Green deal consultation: SMEs Face Green Deal squeeze

Brian Berry, FMB Director of External Affairs laments the lack of opportunity for small firms

The long awaited Green Deal consultation paper has finally arrived but small and medium sized enterprise (SME) contractors will have reason to be concerned that the Green Deal might not be the golden opportunity for new retrofit work. The Government is proposing that the Green Deal contract will be between the Green Deal Provider and the householder so unless a SME contactor is either willing to become a Green Deal Provider or subcontract to a Green Deal Provider they will effectively be excluded from the Green Deal. The problem is that smaller firms often do have the same access to capital market funding as large firms, due to lacking the same funding trading record or back-office capabilities, and will therefore be unable to become a Green Deal Provider.

This is a great shame as the Green Deal offers an enormous opportunity to transform the nation’s building stock to make it greener and more energy efficient. It also has the potential to generate thousands of new jobs in the building industry although it is interesting to note that the 65,000 figure now being quoted is lower than the 100,000 figure mentioned before the consultation!  The Government has said it recognises that SME builders are in direct contact with householders and therefore well placed to advise householders on specific works that might be appropriate under the Green Deal but doesn’t explain how they will obtain Green Deal money other than tying themselves to major companies who have set themselves up as Green Deal Providers. There is therefore a very real danger that the large energy and utility companies will simply hoover up the Green Deal market and squeeze out local builders which is very bad news not only for the building industry and local economies but also for customer choice.