ECO4 Funding

The Continuing Issues with ECO Funding

HouseWrapped have been in the ECO industry long enough to spot things that continually cause issues when it comes to funding. Time and time again we find from our own indirect funders that ABS values have been lowered or that funding for certain property types or measures have been lowered!

For example : Late last year we completed a project for social housing installing high heat retention electric storage heaters to 12 properties fully funded. In January this year same funder has advised us that a very similar project (storage heaters for social housing) will only attract 20-30% of the costs for the exact same property types!

So, it’s obvious that in this instance the funder has decided that they have reached their target for certain house types, measures or as whole for example. Obviously there is nothing wrong with them doing this, after all they are only obligated to fund a certain amount each year. However, the problem then arises for installers on the ground who have geared up their workforce based on funding levels initially contracted to.

Imagine now an installer being told you will be receiving 30% or more less per job! What a nightmare then having to potentially lay off staff, reduce your fleet or even just stop trading. This is not a dramatic statement, in fact we have seen this happen so many times under every ECO scheme from ECO2!

Then imagine your funder suddenly saying your ABS rates have gone back to the initial higher rate. Good news, but then you have to re-hire staff and once again gear your company up to how it was before, all with that uncertainty of potential lower ABS values being introduced again at some point.

This all leads to potential massive inconsistencies with standards of work, imagine having the same installer installing the same measure for a few years, they obviously will get to know their work very well, be able to spot any issues and fully understand the level of workmanship required from the scheme... practice makes perfect. Then imagine having several different installers doing the same job over the same time period, they just won't have gained the prolonged experience to become considered an expert.

Thoughts from some of our other ECO friends

Firstly, the instability in funding can lead to significant delays in project implementation. Given the ECO4 scheme's goal to support energy-saving measures, any discontinuation or unpredictability in funding could result in postponed installations, ultimately affecting the end beneficiaries who are eligible for such funding. Inconsistent fund support can also complicate relationships between funding entities, installation companies, and beneficiaries. This situation may manifest in elongated timelines for project completion or in some cases, projects being left incomplete if the funding is suddenly withdrawn.

Moreover, the cessation and recommencement of funding can also lead to confusion and a lack of confidence among stakeholders. Beneficiaries who are informed they are eligible for energy-saving measures under ECO4, referred by councils or energy-saving charities to installation companies, could face frustration and scepticism if anticipated funding does not materialize as expected. This can undermine trust in the ECO4 scheme and in the entities involved, potentially discouraging participation or engagement with future or ongoing energy efficiency opportunities.

On the operational side, funding instability can strain the planning and resource allocation efforts of installation companies and other stakeholders responsible for executing the ECO4 objectives. Companies may find it challenging to manage staffing, scheduling, and resource procurement without certainty in funding. This can affect their efficiency and capacity to deliver on the scheme's commitments and could also impact the overall effectiveness and reputation of the scheme.

To address these issues and enhance the stability and reliability of the funding process, it could be beneficial for funding entities to establish clearer communication channels, more predictable funding schedules, and contingency measures for maintaining project progression despite fiscal adjustments. These steps could help mitigate the adverse effects of funding volatility on ECO4's objectives and stakeholders.