Evaluation of the Energy Efficiency Scheme: Full Report

Question 1

Executive summary

Accepted Answer

Overview of the energy efficiency scheme

In 2023, the UK Government announced the VCSE Cost of Living (CoL) Programme, a £101.5m support package provided by the Department of Culture, Media and Sport (DCMS) to help frontline delivery organisations with cost of living challenges. Part of the support package was the Energy Efficiency Scheme (EES), a £25.53m scheme to support VCSE organisations with their energy efficiency. The Community Organisations Cost of Living Fund (CCLF) was the other part of the package (and has been evaluated separately).^{[footnote 1]}

The scheme was launched in December 2023 and was originally planned to close in March 2025. However, the scheme was extended for some VCSE organisations that faced unforeseen delays with their projects, with these due to be completed by July 2025. Groundwork UK was the lead independent grant maker (IGM) organisation in a consortium working alongside Groundwork Trusts, Energy Saving Trust, Centre for Sustainable Energy, Locality, and Social Investment Business.

The main components of the scheme were:

Independent energy assessments (IEAs): organisations could apply for an IEA to help them understand what behavioural energy efficiency changes could be implemented and which capital measures they could install. In mid-2024, the IGM launched the ‘EnergySharp’ support service, a post-IEA support line, to help VCSE representatives to understand and interpret their IEA, and decide whether or not to go on to apply for a capital grant.

Capital grants: Organisations with an energy assessment could apply for a capital grant (of between £2000 and £150,000) to install energy efficiency measures recommended in their IEA. The IEAs could have been done via the EES, or through other routes in the 2 years prior to their EES application, subject to meeting the scheme’s quality criteria. Those successfully applying for a grant were offered the opportunity to have a ‘capital enabler’ – a specialist from the IGM that would help them with technical support, engaging suppliers to install recommended measures, and reviewing quotes from potential suppliers

Evaluation of the EES

DCMS commissioned Ecorys, in partnership with Dr Sam Hampton (Independent researcher), Dr Katherine Sugar (University of Manchester) and Professor Dan van der Horst (University of Edinburgh) to evaluate the EES.

The overarching objectives of the evaluation were to understand:

How both elements of the EES funding were delivered;
What the outcomes and impacts were for IEA recipients and capital grant holders; and
The expected economic costs and benefits of the EES

The evaluation initially ran from November 2023 to March 2025. As the scheme finished after the development of this report, it was not possible to fully assess the outcomes, impacts and economic costs and benefits of the EES. In March 2025, DCMS extended the evaluation contract to run until March 2026, to ensure that more evidence on impact and value-for-money (VfM) could be gathered. This current report therefore presents the process evaluation findings, and early findings for the impact and economic evaluation.

To address the research aims, the evaluation took a mixed-method approach, including:

Interviews with:
- Programme partners at two time points - May-June 2024 and January-February 2025. At the first time point, 7 DCMS staff and 18 representatives from the IGM were interviewed. At the second time point, interviewees included 8 DCMS staff, 14 IGM representatives and one member of the Advisory Board ^{[footnote 2]}
- 12 independent energy assessors involved in delivering IEAs through the scheme
- 50 VCSE representatives awarded IEAs and/or capital grants
Two online surveys, administered between November and December 2024 - one targeted at organisations that were successful in their IEA application, and one targeted at those that had applied for an IEA but had been unsuccessful.^{[footnote 3]} Respondents to each survey were entered into a prize draw to win one of 5 £100 donations (10 donations overall) to their organisation, to help encourage participation
- The successful applicant survey achieved 432 responses (a 40% response rate)
- The unsuccessful applicant survey achieved 183 responses (32% response rate)
Analysis of management information (MI) to help understand the characteristics of grant-recipient organisations, including what services, activities and capital measures the funding sought to enable (e.g. application form data for IEA and capital grant applicants, IEA report findings, use of EnergySharp, capital grants approved and capital grant budgets (original and final))

The evaluation used Bayesian Process Tracing (BPT), as a theory-based approach to assessing impact. This involved developing 4 hypotheses about the impact of EES (or claims about the scheme’s contribution to outcomes), and then using the evidence gathered through the evaluation to assess the probability that these hypotheses were true (see ‘Impact evaluation findings’ section for results of the analysis).

Limitations to the evaluation included: a lack of capacity for some VCSE representatives to take part in the fieldwork (and the survey to some extent) meaning that all organisations involved were those with the capacity to participate; due to the timescales of evaluation and scheme implementation, full assessment of capital grants delivery, impact of the EES and economic costs and benefits of the scheme was not possible; and some data quality issues in the MI.

Process evaluation findings

Views on EES design

The overall views on the design of the EES were positive and programme partners involved felt that it addressed a need. The two-stage approach of requiring an IEA before moving onto a capital grant application provided an opportunity for VCSEs with limited knowledge around energy efficiency to learn more about potential improvements to their building, before developing a capital grant application. The introduction of EnergySharp – the post-IEA support service – was viewed as effective by programme partners and VCSE representatives.

Aspects that were viewed as working less well were the timescales available for spending the capital grant (which were felt to be too tight for capital works and installations), and use of a large number of independent energy assessors, from different companies and backgrounds (and who had different approaches to completing reports), which led to inconsistencies in IEA reports.

Effectiveness of EES set-up

The timescales for designing the EES were short, with the IGM only being in place 2 months before scheme launch. Key successes for the programme partnership in this challenging context included being flexible in design and implementation, taking a collaborative partnership approach, incorporating the learning from the CCLF, and delivering to timescales to ensure funding could be spent quickly.

The main challenges encountered related to the limited experience of DCMS (due to being relatively new to the energy efficiency sector), and identifying the focus of, and priority measures for, the scheme due to complexities with assessing the payback periods for certain measures and how to balance revenue generation potential (e.g. from solar panels via selling electricity through ‘feed-in’ tariffs) with longer-term cost savings (e.g. fabric-first approaches, which focus on improving the efficiency of the building’s walls, floors, windows etc, to improve the thermal performance of the space).

Assessor recruitment

In December 2023, the IGM advertised an Expression of Interest (EOI) to energy assessors to join their ‘Informal Supplier List’ (which opened in early 2024). Interested energy assessors had to submit an application to the IGM, which included information about their qualifications and experience. If approved, the IGM would then match assessors to VCSEs, based on geographic location, how quickly they could complete the assessment, and any specialist skills or expertise required to undertake assessments. In general, the recruitment of assessors was successful, with 76 recruited to the scheme. Word-of-mouth (e.g. advertising the scheme via accrediting bodies), or directly approaching assessors, were the most effective engagement routes. However, programme partners noted that recruitment took longer than expected and, because eligible energy assessors used different methodologies, terminology, and had different levels of training, the IGM had to use different messaging to reach this diverse audience.

VCSE outreach and communications

Most VCSEs heard about the scheme through membership bodies or networks, via Groundwork UK or through their organisation/colleagues. The scheme therefore benefitted from having a well-networked IGM that could get the word out. However, this could have meant that VCSEs less well-networked may not have heard about the opportunity. Some of the IGM’s budget was used for webinars targeted at specific groups to try and increase reach towards the end of the application window. However, programme partners did not think this was particularly effective, as it was used quite late on in the outreach phase and attendance at webinars was lower than expected.

Effectiveness of application processes

Applications for IEAs opened in December 2023 and closed in late June 2024. Throughout this period, IEA applications were assessed on a weekly basis, via a panel attended by the IGM and an observer from DCMS. Capital grant applications opened in January 2024 and closed in August 2024 (although some VCSE IEA recipients were granted a deadline extension to give them sufficient time to review their IEA reports and make an application).

Overall, 1782 applications for IEAs were submitted. In line with the main intentions for the scheme, around half of successful (48%) and unsuccessful (52%) applicants responding to the survey applied to the EES to help lower their energy bills and reduce energy-related costs. Around a quarter (26% successful, and 22% unsuccessful) of organisations applied to enable them to access grants for capital measures.

IEA applicants were generally satisfied with their experience of applying for an IEA, in terms of the information provided to help them make their application. They were less satisfied with the level of information they needed to provide, with some noting the applications were very long.

Overall, the EnergySharp service worked well. Of the successful organisations that used EnergySharp (n=51), feedback was markedly positive, with survey respondents stating that it was either very helpful (n=25) or slightly helpful (n=24). Types of support accessed included advice on applying the IEA to the capital grant application, and getting clarity on the capital grant application criteria, eligibility and process.

Feedback on the capital grant application process was mixed. Aspects that worked better for VCSEs included the information provided about the opportunity, the webinars held to explain the grant process, and the guidance documents provided. The length of time between submitting an application and receiving a decision was more negatively viewed, as was the amount of information needed to complete the grant application.

Effectiveness of decision-making

IEA applications were assessed on a weekly basis, via a panel attended by the IGM and an observer from DCMS. Capital grants were assessed by larger panels that included representatives from the majority of the consortium partners and a DCMS observer.

Decision-making generally worked well according to those involved. Key successes included the training and guidance provided to application assessors, having weekly panels for applications (to support fast decision-making and keep the flow of applications manageable), and having multiple partners on the panel with different areas of expertise to inform decision-making.

The key challenge was balancing the criteria to assess the applications and assessing what ‘frontline critical services’ were (i.e. identifying what types of service were in or out of scope). Early on in the scheme, the panel considered the quality of initial capital grants applications to be poor, for reasons including missing information, short responses and applications from organisations not delivering frontline critical services (i.e. the target VCSEs). However, the quality of applications improved after the introduction of EnergySharp.

Scheme reach

Overall, the EES received fewer IEA applications (and made fewer awards) than originally anticipated, but the capital grants element was oversubscribed:

Of the 1,782 applications for an IEA, 1,147 IEAs were approved (64%)
Of the 761 capital grant applications made, 329 applications were approved (43%) and 316 have been awarded (42%)

The most common pathway through the EES was securing an IEA first, before going on to apply for a Capital Grant.

Most successful organisations were based in the North West, South East, South West and Yorkshire and Humber regions, were small-and-medium sized organisations and delivered frontline services directly (rather than only managing a ‘hub’ for other VCSEs to deliver from).

