Almost 300 workers in South Wales have been made redundant after a major energy efficiency company collapsed into administration. The firm has squarely blamed the UK government's decision to wind down a key green funding programme for its downfall.
Company Collapse Blamed on Government Scheme 'Run-Down'
City Energy Group confirmed on Friday, January 9, that it is undergoing a major restructure. This move will result in the loss of 295 jobs at its subsidiary, Consumer Energy Services (CES), which operates from sites in Swansea and Treorchy, Rhondda Cynon Taf.
A spokesperson for the group stated that the conclusion of the ECO4 scheme created "significant headwinds" for the CES arm. This subsidiary had generated substantial revenue specifically from the government initiative. "Despite exhaustive efforts to secure a solvent path forward, regrettably it was not viable to continue trading," the spokesperson added.
The company confirmed it will now be unable to carry out any remedial works, repairs, or resolve existing customer complaints. Administrators will take over responsibility for supporting the affected staff.
What Was the ECO4 Scheme?
The ECO4 (Energy Company Obligation) scheme was a government programme designed to tackle fuel poverty and reduce carbon emissions. Running until March 2026, it obligated larger energy suppliers to fund energy efficiency upgrades for low-income and vulnerable households living in the least efficient homes.
The scheme focused on properties with an Energy Performance Certificate (EPC) rating of D, E, F or G. It promoted a 'fabric-first' approach to whole-house retrofits, funding measures like insulation, heat pumps, and solar panels. Households could qualify via benefits, low income, or specific health conditions.
Government Response and Shift in Policy
Responding to the collapse, a spokesperson for the Department of Energy Security and Net Zero defended the decision to end the ECO and similar schemes. They claimed these programmes "were not delivering value for money."
Instead, the government pointed to its increased investment in the Warm Homes Plan. "We are instead investing an additional £1.5 billion into our Warm Homes Plan, taking it to nearly £15 billion – the biggest ever public investment to upgrade homes and tackle fuel poverty," the spokesperson said.
The sudden end of the ECO4 funding stream, however, has left companies like City Energy Group without a viable business model for their retrofit operations, leading directly to the job losses announced this week.
