Business groups are urging the chancellor, Rishi Sunak, to keep funding home insulation and other low-carbon measures under the green homes grant, which is under threat from cuts. They warned that moves to reduce the amount of money paid out under the scheme, or abandon it altogether, would make it harder to reach the government’s target of net zero emissions by 2050, and damage the UK’s credibility as host nation of this year’s Cop26 UN climate summit and president of the G7 group of rich nations. “Only a long-term programme can provide the economic, social and environmental benefits associated with a focus on green homes, support the government’s important levelling-up agenda, and make real progress towards achieving the net zero target,” wrote the 25 organisations, in a letter to Sunak seen by the Guardian. “The UK has made commitments to a green recovery, and risks undermining its credibility on the global stage at the Cop26 and G7 summits if it allows its keystone green stimulus measure to fail.” More than 25 organisations, including the CBI employers’ association, Energy UK which represents energy suppliers, and the Royal Institute of British Architects, signed the letter organised by the Energy Efficiency Infrastructure Group. They said an effective home efficiency programme would support nearly 200,000 jobs by 2030, and the resulting cost savings to households would amount to £7.5bn a year. The £1.5bn green homes grant was the flagship policy unveiled last year as part of the government’s pledge to “build back better” after the coronavirus crisis. Under the scheme, homeowners receive subsidies covering up to two-thirds of the cost of new insulation, heat pumps or other low-carbon improvements. More than 100,000 people have applied for the grants since the launch last September. After a series of administrative disasters, however, more than £1bn of the money allocated to the scheme remains unspent, despite the high demand. Homeowners have faced difficulties getting approvals and the vouchers needed for payment, while builders have been put off by the burden of red tape. New data released last week showed that more than 103,000 homeowners made applications under the scheme, but only one in five had received vouchers, and only 2,777 home improvements had been fitted. Earlier this month, in a response to a parliamentary question by Labour, the business minister Anne-Marie Trevelyan said the unspent money would be withdrawn. The chancellor has allocated £320m for the scheme for the financial year from April, but this is a small amount compared with the more than £1bn unspent money for this year. Campaigners and an influential committee of MPs have said the unspent money should be made available beyond the end of March. A government spokesperson said: “The green homes grant voucher scheme was designed to provide a short-term economic stimulus while tackling our contribution to climate change. However, the prevalence of Covid-19 since the scheme’s launch in September last year has led to an understandable reluctance on the part of the public to welcome tradespeople into their homes.” However, with demand running many times higher than the number of vouchers issued, experts are unconvinced by the government’s claim that householder reluctance is to blame for the scheme’s failure so far. Ed Matthew, campaigns director at the climate change thinktank E3G, said: “It is simply not true to suggest there is low demand for the green homes grant. The scheme is struggling because it has been poorly administered. It needs to be urgently reformed, not axed. This investment is crucial for kickstarting a green recovery.” Industry experts are particularly concerned that builders and other tradespeople need to have confidence in a long-term government strategy, to invest in the skills and training needed to have a thriving home insulation and low-carbon heating industry in the UK. Previous home insulation subsidy schemes, such as the coalition government’s Green Deal, were also scrapped. Emma Pinchbeck, chief executive of Energy UK, warned: “A return to a stop-start approach puts [green jobs] in jeopardy and risks repeating the mistakes made in recent years.” Sarah Kostense-Winterton, chair of the Energy Efficiency Infrastructure Group, a coalition of businesses and NGOs, said: “The green homes grant has clearly landed with consumers, and is within a cat’s whisker of delivering at scale. Execution and delivery issues are being smoothed out to ensure the success of this much-needed boost for skills, jobs and our homes. Now is not the time for the government to be pulling the rug on a key green stimulus measure.” Last month, the Guardian revealed householders and builders had a slew of complaints about the way in which the scheme was administered by the US company ICF. They said it was almost impossible to get through to the administrators by phone or email.