There was an equal balance of renter and owner-occupier applicants; most VSCEs were based in buildings over 20 years old (around a third were over 100 years old), and most had an ‘average’ energy efficiency rating for their organisation at the point of application.

There was large variation in the energy usage data across VCSEs, although around 30% estimated using over 100,000 kWh per year. The average (mean) expenditure on energy as a proportion of overall annual expenditure was 12.3% amongst IEA recipients and 11.7% among grant recipients.

IEA delivery

VCSE representatives reported having a generally positive experience of IEA delivery. They were most satisfied with their energy assessor’s expertise and professionalism; how long they waited for the IEA to take place once their organisation was approved for one; and how easy the energy efficiency recommendations were to understand. VCSE representatives were less satisfied with the types of capital measure recommendations included in the report (e.g. recommendations to install heat pumps first rather than focusing on improving the insulation of the building) and the overall quality of the reports. Programme partners also flagged concerns about the variability of the quality of reports, with some needing to be re-done.

Across the 1,147 completed IEAs, 5,375 recommendations for energy efficiency measures were made. Most recommendations were for solar panels, LED lighting installation, insulation improvements, and heating system upgrades or replacements. Figure ES 1 shows the cost per measure by IEA category. Despite being the fourth most commonly recommended measure, heat pumps represented the most expensive category, with an estimated cost per measure of £86,988. The other most commonly recommended measures, solar panels and LED lighting installations, were typically cheaper, with an average estimated cost of £27,563 and £14,264 respectively.

Figure ES 1: Cost per measure by IEA category

Source: IEA report data (n=1142)

‘No-cost’ behavioural measures were also recommended, such as staff and volunteer training, temperature monitoring, shifting operations to off-peak hours and regular monitoring and reporting on equipment and energy consumption.

Capital grant delivery

It was possible to conduct an early assessment of capital grant delivery (although delivery was ongoing at the time of reporting). For those trying to begin their projects, there were a number of factors affecting delivery, including: late IEA reports delaying their capital grant application and shortening timescales for delivery; challenges with sourcing suppliers to install measures; delays relating to gaining planning permissions, or identifying an unexpected need for planning permissions; capacity-related challenges for taking on project management of the installations; and factors such as poor weather or identifying unexpected issues (e.g. asbestos) that subsequently delayed delivery. The research with VCSE representatives highlighted some examples of additional, unexpected, costs incurred by VCSE organisations (e.g. costs relating to gaining planning permissions for measures); although this appeared to be the experience of a minority of grant holders.

Based on the data available at the time of analysis, a total of 1,216 separate capital measures were funded through the EES. The majority of funding (£14.7 million) was awarded across 6 categories of measure: just under a third (30%) of funding was awarded for solar panels, 14% for insulation improvements, 12% for LED lighting installation, 9% for heat pumps, 7% for window, glazing and door upgrades, and 6% for heating systems upgrades (see Figure ES 2 overleaf).

The most common IEA recommendations were also those that were most often funded. However, lighting and insulation improvements represented a larger proportion of grant measures than IEA recommendations, and less commonly recommended measures such as batteries, mini-split Heating, Ventilation and Air Conditioning (HVAC) systems, and point of use water heaters attracted disproportionately less funding.

Figure ES 2: Total value of grants (£) awarded by category

Source: Management information from Groundwork UK (Capital grants, n=1,216)

Impact evaluation findings

At the time of reporting, it was generally too early to assess all the outcomes of the EES; however, there was evidence that the scheme was on track to reach its intended outcomes.

Progress towards shorter-term outcomes

Research with VCSE IEA recipients indicated that going through the process of the IEA via the EES positively influenced knowledge of recipients’ buildings’ energy needs (and other structural needs) and their knowledge of energy efficient practices (including what measures they could install to increase energy efficiency, and what behaviours they could implement to reduce energy usage). The BPT analysis provided further evidence of this. Analysis to test the hypothesis on energy efficiency knowledge ^{[footnote 4]} indicated a 68% likelihood that the evidence collected supported the hypothesis that the EES IEAs helped VCSEs to improve their knowledge of energy efficient practices.

Where VCSEs had installed measures or implemented behaviour changes, it was generally too soon for them to say if it had an impact on their energy usage and, subsequently, if it had led to any energy bill savings. However, some capital grant recipients expected that solar panel installations, in particular, could potentially be a source of revenue generation in future, whereby they could sell surplus energy generated back to the national grid. The BPT analysis for the hypotheses on energy usage and energy bills ^{[footnote 5]} was inconclusive, with equal likelihood (at this stage in the evaluation) that the evidence collected to test the hypothesis on energy bill savings through EES support did or did not contribute to their energy usage and bills savings. In particular, it was less than likely that ‘no cost’ behaviour changes contributed to reducing VCSEs’ energy usage. ^{[footnote 6]}

Progress towards longer-term outcomes

Most VCSE representatives engaged in the research did expect that the capital measures would support their organisation’s financial resilience and service delivery. Energy bill savings were expected to ease the financial pressures for most VCSEs and help to build up or reduce reliance on their financial reserves. In terms of service delivery, many also anticipated that the installations would help expand their service provision. This was most often due to the anticipated ability to keep premises open for longer periods of time.

Limited evidence was provided on the impact of behavioural or capital measures on organisations’ working environment and conditions, although there was evidence that measures had led to warmer premises in the case of some VCSEs.

Economic evaluation findings

At the time of reporting, it was too early for a full assessment of the Value for Money (VfM) represented by the EES, although initial evidence indicates that the estimated monetised benefits of the EES (energy bill savings and carbon savings) will outweigh the costs between 4 and 8 years post EES. Non-monetised benefits (financial resilience, maintaining service delivery, or wellbeing, for example) and indirect/ unexpected costs (structural costs to VCSEs, for example) were not included in the assessment.

The value for money assessment also indicated that:

Costs were minimised whilst ensuring good quality delivery (with underspent budget reallocated as required to improve scheme delivery (e.g., to fund the EnergySharp helpline service to support VCSEs to develop high quality capital grant applications).
The EES was generally delivered efficiently given the challenging timescales in which a large amount of funding needed to be spent. Some inefficiencies were identified, such as poor-quality IEA reports requiring rewriting and poor-quality capital grants applications taking a long time to review. However, the flexible approach to delivering the scheme also enabled some efficiencies, such as introducing the EnergySharp service (to improve the quality of capital grant applications), and introducing contingency funding (usually 5% of grant request value) for capital grant recipients facing additional, unexpected, costs in delivery – primarily due to several VCSEs receiving higher supplier quotes than expected.
The distribution of funding through the EES was equitable, across several VCSE organisation characteristics, such as region, organisational size and primary service theme.

Analysis of the cost profile (at the time of reporting, and before delivery had finished), indicated that the expected direct cost profile was broadly on track, with spend at £16.2m as of the end of January 2025. The expected total direct costs of the scheme are expected to total just shy of the predicted budget at £25.2m, 2024 prices. The final total direct cost will be available for review in the next phase of the evaluation.

The indicative breakeven analysis showed that the partial monetised expected benefits will equal the total direct costs of the scheme between June 2027 and January 2031 in a high and low scenario respectively. Most of the costs were incurred over the scheme period, whereas most of the benefits would be experienced beyond this time.

Recommendations

While it was too soon to provide a complete set of recommendations at the time of reporting – without full evidence on the overall outcomes and impact of the EES – the scheme implementation and delivery generated learning that could be applied to future, similar schemes:

Using a two-stage funding process for newer operational/ funding areas: the evidence indicated that for funding areas that are relatively new to VCSEs (such as energy efficiency) – and even those that are not – having a two-stage process similar to EES could be helpful to help them develop knowledge and skills first, before then needing to develop a project plan and a detailed application form for grant funding. The evaluation evidence indicated that even having a fund just for IEAs was effective in building the knowledge of energy efficiency for VCSE representatives
Pre-application support is similarly useful for newer policy areas: Future similar schemes could consider building in pre-application support, similar to EnergySharp, from the outset, to ensure VCSE organisations with less resource/capacity and prior subject knowledge still have the opportunity to apply for funding
Increasing timescales for spend: Future capital funding schemes need to be delivered over longer time periods to ensure all projects can be delivered, and to allow contingency time for unexpected issues for planning permissions and installation works
Consortium partnerships for complex projects: Future similar schemes could consider utilising the partnership approach (i.e. where a consortium of expert partners co-design the programme with the funder) when launching new or large-scale programmes to ensure all relevant expertise/experience is covered
Ringfence more funding for communications and outreach: Future schemes could consider ringfencing more funding to allow for a dedicated marketing campaign, including payment/renumeration to membership organisations representing VCSEs led by minoritised groups (and/or others) to deliver communications activities with their networks

Based on the evidence, the main reflection for the wider VCSE sector relates to:

Provision of capital funding: there is – and remains – a need for support to the VCSE sector to improve its energy efficiency and, according to programme partners and VCSE organisation representatives, there remains a general lack of capital funding available to support organisations to do this. However, the evaluation also highlighted that many of the applicant VCSEs’ buildings were old, and interviews highlighted that there were often other, structural, works required before energy efficiency measures could be installed. This indicates a wider need for capital funding to address such challenges, to then enable VCSE organisations to participate in schemes such as the EES to reduce both their costs and their carbon footprint

Question 2

1.0 Introduction

Accepted Answer

This introductory chapter provides an overview of the background and context of the Energy Efficiency Scheme (EES), before providing details on the evaluation aims and objectives, methodology, and limitations. It then sets out the structure of the rest of the report.

