system done by the NESO and, indeed, a wider strategic spatial energy plan, which will be crucial for the country.