MP Duncan Hames, Liberal Democrat member for Chippenham (centre), paid a visit to Buildbase, courtesy of the BMF.
BMF fights for merchants’ slice of Green Deal (3/4)
Published: 29 September, 2011
Mobilising merchant members
To break the proposals down into something that merchants can get a handle on, BMF secretary Peter Matthews convened a meeting in May to explore likely options and consequences. Managers from the 25 largest merchant members came to hear the news direct from the DECC civil servants responsible for the thinking behind the Green Deal. Unimer and NMBS were both represented at the meeting.
The view of contributors was clear: merchants must mobilise to provide an alternative to energy suppliers and the major high street retailers. BMF members must unite to prevent (or at least, minimise or mitigate) vertically-integrated businesses from further invading merchant markets.
Speaking to Builders’ Merchants News, Mr Matthews said the mood was unequivocal. “We cannot face the consequences of allowing the proposals to go unchallenged. A merchant-led response is imperative if we want some sort of antidote to the continuing threat from the usual suspects, the energy suppliers and DIY sheds.”
A small team has been formed to shape an industry response ahead of BMF Members’ Day on 20 September. The discussion will be the potential for merchants, and/or the BMF, to become authorised provider(s) to ensure merchant-controlled firms grab a share of this market.
Visits by MPs
To coincide with the Bill going through Parliament, BMF staff are orchestrating more visits by MPs to merchants.
Several trips were successfully completed this year, with more planned over the summer as MPs return to their constituencies (see www.buildersmerchantsnews.co.uk for regular updates).
Policy manager Brett Amphlett, used visits to support his work in
putting the case in Westminster and Whitehall. BMF members who host such visits say it gives them a chance to bend the ear of their MP to explain why merchants must be allowed to participate on fair and equal terms.
What are the key issues?
The assessment: The Green Deal succeeds or fails on the physical assessment being done correctly. Not only the Golden Rule calculation, but also the estimates given for (a) likely Energy Bill savings and (b) likely period over which the improvements will generate those savings. This means the assessment criteria must be based on an
approved and widely-available common standard. The rumour is it will be the Building Research Establishment’s SAP software. The BMF believes un-resolved questions remain, such as:
- Will assessors be allowed to charge for an assessment and allow voters to take it elsewhere (as opticians do with prescriptions for spectacles)---?
- Will the assessment simply recommend what work ought to be done or guide voters towards trustworthy, skilled and proficient contractors to carry out the work?
- How wide will the difference be between savings and costs for the Golden Rule to be met?
Independence of assessors: the Green Deal relies on the initial assessment being conducted properly. The BMF’s main concern is the independence of advisors/assessors who may be tempted to recommend certain action(s) but fail to disclose they benefit in some way, eg they are retained by a vested interest.
Voters must be assured, from the start, that the advice they receive is independent and the best that applies at that time for their property. There can be no suspicion that assessors (for whatever reason) give biased or sub-standard advice to favour a particular business, product or solution.
BMF organised a visit for Dawn Primarolo MP, Labour member for Bristol South, to visit Kellaway Building Supplies.
If the Government does allow vertically-integrated businesses to control independent assessors, Mr Matthews contends any legislation must compel full disclosure. Otherwise, potential customers will not know the assessor may be incentivised to make a sale when making an assessment. Without disclosure, the assessor might recommend actions that are not the best available for that property.
Marketing offers: Ministers are keen to draw a distinction between the assessment, and the cost(s) of the options recommended in the assessment. Brett Amphlett believes DECC is over-complicating it. For example, the assessment may include recommendations about micro-generation and/or renewable heating. Yet, the Green Deal finance offer does not extend to them.
In its evidence to Parliament, BMF staff urged ministers to consider establishing some sort of government-supported price comparison website – similar to those for insurance on television. Such a website would help overcome suspicion in the minds of voters as to solutions and prices recommended. Before signing, voters can surf the internet to compare marketing offers received.
Smart meters: The Government wants energy suppliers to fit smart meters in every home by 2020. As Mr Matthews points out, this gives them an unrivalled opportunity to use visits to cross- or upsell to voters that no other Green Deal provider has. He does not want to see fitting meters used as cover to carry out unwelcome selling. MPs were urged to ask what protection ministers plan to prevent energy suppliers using visits to bounce voters into signing papers on the doorstep.
Sales commission: In its evidence, the BMF warned Parliament about sales commission. It argues that those who earn a living from assessments will be eager to complete as many possible (especially if self-employed). It is fair to assume their income is modelled on a basic rate plus commission, causing advisors to make up salaries by chasing sales.
Earlier this year, Scottish & Southern Energy was questioned about this by the Commons’ Energy & Climate Change Committee. SSE admitted some of its doorstep salesmen received 40-50% of their wages in the form of sales commission. This illustrates the scope for Green Deal mis-selling.
Consumer protection: Ministers are acutely aware of the need to ensure voters are protected. In June, they published a paper describing the provisions they want to put in secondary legislation later this year. Providers will be responsible for looking after their customers throughout the lifetime of the Green Deal. The Framework Regulations will contain safeguards if things go wrong at various stages. DECC has already announced it will set up a telephone advice line to provide impartial information and advice to assessors, providers, installers and customers about handling complaints and redress.
DECC has tasked the British Standards Institute to develop a Publically Available Specification for installers.
It will based on current standards (where they exist) and bring in new ones, as necessary. Installers must be authorised and they will have to comply with a new Code of Practice.
The UK Accreditation Service has been appointed to accredit certification bodies to ensure they meet the necessary requirements. They, in turn, will be required to ensure their own members meet the standards, and must check installers are complying.
The new Code of Practice will require providers to give a single guarantee for all installed measures throughout the entire repayment period. DECC is also considering making Green Deal providers contribute to an insurance scheme for customers if a provider goes out of business. The model being looked at is similar to that operated by the ABTA for holidaymakers.