1.1 Background and context

In 2023, the UK Government announced the VCSE Cost of Living (CoL) Programme, a £101.5m support package provided by the Department of Culture, Media and Sport (DCMS) to help frontline delivery organisations with cost of living challenges. Part of the support package was the Energy Efficiency Scheme (EES), a £25.53m scheme to support VCSE organisations with their energy efficiency.^{[footnote 7]} There were two elements to the scheme:

Independent energy assessment (IEA): organisations could apply for an IEA to help them understand what behavioural energy efficiency changes could be implemented and which capital measures they could install
Organisations with an energy assessment could apply for a capital grant (of between £2000 and £150,000) to install the recommended energy efficiency measures

The first element (IEA) was launched in early December 2023, with applications open until 20th June 2024. The second element was launched in mid-January 2024 and applications closed on the 14th August 2024 (except for those whose IEAs were delivered late, and subsequently received a two week extension). Originally, all capital measures were to be completed by mid-February 2025, with all grant payments processed by end of March 2025. However, the scheme was extended for projects that faced unforeseen delays. All projects were due to be completed by July 2025.

Groundwork UK was the lead independent grant maker (IGM) organisation in a consortium working alongside Groundwork Trusts, Energy Saving Trust, Centre for Sustainable Energy, Locality, and Social Investment Business.

1.2 Overview of the evaluation

The overarching objectives of the evaluation were to understand:

How both elements of the EES funding were delivered;
What the outcomes and impacts were for IEA recipients and capital grant holders; and
What the expected economic costs and benefits of the EES are

In addition, the evaluation sought to support wider DCMS and government objectives by building the evidence base in key areas of interest, alongside improving understanding of organisational resilience and VCSE finances, the wider sector ecosystem, and the sector’s approach to energy efficiency.

At the outset of the evaluation, a programme Theory of Change (ToC) and detailed evaluation plan was developed and agreed with DCMS. The evaluation framework developed to guide the study is included for reference in Annex 1, alongside the ToC in Annex 2. The ToC provides a basis through which to assess the EES’s implementation and outcomes.

1.3 Methodology

Evaluation activities comprised several key methods – interviews with programme partners (see 1.3.1 below),^{[footnote 8]} interviews with VCSEs, surveys of successful and unsuccessful IEA applicants, and analysis of programme management information (MI) data. Details of the implementation of these different strands is provided below.

Figure 1: Overview of approach

1.3.1 Interviews

Interviews were conducted with a range of stakeholder groups, as detailed below:

Programme partners: interviews with programme partners were conducted at two time points: from May-June 2024 and January-February 2025, to reflect on design and implementation, and delivery and outcomes, respectively. In the first wave of interviews, 7 DCMS staff (current and former) were interviewed, alongside 18 representatives from Groundwork UK and the IGM consortium. In the second wave of interviews, 8 DCMS staff were interviewed, 14 representatives from the IGM consortium, and one member of the Advisory Board ^{[footnote 9]}
Independent energy assessors: interviews with 12 independent energy assessors took place from May-June 2024, focusing on the experiences of recruitment to the EES, IEA delivery, and outcomes from the IEAs
Interviews with VCSEs awarded IEAs and/or capital grants: a total of 50 VCSE organisational representatives were interviewed (23 from June to August 2024, and 27 from November to January 2025). Organisations were sampled to reflect the characteristics of the population of IEA and capital grant recipients. The sampling criteria used were: geographical location; service theme ^{[footnote 10]}; service provider user demographics; organisation size and type of energy assessor (company or independent). Sampled organisations were largely receptive to participating; however, some felt they lacked the capacity to engage at the time of the research. In these instances, the organisation concerned was replaced with an alternative with similar characteristics

1.3.2 Surveys

Two online surveys were administered between November and December 2024. One targeted organisations that were successful in their IEA application, and one targeted at those that had applied for an IEA but had been unsuccessful. ^{[footnote 11]} The surveys focused on the effectiveness of the EES application processes (for IEAs and capital grants, where applicable); experiences of the EES (for IEAs and capital grants, where applicable); for successful applicants, understanding what difference, if any, accessing support from the EES made; and for unsuccessful applicants, what happened in the absence of an EES IEA, exploring what other – if any – energy efficiency support they went on to access instead. Respondents to each survey were entered into a prize draw to win one of 5 £100 donations (10 donations overall) to their organisation, to help encourage participation. The successful applicant survey achieved 432 responses (a 40% response rate) and unsuccessful applicant survey achieved 183 responses (32% response rate).

Drawing on the survey data, this report includes relevant descriptive statistics, cross-tabulations, and comparisons between grant-holders and unsuccessful applicants where appropriate. In addition, survey evidence was also used as part of the impact evaluation through Bayesian Process Tracing analysis, a statistical technique that offers a systematic and transparent method for evaluating impact ^{[footnote 12]}. Using the survey results, the process-tracing methodology was employed to assess the overall contribution of EES across four contribution claims ^{[footnote 13]}. As the focus of the survey data is unique organisations, each organisation can be given a likelihood value that can be aggregated to present findings as relative proportions of different likelihood ranges. More information about this approach can be seen in Annex 4.

1.3.3 Analysis of management information data

MI data collected for the EES programme was analysed to help understand the characteristics of grant-recipient organisations, including what services, activities and capital measures the funding sought to enable. Data analysed included:

application form data for IEA and capital grant applicants;
IEA report findings (including energy efficiency recommendations made);
Usage of EnergySharp (a post-IEA support service to help VCSE representatives interpret their IEA report and decide whether to apply for a capital grant);
capital grants approved; and
capital grants budgets (original and final versions)

1.3.3.1 Limitations

Every effort has been made to ensure that the evaluation methodology is robust, ensuring the accuracy of findings. However, there are a small number of limitations and contextual factors that are important to acknowledge.

Of the initial organisations contacted to participate in the interviews, many reported not having capacity to take part at that point in time. A wide range of reasons were given, including being short staffed, facing a busier period than usual, or only having a small team. This may have led to a small limitation in that all organisations involved were those with the capacity to participate. This limitation likely also affects the survey to some extent
The evaluation was conducted in parallel with scheme delivery and the evaluation timescales ended before the EES delivery finished. This means a full assessment of the capital grant delivery, and the outcomes and impacts of these activities, is not possible at the time of reporting. This also means that it is not possible to conduct a full economic evaluation, and instead, only estimates of energy and cost savings are possible at this stage. Throughout the report we have highlighted where this limitation has affected our analysis
Data limitations have also arisen with the extraction of MI data from the Flexigrant database Groundwork UK used to collate application data, IEA reports, and capital grant awards. Several variables required data cleaning, such as manually entered number of hours in a week the VCSE building was in use, and it was evident that some organisations had included either only one day’s figures (too low) or numbers exceeding the upper limit of 168 hours in a week, for example. Other errors occurred with reference numbers used to merge data sets; these were minimised through a data cleaning process. Other variables such as carbon savings had unclear time horizons per VCSE, making it not possible to compare estimates or aggregate these variables. The data on capital grants also provided only a partial view (311 out of 329 VCSEs) of the full population of capital grantees, as not all offers had been accepted at the time of the data share

1.4 Report structure

The report is structured as follows:

Chapter 2 focuses on findings from the process evaluation relating to the EES’s design and early implementation, discussing the design phase, independent assessor engagement, VCSE engagement, and the application and decision-making processes involved in disbursing the grants
Chapter 3 discusses the findings from the process evaluation relating to the EES’s delivery. It discusses the scheme’s reach, IEA delivery, capital grant delivery, and grant management
Chapter 4 examines the early (and estimated) outcomes and impact of the EES on VCSE organisations, relating to energy usage, energy cost savings and service delivery
Chapter 5 focuses on the findings from the economic evaluation, with an indicative assessment of value for money comparing the costs of the scheme, estimated benefits that can be identified to date, and the potential future breakeven point (i.e. when benefits might equal costs)
Chapter 6 provides final conclusions and reflections on learning to date

Question 3

2.0. Process evaluation: design and early implementation

Accepted Answer

This chapter first reflects on the design of the scheme, before exploring the effectiveness of the early implementation of the EES. It discusses views on the design phase, assessor recruitment, and VCSE engagement, as well as the application and decision-making processes involved in distributing the grant funding.

Key findings

Overall views on the design of the EES were positive and those involved felt that it addressed a need. The two-stage approach, of requiring an IEA before moving onto a capital grant application, provided an opportunity for VCSEs with limited knowledge around energy efficiency to learn more about potential improvements to their building, before inputting time to developing a capital grant application. The introduction of EnergySharp – the post-IEA support service – was viewed as effective by programme partners and VCSE representatives.

The timescales for designing the EES were short, with the IGM only being in place 2 months before scheme launch. Key successes for the programme partnership in this challenging context included being flexible in design and implementation, taking a collaborative partnership approach, incorporating the learning from the CCLF, and delivering to timescales to ensure funding could be spent quickly. The main challenge related to the team’s limited experience of similar schemes (due to being relatively new to the energy efficiency sector) , and identifying the focus of, and priority measures for, the scheme.

In general, the recruitment of assessors was successful, with 76 recruited to the scheme. Word-of-mouth (e.g. advertising the scheme via accrediting bodies), or directly approaching assessors, were the methods most effective for engaging them. However, programme partners noted that recruitment took longer than expected.

Most VCSEs heard about the scheme through membership bodies or networks, via Groundwork UK or through their organisation/colleagues. The scheme therefore benefitted from having a well-networked IGM that could get the word out. However, this could have meant that VCSEs less well-networked may not have heard about the opportunity.

Overall, IEA applicants were generally satisfied with their experience of applying for an IEA, in terms of the information that was provided to help them make their application. They were less satisfied with the level of information they needed to provide, with some noting the applications were very long.

Feedback on the capital grant application process was mixed. Aspects that worked better for VCSEs were around the information about the opportunity, the webinars on the grant process, and the guidance documents. The length of time between submitting an application and receiving a decision was most negatively viewed by organisations, in addition to the amount of information needed to complete the grant application.

Decision-making generally worked well, according to those involved who were interviewed. The key challenge was balancing the criteria to assess the applications and making decisions about which organisations to prioritise.

2.1 Design

In August 2023, DCMS launched a tendering process to procure an intermediary grant maker (IGM) to deliver the EES, leading to the provisional appointment of an IGM in September 2023 – a consortium led by Groundwork UK. The appointment was provisional because, while DCMS had its outline business case (OBC) approved by the Department’s Finance Committee, it still needed to develop the full business case (FBC) to secure the funds for the scheme. The FBC was approved in November 2023 and the scheme was launched in December 2023.

