British Gas yesterday announced plans to cut 500 jobs, mostly from its loft and cavity wall services, as part of an ongoing cost-cutting plan from parent company Centrica.
British Gas plans to close its loft and wall insulation business as part of the cost reduction measures, slashing hundreds of jobs in the latest blow to the energy efficiency industry still suffering from the closure of the Green Deal and uncertainty over future government policy direction.
The move forms part of plans announced over the summer to cut 6,000 jobs at Centrica, as the firm focuses on becoming a "customer-facing" business by scaling back its oil and gas operations in the North Sea and investing in the "connected homes" market.
Mark Hodges, British Gas' chief executive of energy supply and services for UK and Ireland, said the company was focused on improving its "efficiency and effectiveness" to meet the changing needs of customers. "British Gas is well positioned to grow, but we must ensure that our costs allow us to be competitive for our customers," he said in a statement.
"I recognise that this will be difficult news for the employees who may be affected. However, I believe today's announcement is in the best long-term interests of the business. Our priority is to support all those potentially impacted, and to ensure a fair and transparent consultation process."
Brian Strutton, national officer of the GMB union, said the closure of British Gas' loft and cavity wall business was a "real sickener" for both the employees effected and people living in cold homes.
"British Gas was playing a significant part in tackling cold homes and improving energy efficiency," he said. "Now the government will need to look at revising its carbon emission targets as a result of these and other job losses in the insulation sector."
The news comes as fears grow that the energy efficiency and insulation sectors are facing a significant slowdown in demand over the next few years, after Energy and Climate Change Minister Lord Bourne said full details of government plans to reform the Energy Company Obligation (ECO) scheme to focus on fuel-poor households would not be delivered until 2018.
The National Insulation Association warned last autumn that a slowdown in the ECO scheme and the shelving of the Green Deal energy efficiency financing scheme had resulted in a "policy void" that had already led to over 2,000 job losses.
Ministers have maintained one million homes will receive energy efficiency upgrades over the course of this parliament, but industry insiders, such as Ed Matthew of the Energy Bill Revolution campaign, have countered that the goal represents a reduction of 78 per cent on the number of homes that received support in the last parliament.
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