2.1.1. Views on the design of the EES

Interviews with programme stakeholders and VCSE representatives highlighted several aspects of the EES’s design that they thought worked well:

EES addressing a need: several programme partners highlighted that there was a strong need for dedicated funding for VCSEs to access energy efficiency advice and installations, and welcomed the launch of the EES. In particular, the ambition of the scheme was noted as a positive by programme partners in terms of the volume of IEAs and capital grants intended to be delivered. It was highlighted that nothing on this scale had been done in England before for the VCSE sector. In addition, in the context of the wider VCSE Cost of Living Programme (with the CCLF aiming to address the urgent need for maintaining service delivery during the winter months), programme partners also felt that it was good that the EES was designed to support VCSEs’ longer-term financial resilience
The two-stage process: there was consensus across the DCMS and consortium stakeholders interviewed that the two-stage process - of requiring VCSEs to have an IEA undertaken,^{[footnote 14]} and then providing funding for recommended capital measures to be installed – worked well. In particular, it was noted that this provided an opportunity for VCSEs less familiar with energy efficiency to first access a tailored energy assessment, thereby increasing their understanding of potential improvements to their building(s) alongside behavioural changes relating to energy use, before then having the option of applying for a capital works grant. For example, one programme partner noted that many of their members do not know where to start with energy efficiency, so this design worked well. Several programme partners likewise suggested that the design made the scheme more accessible to VCSEs new to considering energy efficiency
The EnergySharp application support service: programme stakeholders often reflected that introducing the EnergySharp service, using underspend from the IEA aspect of the work (see Chapter 5) had been a positive development. It was likewise seen as helpful in terms of supporting organisations to understand and interpret their IEAs, and subsequently to develop grant applications. This service helped to improve the quality of capital grant applications and several programme stakeholders felt that future similar schemes should include similar application support (from the outset)

The EnergySharp telephone support… in an ideal world, there would have been more time to develop the whole scheme and we and the grant maker would have realised that there is going to be a support gap there… but we still were able to act flexibly and remobilise resources to incorporate this additional support.

– Programme stakeholder

Aspects of the design that stakeholders felt worked less well included:

Capital grant timescales: concern about the timescales for spending the grant was a common theme in interviews with programme partners, independent energy assessors and VCSE representatives. Some programme stakeholders noted that there was a balance between responding quickly to the challenges faced by VCSEs as a result of rising costs of living, whilst ensuring sufficient time for delivery, and they questioned if they had got the balance right. In practice, due to challenges faced by VCSE grant holders in implementing their projects (as detailed further in Section 3.3, challenges included needing planning permissions, being unable to use identified contractors and experiencing unexpected issues such as asbestos), the EES was extended for projects that faced unforeseen delays, with all projects due to be completed by July 2025.. While most VCSE representatives were understanding as to why projects needed to be delivered by mid-February 2025, most reflected that future, similar schemes would benefit from having much longer delivery times

I would say the timelines are really tight and one thing, if we had had a bit longer potentially, where exceptional circumstances have come up, it would have given grantees a longer time to work around things like finding asbestos or inclement weather or things like that. And also maybe then to implement other measures that were approved or recommended in the IEA and approved in panel. If we just had a little bit more time, you know, I think we could have been a little bit more flexible on what they could have achieved.

– Programme stakeholder

Perceived focus on shorter-term cost-savings: while the EES was launched to support VCSEs in the context of increasing cost of living challenges, and programme partners generally felt this was important for supporting VCSEs’ financial resilience, some programme partners and energy assessors felt that there was too much focus on measures that would generate short-term cost savings. This was felt to be potentially at the expense of recommending measures that might generate greater carbon reduction or may be better for the building(s) concerned in the longer-term. As Section 3.2 highlights, there was a lack of clarity amongst some programme partners and energy assessors about the types of measures that should be prioritised (i.e. if they should recommend those with the best cost-savings in the intended payback period, or those that would support the best environmental outcomes). This had implications for the IEAs, the recommendations initially made, and changes subsequently required to these

The weighting seemed a little bit off… it was like the financial return was more important than the environmental return.

– VCSE representative

Use of a large number of independent energy assessors: several energy assessors and programme stakeholders reflected that there were a large number of energy assessors enrolled in the scheme, some of whom were individual contractors and others larger consulting firms. They questioned whether this was the most effective approach and whether there should be fewer assessors (over several larger organisations), particularly due to this approach requiring considerable quality assurance to ensure consistency across assessors. However, some programme partners felt that the EES’s approach made it more accessible to individual contractors / sole traders, who might otherwise not have been involved in a large-scale scheme. Alternative options suggested included procuring larger organisations that could deliver across the country, or creating regional ‘lots’ so that suppliers could deliver services across each region

2.2. Effectiveness of the design phase

Alongside reflections on the overall design of EES, the evaluation also gathered learning on what worked well and less well in the process of designing and setting up the scheme.

2.2.1. What worked well

Programme partners reflected on a number of key aspects of the EES design and set-up phase that they felt worked well, including:

Being flexible in design and implementation: Flexibility in the design of the scheme, and an openness to adapt the design if needed, was a common theme in the interviews. Programme partners noted that this stemmed from the early involvement of the IGM in supporting the business case development, which meant that they were involved in initial decisions on aspects such as recruiting assessors, or whether to offer grants for IEAs or not. Programme partners welcomed that they were also able to continue adapting the scheme design as they got into delivery, reflecting on the learning of the scheme so far – for example with the introduction of the EnergySharp service (see Section 2.4)

I think there was a certain amount of ability to reflect on what was working and what wasn’t as we developed.

– Programme stakeholder

Collaborative partnership approach: programme partners involved in the design phase also felt that both DCMS and the IGM had been very collaborative, respectful of each other’s experience and expertise, and had provided constructive feedback. For example, one programme partner highlighted how DCMS listened to the IGM’s views on not awarding grants for IEAs (instead funding and co-ordinating IEAs directly), and understood the need to make this change rapidly to ensure the design phase would align to planned timescales. They felt that the governance structures generally worked effectively, both within the IGM consortium and between the IGM, DCMS and the VCSE Cost of Living Advisory Board. This was seen as important, particularly given the short timescales for setting-up the scheme

[The] way they’ve [DCMS] gone about it is really constructive and positive. They’ve listened to us – things have changed, the original model that everyone anticipated – [for example] they’d [planned to] give a grant [for IEAs], [but it] became obvious that they had to make a rapid change of design [to fund assessors directly] - and they worked with us to make that happen. They were being alive to the need for flexibility.

– Programme partner

Incorporating the learning from CCLF and other schemes: several programme partners involved in the design stage noted that some members of the DCMS EES policy team had worked on CCLF, and could bring their lessons learned from that to the EES

One of the things that has gone well has been ongoing learning lessons from other programmes, so there have been previous programmes [including] the other half of our fund, the CCLF, which was running ahead of this, and all the way through design and development and now delivery, we have been taking lessons from the other programmes, feeding that into our thinking and making amendments and changes accordingly, so I think that’s been a real strength.

– Programme partner

Ensuring funding could be spent quickly: some programme partners highlighted that the partnership worked effectively to get the scheme designed and set-up quickly, in challenging timescales. While, as highlighted in the next section, this caused some issues for the design phase, it was viewed as a positive as it meant the money could be spent as quickly as possible to help support VCSEs with cost of living challenges

2.2.2. What worked less well

Timescales: As highlighted in the previous point, a common theme across the interviews with programme stakeholders was that the timescales for developing the scheme were very tight. The pressure to set-up the programme quickly was heightened by its complexity (e.g. having two phases) and the team having to develop many things ‘from scratch’ (such as the application form and guidance and an approach to recruit and screen assessors). This latter aspect related to there having been no similar scheme previously delivered across England at the same scale. Some programme partners reflected that they would have benefited from having more time to fully get systems and processes in place before launching the scheme, but the timescales meant they had to implement and then adjust the EES design once it had been launched
Limited experience among the team in similar energy efficiency schemes: nothing like the EES had been delivered for the VCSE sector at the speed and scale involved before, and many things needed to be developed from first principles. Programme partners noted that this was a challenge, as some members of the partnership and members of the Advisory Board were relatively new to energy efficiency and there were many ‘unknowns’ about the energy efficiency market (e.g. whether there would be sufficient energy assessors). The consortium approach to the IGM worked well as partners with energy efficiency expertise could input on the design of the programme – without which, some programme partners felt, the partnership may have struggled more

The expertise on this scheme was absolutely on point.

- IGM consortium stakeholder

Mixed views on the level of co-design: although the collaborative approach was seen as a positive, it was clear through interviews with programme partners that there had been mixed views on the expectations around the level of co-design required at the start. For example, interviewees from government felt at times that they were leading the design more than expected, whereas the IGM had not anticipated the level of co-design that would be required at the tendering stage, and subsequently had to input more resource into this than originally anticipated (see Chapter 5)
Identifying the focus and priority measures: several programme partners noted challenges with setting the criteria for the energy efficiency measures that would be prioritised through the EES. In part this related to the aforementioned challenge around managing potential trade-offs between short-term cost savings, or revenue generation, and the longer-term carbon reduction potential of measures. For instance, solar panels could be preferred over fabric-first approaches given their potential revenue generation. However, it was noted that even when focusing on cost savings, there were complexities around how this would be decided (such as how long the payback period should be and whether the most cost-efficient measures could be installed in the timescales available). One programme partner also noted that it was difficult to accurately calculate payback periods for certain measures because they did not have the technical knowledge needed to make this assessment. Establishing the most common measures became clearer as the programme was implemented; however, programme partners noted that the lack of clarity initially meant that messaging around this focus did not trickle down to all assessors undertaking IEAs. As a result, their assessments needed to be revised to suggest measures more in line with the ultimate programme aims

2.3. Assessor recruitment

In December 2023, the IGM advertised an Expression of Interest (EOI) to energy assessors, to join their ‘Informal Supplier List’ (which opened in early 2024). Interested energy assessors had to submit an application to the IGM, which included information about their qualifications and experience. The list was open to individual contractors as well as organisations employing multiple assessors (the latter were only required to provide one application for their organisation, rather than for each assessor). If approved onto the list, the IGM would then match assessors to VCSEs, based on geographic location, how quickly they could complete the assessment, and any specialist skills or expertise required to undertake assessments.

Interviews with energy assessors and programme partners highlighted several key themes relating to the process of recruiting the energy assessors. In general, this worked well as the scheme recruited a sufficient number of assessors across all the regions. However, there was agreement on the aspects that worked well or less well:

Recruitment took longer than expected: Programme partners reflected that the process of recruiting energy assessors had been more challenging than expected, and that it took more time than anticipated to recruit the number of energy assessors needed to deliver the IEAs. Partners suggested that this was due to a combination of factors, including: whether they had ‘set the bar too high’ in terms of qualifications and experience required; the application form length for assessors; and uncertainty as to whether there was demand amongst assessors to do this type of work. One programme partner also noted that they were going into ‘unknown territory’ with going out to recruit assessors, as energy efficiency measures had not been delivered at this scale before within the VCSE sector in England. They noted that because the market was fairly ‘early stage’, eligible energy assessors used different methodologies, terminology, and had different levels of training. Therefore, the IGM needed to send out different messaging to reach this diverse audience. From the assessor perspective, one assessor interviewed reflected that the application process was quite long and they felt that there could have been easier ways to get work, but they wanted to be involved in the programme to work with VCSEs in their local area
Direct approach or word-of-mouth recruitment worked well: Several of the interviewed energy assessors highlighted that they had heard about the scheme directly from the IGM or via word-of-mouth from other organisations they work with (e.g. via an Accrediting Body). There was no evidence that interviewed energy assessors heard about the scheme through other avenues, so there is a potential risk that assessors not well-networked might not have been aware of the EES. Energy assessors appointed to the scheme ranged from large consultancies to individual independent assessors; overall, 76 energy assessors were recruited and delivered IEAs for the scheme. Over half of the assessors (n=39) covered all of England, and there was coverage across all of the regions

2.4. Engagement, application processes and decision-making

2.4.1. Initial communications and outreach

The IGM took different approaches to reaching and engaging VCSE organisations, across the IEA and capital grant pathways respectively. The IGM did more public advertising of the IEA aspect of the EES, using multiple routes, such as via the Advisory Board members, through its own networks and via social media. For the capital grants, there was less public marketing, mainly as it was intended that those with IEAs completed through the scheme would then go on to apply for a capital grant (so there would be a ready pipeline of applicants).^{[footnote 15]} However, the IGM still did some public marketing of both elements, as it was not essential that VCSEs needed an IEA through the scheme (they were able to apply if they had had an IEA undertaken in the past 2 years). In early-mid 2024, the IGM delivered a series of webinars to provide an overview of the EES, the key dates and the funding offer, the eligibility criteria, how to apply for an IEA and capital grant, and ‘top tips’ for grant applications.

Analysis of the survey data for IEA applicants (see Figure 2 below) indicates that VCSE applicants first heard about the EES through three main routes:

Through another membership body/network (22% of successful applicants, 24% of unsuccessful applicants)
Via Groundwork UK or Groundwork Trusts (24% of successful applicants, 16% of unsuccessful applicants)
Through their organisation / a colleague (13% of successful applicants, 15% of unsuccessful applicants)

Around one-tenth of applicants (successful, 9%; unsuccessful, 12%) heard about the scheme from ‘other’ sources. These included funding newsletters from various organisations (including The National Lottery Community Fund, which delivered the CCLF), through different ‘funding finder’ websites, from other charities and through word-of-mouth (e.g. hearing about it informally, from friends).

Only a small proportion of both successful (5%) and unsuccessful (3%) applicants heard about EES directly through formal government channels, such as DCMS, the Gov.UK website, and local government channels (e.g. from their local authority).

Figure 2: How IEA applicants first heard about the EES

Source: EES IEA applicant survey, successful (n=432) and unsuccessful (n=183). Please note, for visual purposes, some categories have been simplified (e.g. ‘from the other IGM consortium partners’). Please see Table 12 in Annex 6 for full findings.

These findings indicate that the approach to marketing the scheme via existing networks was effective. However, a drawback of this was that some organisations that might have been eligible for the scheme that were not well-networked may not have heard about it. Indeed, some independent energy assessors, VCSE interviewees and VCSE survey respondents (in their qualitative responses) noted that it was hard to find the opportunity, and that they felt that it was not advertised widely.

It was about me searching for opportunities rather than seeing an advert on the telly and thinking oh wow we can go for that … and of course that’s significant because it’s got a deadline and we could have missed an opportunity simply because we didn’t know about it.

– VCSE organisation interviewee

Some programme partners likewise noted that, due to the need to design and implement the scheme quickly, there was not much lead-in time for the IGM to communicate the scheme. Interviewees noted that they would have liked more time to market the scheme before the scheme’s launch for IEA applications, to alert potentially interested VCSEs to the scheme and give them some time to prepare before the application period opened. Overall, these factors may have contributed to fewer VCSEs applying for the IEAs than originally expected (see Section 2.3.2). Several programme partners also noted that, in hindsight they may have benefitted from ringfencing more funding for the marketing, for example by offering some payment to membership organisations representing VCSEs led by minoritised groups to advertise the EES on their behalf (e.g. via newsletters). As discussed further in Chapter 5, some of the IGM’s communications budget went towards reimbursement of membership organisations’ time and efforts in sharing information about EES through their networks (e.g. via holding targeted webinars), although some stakeholders questioned the effectiveness of this, as it was used quite late in the scheme’s engagement/outreach phase and attendance at webinars was lower than expected.

Despite these challenges, there was positive feedback on the initial EES webinars. Several VCSE interviewees commented that these provided the necessary information for applying for the scheme. In addition, being able to benefit from the IGM consortium and Advisory Board members’ significant networks meant that word about the scheme got out quite quickly (which was beneficial in the context of short timescales for implementation).

2.5. Application processes

Applications for IEAs opened in December 2023 and closed in late June 2024. Throughout this period, IEA applications were assessed on a weekly basis, via a panel attended by the IGM and an observer from DCMS. Capital grant applications opened in January 2024 and closed in August 2024 (although some VCSE IEA recipients were granted a deadline extension to give them sufficient time to review their IEA reports and make an application). Capital grants were assessed by larger panels that included representatives from the majority of the consortium partners, and also a DCMS observer.

Overall, 1,782 applications for IEAs were submitted (see Chapter 3 for characteristics of applicants). Programme partners noted that this was fewer than expected. Figure 3 provides an overview of applicants’ motivations for applying for the EES. In line with the main intentions for the scheme, around half of successful (48%) and unsuccessful (52%) applicants responding to the survey applied to EES to help lower their energy bills and reduce energy-related costs. Around a quarter (26% successful, and 22% unsuccessful) of organisations applied to enable them to access grant or capital funding. Around a fifth (8% successful and 10% unsuccessful) of organisations applied to make improvements to the building (e.g. for their service users, volunteering environment) and a similar proportion aimed to reduce their carbon emissions. These findings suggest that, while the point in Section 2.1.1 about the balance between cost-savings and carbon reduction is important to highlight, ultimately, given most applicants’ priority to reduce the costs of their energy bills, it seems appropriate that DCMS / the IGM prioritised costs savings over potential carbon reduction in their decision-making for this programme.

Figure 3: Comparison of ‘successful’ and ‘unsuccessful’ organisations’ motivations for IEA application

Figure 3: Comparison of 'successful' and 'unsuccessful' organisations’ motivations for IEA application

Source: EES IEA applicant survey, successful (n=432) and unsuccessful (n=183).

2.5.1. Experiences of applying for an IEA

As Figure 4 shows, overall, applicants were generally satisfied with their experience of applying for an IEA, although – as perhaps is to be expected - successful applicants were more satisfied than unsuccessful applicants. There were also different aspects of applying that VCSEs were more or less satisfied with.

Figure 4: Percentage of applicants satisfied with different aspects of the application process

Source: EES IEA applicant survey, successful (n=432) and unsuccessful (n=183). * base size for successful (n=247) and unsuccessful (n=110). ** base size for successful (n=318) and unsuccessful (n=112). Full results shown in Table 13 in Annex 6.

The aspects that worked most well were:

Information for applicants about the scheme, including information about the aims and objectives of the IEA, and the application form guidance notes and documents.** Interviews with VCSE representatives also confirmed general levels of satisfaction with the information provided to help them fill out the IEA application form
Clarity on the eligibility criteria for applying for an IEA: most successful applicants and just under half of unsuccessful applicants responding to the survey said that they were satisfied with this. This suggests that the IGM was generally successful in communicating about what types of organisations could apply.

The area that survey respondents and interviewees were least satisfied with was:

The level of information required for the IEA application: around one third of successful and unsuccessful applicant survey respondents (see Table 13 in Annex 6) were dissatisfied with how much information they needed to provide. VCSE representatives interviewed generally commented that the IEA application was long, but not too dissimilar from other grant applications, in terms of the level of information they needed to provide. Some interviewees and survey respondents (in the qualitative feedback) also noted that organisations with more experience in bidding for grants – or with the information needed readily available (e.g. those that owned the building and did not have to go through landlords to access key information) – may have been more satisfied with the process than smaller organisations.

I think the amount of information required would deter some of the smaller organisations applying for this level of support. If there was a way of making the application simpler with follow-up support in order to achieve getting all the information that you required, this would have allowed smaller organisations to access [the EES] and not be deterred.

– Successful IEA applicant survey respondent

In terms of specific aspects that worked less well, interviewees found some of the application form questions challenging, particularly in relation to providing the energy usage and spend for a particular time period (October 2022 to September 2023), which did not align to their billing periods.

It was complex having to find all the bills and to scan them all - because the date range of the bills was different to our financial year, then it was difficult to see what the percentage we spent on energy in a financial year was for example.

- Successful IEA applicant survey respondent

Overall, programme stakeholders interviewed were acutely aware of the issues and challenges organisations faced in their IEA application process (e.g. around length, uploading information, inputting data on energy usage and spend for a particular time period) and were sympathetic to the difficulties experienced. However, they also noted that information such as energy usage and spend were of critical importance for informing decisions, and were important for assurance purposes, particularly for ensuring public money is spent effectively. One stakeholder reflected that future, similar schemes could consider building in a pre-application support service (beyond the helpline set up by the IGM for the EES) to provide more hands-on support for organisations less experienced in, or with less capacity to write, such applications (similar to the EnergySharp service).

2.5.2. Effectiveness of EnergySharp

EnergySharp, a post-IEA telephone support service (and introduced in mid-2024) was developed in response to concerns about the quality of the capital grant applications that were submitted early on and following feedback from VCSE applicants that they were finding the capital grant application process complex. It was funded by repurposing some of the spare resource from having received fewer than expected, and budgeted for, IEA applications (see Chapter 5). The purpose of the support team was to help applicants understand their IEAs and other technical aspects, in order to consider whether and how to apply for a capital grant. Applicants would have a 30 minute phone call with a member of the IGM team, to discuss the report and for the IGM team member to respond to any questions the VCSE representative had.

Overall, 208 VCSE organisations (about 18% of those receiving IEAs) made use of the EnergySharp service. Lack of awareness of it may have been a problem. The survey with successful IEA applicants found that almost two-thirds (65%) of 328 respondents were not aware of the service. This is in comparison to organisations who were aware of it and used the service (16%), and those who were aware but chose not to use it (15%). VCSE representatives interviewed generally had not used the EnergySharp service, either because of a lack of awareness or because they felt confident that they could apply for the grant without additional support.

Dealing with funding applications is not a scary process… we were quite experienced to deal with it on our own.

– VCSE representative

Of the organisations that did use the EnergySharp support service (n=51), feedback was markedly positive, with successful IEA applicant survey respondents stating that it was either very helpful (n=25) or slightly helpful (n=24). Most of the VCSE representatives interviewed had not used the service, so there is limited qualitative feedback on the VCSE experience. However, Groundwork UK administered a feedback survey, which 64 service users responded to (31% of all users). The survey and interviews with some EnergySharp users found:

Various types of support were accessed, most commonly (i.e. for over 40% of respondents): advice on applying the IEA to the capital grant application; getting clarity on the capital grant criteria and eligibility; and getting clarity on the capital grant application process. Those VCSE representatives interviewed who had assessed support variously explained how their EnergySharp consultation helped them to assess the amount of grant they applied for and which measures to apply for to get the best return on investment
60 of the 64 users responding to the Groundwork UK survey progressed with a VCSE capital funding application, suggesting that the service was useful for helping VCSEs progress through the EES pathways. In open-text responses to the feedback survey, respondents often noted that the support was useful for answering the questions that they had about the capital grant. There was limited feedback on other support respondents would have found helpful, although suggestions included: ensuring EnergySharp advisors received the IEA report before the call; more information about how the application would be assessed; and recommendations of suppliers to go to for quotes ^{[footnote 16]}

Just having a 1:1 to discuss our application was super helpful. The advisor was excellent and to be honest, it’s [their] clarification that has given me the confidence to apply

–EnergySharp Feedback Survey respondent

There was consensus across programme partner interviews that the introduction of the EnergySharp service had been a success. In particular, those interviewed who were involved in assessing applications felt that there had been an improvement in the quality of applications after the service was introduced.

People just like having someone to talk to, to chat. Just having someone physical to talk to was a massive help. Some had read the guidance and didn’t understand it. Having someone who knew that was really helpful.

– EnergySharp team member

In general, those working on the service felt that it worked well and was addressing a need from VCSEs. The main improvements suggested related to increasing awareness of the scheme and encouraging as many VCSEs as possible to make use of the service, even if they did not think it was necessary, to help sense-check their interpretation of the IEA and their thoughts for applying for a capital grant.

2.5.3. Experiences of applying for a capital grant

Overall, the EES received 761 applications for capital grants. Three-quarters (76%) of the 432 successful IEA applicants responding to the survey went on to apply for a capital grant. For those that did not apply (23%), the two main reasons were due to time constraints: almost half of these organisations (48%) stated this was due to a lack of time to apply, followed by 34% of organisations stating that implementation would have surpassed the cut-off date for completion (see Figure 30 in Annex 6).

Overall, as indicated in Figure 5, both successful and unsuccessful IEA applicants responding to the survey reported that their experience of applying for the capital grant was mixed. On the whole, most organisations answered positively about information on the aims and objectives of the grant opportunity; the webinar held about the grants process; and the guidance notes and documents. This indicates that the provision of information was positively viewed by applicant organisations. Several VCSE representatives interviewed also highlighted the user-friendliness of the form and portal, and welcomed that they could save their applications and return to them, rather than have to complete them in one go.

Figure 5: Aspects of applying for a capital works grant through the EES that survey respondents were satisfied with

Source: EES IEA applicant survey, successful (n=328) and unsuccessful (n=50). For visual reasons, only those responding that they were satisfied are shown here. See Figure 31 and Figure 32 in Annex 6 for the full findings. * Base sizes for this category were 180 for successful, and 27 for unsuccessful applicants. ** Base sizes for this category were 262 for successful applicants and 38 for unsuccessful applicants.

The length of time between submitting an application and receiving a decision was the aspect most negatively viewed by organisations, followed by the amount of information needed to complete the grant application. Interviews with VCSE representatives and programme partners further highlighted the challenges experienced regarding the level of information:

Duplication across application forms: several interviewees highlighted that the capital grant application was long and they had to input the same information that they had already provided for the IEA application. Programme partners noted that the system had been designed to pull through some information, but still some VCSE representatives felt that more could have been done
Time-intensive: there was a view that completing the application was time-consuming for organisations, with this linking to the above point about application forms being long. Some interviewees, whose role was to develop bids, felt that this was to be expected, to an extent. However, several interviewees, whose organisations were volunteer-led, said that they found the application disproportionately long; for example one volunteer said that they spent 12-15 hours on the application, which represented a lot of volunteer time
Limiting the need for attachments: several programme stakeholders noted that the use of attachments should be limited as far as possible, as they felt that potential applicants could see this as an additional administrative burden and potentially put them off the application process. Indeed, several VCSE representatives commented on the high number of attachments required (e.g. utility bills) and wondered if they could instead provide a summary of costs. However, this may not have been sufficient for assurance purposes

2.6 Decision-making

In general, programme stakeholders felt that the application and decision-making processes worked well, although there was also broad agreement on aspects that worked less well:

2.6.1 What worked well

Training for assessors: those stakeholders interviewed who were involved in assessing applications before they went to panel felt that Groundwork UK provided a lot of support, including training and guidance for assessors, ongoing updates, and support through a dedicated Microsoft Teams channel, which enabled assessors to share their experience and problem-solve if they had tricky applications to assess
Weekly panels for applications: several programme partners involved in the process noted that having weekly assessment panels worked well, both to help support fast decision-making on applications and to help manage the flow of applications. The initial assessments completed were seen to facilitate the panels, as panel members already had a summary of the application, and had guidance on what aspects needed further review
Multiple partners on the panel: Stakeholders noted that the involvement of DCMS in the decision-making process for applications was very helpful, as they would sense-check and pick up any inconsistencies in decision-making. Similarly, they highlighted that having the energy experts from the IGM on the panel was very helpful for assessing the capital works grant applications in particular, as they were able to draw on their expertise to assess VCSEs’ project delivery plans, and identify any key risks or potential issues with them

2.6.2. What worked less well

Balancing the criteria used to assess the applications: Several programme stakeholders noted some challenges with the criteria used in assessing applications and their potential implications. For example, initially the partners involved in the assessment panel focused on organisations that were spending 5% or more of their total costs on energy bills. However, they soon found that this criterion favoured organisations that might have had relatively low costs overall, but energy made up a large proportion of this (e.g. for village halls, that mainly rent out their space). In contrast, those organisations with high expenditure elsewhere (e.g. on emergency supplies for their beneficiaries) may still have been experiencing high energy bills, but these made up less than 5% of their total expenditure. The assessment panel partners therefore relaxed this criterion for subsequent applications. Other stakeholders noted challenges with ascertaining what ‘critical frontline services’ meant and how to assess this (i.e. what types of services were in or out of scope)
Quality of early capital grants applications: another theme was that the quality of early capital grants applications was poor. Specific challenges included missing responses in the application form, short responses and applications from organisations not in scope (i.e. those not delivering frontline critical services). Additionally, several stakeholders noted that some of the capital grants applications were very time-consuming to assess, particularly if there were certain conditions in place affecting project delivery, such as building ownership complexities

In terms of feedback from VCSE representatives, the timelines for hearing a decision after submitting their application was the area of the process that they were least satisfied with, particularly for the capital grant process (as shown in Figure 5). Several VCSE representatives interviewed described how there had been delays to the notification of their decision, which had then impacted the timescales that they had for delivery (although the scheme was later extended, for those experiencing unforeseen delays, to July 2025).

For unsuccessful IEA applicants surveyed, over half (55%) of the 183 survey respondents considered the feedback on their IEA applications to be ‘not useful at all’. For unsuccessful capital grant applicants surveyed, just under two-thirds (61%) of 199 respondents ^{[footnote 17]} said that the feedback was ‘not useful at all’. This is probably because feedback was grouped into several categories,^{[footnote 18]} rather than being tailored to the specific organisations. Programme stakeholders interviewed highlighted that there was insufficient resource available to provide individualised feedback to applicants, even though they would have liked to. However, as far as possible they tried to signpost unsuccessful applicants to other available funding sources.

Question 4

3.0 Process evaluation: delivery

Accepted Answer

This chapter focuses on the effectiveness of the delivery of the EES. It discusses the reach of the scheme, the effectiveness of IEA delivery, the effectiveness of capital grant delivery, and views on overall grant management.

Key findings

Overall, 64% (1,147) of IEA applications were approved. 41% (311) of capital grant applications were approved. The characteristics of successful organisations were as follows:

Most were based in the North West, South East, South West and Yorkshire and Humber regions, and were small-and-medium sized organisations and delivered frontline services directly (rather than only managing a ‘hub’ for other VCSEs to deliver from)
There was an equal balance of renter and owner-occupier applicants; most VSCEs were based in buildings over 20 years old (1/3 were over 100 years old), and most had an ‘average’ energy efficiency rating for their organisation at the point of application
There was large variation in the energy usage data across VCSEs, although around 30% estimated using over 100,000 kWh per year. The average (mean) proportion of annual expenditure on energy was 12.3% amongst IEA recipients, and 11.7% among grant recipients

In terms of IEA delivery, evidence suggests that VCSEs had a generally positive experience. They were most satisfied with their energy assessor’s expertise and professionalism; how long they waited for the IEA to take place once their organisation was approved for one; and how easy the energy efficiency recommendations were to understand. VCSE representatives were less satisfied with the type of recommendations included in the report and the overall quality of the reports. Programme partners also flagged concerns about the variability of the quality of reports, with some needing to be re-done.

Across the 1,147 completed IEAs, 5,375 recommendations for energy efficiency measures were made. Most recommendations were for solar panels, LED lighting installation, insulation improvements, and heating system upgrades or replacements. ‘No-cost’ behavioural measures were also recommended, such as staff and volunteer training, temperature monitoring, shifting operations to off-peak hours and regular monitoring and reporting on equipment and energy consumption.

It was possible to conduct an early assessment of capital grant delivery (although delivery was ongoing at the time of reporting). For those trying to begin their projects, there were a number of factors affecting delivery, including: late IEA reports delaying their capital grant application and shortening timescales for delivery; challenges with sourcing suppliers to install measures; delays relating to gaining planning permissions or identifying an unexpected need for planning permissions (which in a minority of cases led to increased costs for additional works to ensure compliance); capacity-related challenges for taking on project management of the installations; and factors such as poor weather or identifying unexpected issues (e.g. asbestos) that subsequently delayed delivery.

For the 311 organisations (out of 329) that we had data for at the point of analysis, a total of 1,216 separate measures were funded through the EES, with £18,880,646 of funding awarded to pay for these. Most funding went to solar panels, insulation improvements, LED lighting installation, heat pumps, window, glazing and door upgrades, and heating system upgrades.

Feedback from programme stakeholders indicated that grant management processes generally worked well, with the IGM seen to be effective in its role and in its communications with VCSEs.

3.1. Scheme reach

Overall, the EES received fewer IEA applications (and made fewer awards) than originally anticipated, but the capital grants element was oversubscribed:

Of the 1,782 applications for an IEA, 1,147 (64%) IEAs were approved
Of the 761 capital grant applications made, 311 (41%) applications were approved

Figure 6 below shows the flow of applicants through the EES. It indicates that the most common pathway through the EES was securing an IEA first, before going on to apply for a Capital Grant.

Figure 6: Flow of applicants through the EES

Source: Management Information data from Groundwork UK for IEAs and Capital Grants. See Table 16 in Annex 6 for underlying data.

In terms of the characteristics of organisations reached by the EES:

Most IEA and capital grant recipients were based in the North West, South East, South West and Yorkshire and Humber regions. Applicants in the South of England were more likely to be unsuccessful in their applications (see Figure 7)

Figure 7: IEA and grant recipients and unsuccessful applicants, by region

Source: IEA and capital grant application data (provided by Groundwork UK). IEA recipients (n=1,147); Grant recipients (n=311); Unsuccessful applicants (n=450)

In line with the objectives for the scheme. the majority of successful applicants for IEAs and capital grants were small and medium-sized organisations, with 75% of capital grant recipients from medium-sized organisations (see Figure 8). Larger and ‘super-major’ VCSEs were more likely to be unsuccessful in their capital grant applicants, which was in line with the priorities of the scheme. The average number of FTE staff and volunteers for IEA recipients was 45 and 105 respectively, and for grant recipients 9 and 45 respectively (see Table 14 in Annex 6)

Figure 8: IEA and capital grant recipients, and unsuccessful recipients, by size

Source: IEA and capital grant application data (provided by Groundwork UK). IEA recipients (n=1,147); Grant recipients (n=311); Unsuccessful applicants (n=450)

In relation to service delivery, as shown in Figure 9, around half of IEA and grant recipients both managed a building that operated as a hub for frontline delivery by other organisations and directly delivered frontline services to people from a building. Overall, only a small proportion of recipients only managed a hub, suggesting that the majority of applicant VCSEs delivered their own frontline services. 67% of IEA recipients provided targeted services (e.g. to specific groups such as disabled people, young people under 25, older people over 65, people who are educationally or economically disadvantaged), while 69% of grant recipients reported that their organisation was open to everyone (i.e. not targeted)^{[footnote 19]}

Figure 9: Whether VCSEs delivered directly or manage a hub

Source: IEA and capital grant application data (provided by Groundwork UK). IEA recipients (n=1,147); Grant recipients (n=311); Unsuccessful applicants (n=450)

In terms of the characteristics of the buildings of IEA and capital grant applicants and recipients:

Figure 10 shows that that the breakdown of IEA and grant recipients was roughly equal by building tenure (i.e. a similar proportion were renters to owner-occupiers)

Figure 10: VCSEs by tenure

Source: IEA and capital grant application data (provided by Groundwork UK). IEA recipients (n=1,147); Grant recipients (n=292); Unsuccessful applicants (n=359)

Most IEA recipients’ (86%) organisations were based in buildings that were over 20 years old, with over a third of IEA recipients (34%) occupying buildings over 100 years old. Only 10% were based in buildings less than 20 years old (see Table 15 in Annex 6).^{[footnote 20]} Indeed, one of the IEA assessors interviewed noted these older buildings were often more likely to be at risk of going into decay, had been built with no or little consideration of energy efficiency, and had experienced minimal maintenance over a long period of time. Therefore they usually had a high need for support
Current and potential Energy Performance Certificate (EPC) ratings were available for around 75% of VCSE beneficiaries. As can be seen in Figure 11, around a third of IEA and capital grant recipients had a current EPC rating of ‘D’, indicating average energy efficiency for a building.^{[footnote 21]} Over 40% had an EPC potential of ‘B’, should the recommendations in the IEA be implemented, indicating that the IEAs provided VCSEs with information about what improved they could make to improve their EPC rating. There was no clear pattern indicating that those with worse EPC ratings were more likely to receive capital grants, nor any pattern relating to their EPC potential

Figure 11: IEA and capital grant recipients’ EPC ratings

Figure 11: IEA and capital grant recipients' EPC ratings

Source: IEA and capital grant application data (provided by Groundwork UK). IEA recipients (n=839); Grant recipients (n=227)

In terms of energy usage:

Figure 12 shows the large variance in energy usage data across the IEA and capital grant recipients. It shows a small proportion of VCSEs estimated that they used less than 500kWh/year, which is likely to be erroneous data, as this is very low usage. Around 30% of recipients estimated using over 100,000 kWh per year

Figure 12: Estimated annual energy usage per year (kWh)

Source: IEA and capital grant application data (provided by Groundwork UK). IEA recipients (n=1.142); Grant recipients (n=361)

The average proportion of annual expenditure on energy was 12.3% amongst IEA recipients, and 11.7% among grant recipients.^{[footnote 22]} However, the significant variation in this (see Figure 33 in Annex 6) mean that few conclusions can be drawn around the optimal proportion of expenditure on energy when awarding IEAs and grants to VCSE organisations

3.2 IEA Project Delivery

3.2.1. VCSEs’ experience of energy audits

Overall, as shown in Figure 13, the 432 respondents to the successful IEA applicant survey had a generally positive experience of the IEA delivery.

Figure 13: Organisations’ experience of the delivery of the IEA

Figure 13: Organisations' experience of the delivery of the IEA

Source: EES IEA applicant survey, successful (n=432)

Aspects that survey respondents were more satisfied with included the energy assessor’s expertise and professionalism; how long they waited for the IEA to take place once their organisation was approved for one; and how easy the energy efficiency recommendations were to understand. Some VCSE interviewees described how they had learned a lot about their building through the process, and welcomed assessors’ use of technology (e.g. thermal imaging) to provide a robust analysis of their building’s needs. Several people commented on how the recommendations were clear to them, and that the assessor took the time to answer any questions they had to ensure their full understanding.

The report that came back was easy to understand. It was quite clear what the recommendations were. I think they offered us some time if we wanted to speak to them again after the report to clarify some points.

– IEA assessor

However, aspects that VCSE survey respondents were less satisfied with were the type of recommendations included in the report and the overall quality of the reports. These themes came through strongly in VCSE representative and programme partner interviews. Several representatives interviewed highlighted errors with the types of recommendations, which they felt were not suitable for their building. For example, one person said that their report did not include recommendations relating to lighting (even though 170 lights needed replacing with LED fixtures), heating (the need to replace radiators was not noted) and solar panels (far fewer panels were recommended than the capital grant-funded project eventually installed). Another VCSE representative felt there was a strong bias towards heat pumps in their report, which was not the measure they felt they needed (indeed, they went on to secure capital grant funding for on-demand infrared heating). Programme stakeholders also highlighted concerns with the quality of IEA reports, noting there was significant variation across assessors (see Section 2.1.1) and that the IGM had to intervene to request reports be re-written to the expected quality.

VCSE representatives interviewed had a mixed experience with assessors. Some described how assessors had supported them throughout the IEA process, whereas others had a poorer experience. Some VCSE representatives, for example, disagreed with their assessments and commented on the poor communication or perceived lack of effort shown during the assessment.

I could do with greater clarity when we’re going to get these assessment reports and what we would expect them to look like broadly. I think certainly some monitoring, by Groundwork, about how speedily they’ve gone through, because Groundwork will be paying these private companies, which is taxpayers’ money. It needs to be used as efficiently as possible.

– VCSE lead

Conversely, other representatives provided positive feedback, noting that assessors were quick to respond, provided all staff present with guidance around best practice, highlighted both the challenges and opportunities for their sites, and were efficient.

…the assessor was good and competent. He provided a very quick and detailed report with thoughtful recommendations.

– VCSE lead

3.2.2. IEA assessor experience

In terms of delivering the IEAs, energy assessors interviewed were broadly in agreement that VCSEs were receptive to advice being provided and showed a keen interest in improving their building quality.

The [number of] organisations [I conducted IEAs for] have been ideal clients.

– Energy assessor

Some assessors noted having a lack of clarity around assessors’ criteria for assessment from the IGM, which made it difficult to understand what types of recommendations would be ‘in scope’ for the EES (e.g. a prioritisation of measures that would produce greatest cost-savings). In addition, the timing of implementing capital measures (initially) by mid-February 2025 was very ambitious from assessors’ point of view.

[VCSEs] need more than 12 months to implement the measures. They need two years at least.

– Energy assessor

Overall, the energy assessors interviewed were generally positive about their experiences of communicating with the IGM, noting that the on-boarding process had been fairly smooth and quick. In particular, energy assessors highlighted that accessing application data for their allocated VCSEs worked well, so they felt well-prepared for their assessment.

It all went seamlessly, really. To be honest, I think Groundwork were very good. They were a bit overwhelmed when we first contacted them, but the actual process of us being able to bid for the work, being approved and then them sending us the access [to details] was great… so as soon as Groundwork have connected us with the applicants, it was very easy for us to be able to then secure a date and go along.

- Energy Assessor

In most cases, energy assessors were also positive about their initial communications with VCSEs, noting that VCSE representatives generally appreciated that they could receive advice, learn about the energy efficiency of their building, and receive guidance on how they could make improvements. In some cases, energy assessors noted that they had challenges with reaching VCSEs – such as incorrect phone numbers, or not getting a response – but they informed the IGM of these, which would then respond and try and make contact.

3.2.3. Recommendations made

Across the 1,147 completed IEAs, a total of 5,375 recommendations for energy efficiency measures were made. The most commonly recommended measures were solar panels (in 80% of IEAs), LED lighting installation (61%), insulation improvements (56%) and heating system upgrades or replacements (45%) (see Figure 34 in Annex 6). Many of VCSE stakeholders interviewed highlighted the poor state of the fabric of their buildings (e.g. cladding, insulation etc) and noted a need to improve the insulation of their building first, before installing other energy efficiency measures such as heat pumps.

Figure 14 below breaks down the cost per measure for the 15 most popular recommendation types, which together represent 91% of the recommendations made in the IEAs. Despite being the fourth most commonly recommended measure, heat pumps represented the most expensive category, with an estimated cost per measure of £86,988. The other most commonly recommended measures, solar panels and LED lighting installations, were typically cheaper, with an average estimated cost of £27,563 and £14,264 respectively.

Figure 14: Cost per measure by IEA category

Source: IEA report data (n=1142)

Alongside recommendations on the energy efficiency measures that could be installed, some IEA assessors also recommended ‘no cost behavioural changes’ that VCSE staff, volunteers and beneficiaries could make to help improve the energy efficiency of the building. These were reported qualitatively, and the main recommendations suggested through the IEA reports were:

Staff and volunteer training on induction and regular refresher courses on energy conservation and carbon reduction to promote awareness
Temperature monitoring, such as setting thermostats between 18°C and 21°C
Switching off heating, lighting, equipment, and shutting doors and windows when not in use
Shifting operations to off-peak hours to minimise energy costs
Signage across the building for energy efficiency and sharing energy-saving tips via emails, posters, or newsletters to promote awareness
Appointing staff member(s) to have responsibility over the management of energy efficiency. One of the responsibilities could be to develop an “Energy-Saving Policy”. These would clearly outline expectations for employees regarding energy consumption
Regular monitoring and reporting on equipment and energy consumption

The list provided above is non-exhaustive but were some of the main recommendations provided in the IEAs. Several IEAs also provided a percentage energy savings figure alongside the implementation of these measures with various ranges.

We typically see an energy reduction of between 2-7% with this behavioural change. – VCSE Energy Assessor

Ensuring all doors and windows are closed when not in use can reduce the heat loss from the property and therefore reduce the load on the heating system saving carbon and energy, typically this would result in improvements from 2-5% – VCSE Energy Assessor

… someone who turns all the lights off if people are no longer using a room and controls the heating program so the heating is not on when not needed. This can be encouraged further with signage and staff inductions. Typically, the energy reductions we see with the behavioural change is 3-7% – VCSE Energy Assessor

Train staff and introduce signage to notify staff to switch off process equipment when it is not in use. Encouraging these behavioural changes typically leads to an energy reduction of around 5-7%. – VCSE Energy Assessor

There is variation in the percentage of energy savings these types of measures can achieve, but they can create considerable amounts of savings depending on the type of VCSE (e.g. large buildings, high building use) implementing these changes (estimated by assessors at between 2-7% savings). These types of energy savings will be beneficial for VCSEs that operate from a lower baseline and high energy costs compared with VCSEs that have a good level of awareness and strategies already in place, and for which energy costs make up a smaller proportion of their total overheads. Indeed, the survey with successful IEA applicants found that around 40% of the 432 respondents said that their IEA did not recommend any ‘no cost’ behavioural measures. We discuss the outcomes of these recommendations in Section 4.1.2.

3.2.4. What would have happened in the absence of getting an IEA through the scheme

From the survey, there were mixed indications that if successful IEA applicants had been unsuccessful that they would have pursued an energy audit anyway, through other means. Around 45% of the 432 respondents said it would have been unlikely that they would have, whereas 40% said it would be likely (see Figure 35 in Annex 6). Some VCSE representatives interviewed noted that they would have either gone without an IEA, explored getting a less detailed IEA (e.g. one person noted that they could get one via their local council, as their organisation leases a building from the council), or would have looked for alternative (external) funding sources.

For unsuccessful applicants surveyed (n=183), only 13% had gone on to have an IEA undertaken, although 32% had sought energy advice in other forms.^{[footnote 23]} For the 24 respondents that went on to have an IEA undertaken, 9 paid for the IEA themselves. Respondents often went on to explain (in an open text response) that their organisation was keen on improving its energy efficiency and that they wanted to reduce ongoing costs for their organisation.

Irrespective of grant funding we are committed to reducing our carbon footprint and want to direct our limited resources in the best way.

– Unsuccessful IEA applicant survey respondent

14 unsuccessful applicant survey respondents noted that they had secured funding elsewhere (e.g. from their local council, or from local Groundwork organisations) or via another scheme (e.g. in a competition).

[We applied sought further energy advice] because we wish to improve our property for users, reduce bills and the energy consumption.

– Unsuccessful IEA applicant survey respondent

Overall, these findings indicate that most VCSE organisations that were unsuccessful in applying for an IEA under the EES did not subsequently seek an IEA in the short-term. Qualitative evidence suggested that the cost of doing so acts as a discouragement and most would therefore be reliant on funding via schemes such as the EES. That said, there was a strong theme across qualitative feedback in the unsuccessful IEA applicant survey that organisations are committed to improving their energy efficiency, reducing their bills, and increasing the comfort of their spaces, suggesting continued demand for further energy efficiency advice support.

3.3 Capital grants project delivery

At the time of the survey (November-December 2024), not all capital grant activity had started, and at the time of reporting, not all activity had finished, meaning this following section provides a snapshot of how delivery has gone so far, rather than a full analysis. This is highlighted in the survey data:

Of the 382 successful IEA survey respondents that went on to apply for a capital grant, over half (52%) were successful (with 2% not knowing the outcome at the time of the survey)
Almost 60% of the 171 successful capital grant respondents stated that the energy efficiency measure installations had not started, mainly because the planned start date had not happened, or because they had only found out they had been successful around the time of the survey. One-third of organisations (34%) stated that the installation was not complete but was in progress. Only 6% of respondents said that their organisations had completed their installations at the time of the survey, meaning there was limited evidence on their experiences and outcomes post-installation (see Figure 36 in Annex 6)

3.3.1. Effectiveness of the Capital Enabler service

As part of the EES offer, the IGM developed a ‘Capital Enabler’ support service. After each capital grant application assessment panel, the Centre for Sustainable Energy (one of the IGM consortium members) emailed every successful VCSE (capital grant applicant) to notify them of the Capital Enabler service, outlining the type of support (e.g. technical support, engagement of suppliers, reviewing quotes) on offer. VCSEs would then decide if they wanted the support (although some projects that were assessed as being ‘higher risk’ (e.g. due to the cost of project, or timelines for implementation) were automatically assigned a Capital Enabler). Those opting for support had an initial 30 minute phone call to identify their specific needs, and then further support as and when needed (e.g. phone calls or email correspondence).

Of the 171 capital grant recipients responding to the survey, nearly two-thirds (60%) found the service useful (with a third finding it ‘very useful’). None of the VCSE stakeholders interviewed reported using the Capital Enabler service, so there is limited qualitative evidence on what worked well or less well from their perspective. However, programme partners involved in delivering the service felt that it had generally worked well, with variable levels of support required by VCSEs. They noted that the main areas of support provided related to reviewing quotes and needing support with project management.

In terms of what could be improved, stakeholders noted that while the process generally worked well and would do so for future schemes, with some increase in lead-in time, they would ideally have implemented a Customer Relationship Management system to manage the various ‘cases’ open to Capital Enablers. This was noted as having the potential to reduce the amount of administration time required by staff.

3.3.2. Experiences of delivering capital grant projects

Interviews with VCSE representatives and programme stakeholders provided details on how the implementation of projects had gone, once organisations had been notified of their success:

Starting projects: Several capital grant recipients noted how delays to getting their energy assessment report meant that their window for applying for, and then delivering, their project had been shortened. Some noted that this had caused stress. Timescales for delivery were – for some projects – extended to end by July 2025
Sourcing suppliers: Organisations were required to submit several quotes for suppliers as part of their capital grant application. While some organisations were able to secure their preferred contractor straight away, many VCSEs found it challenging to secure a contractor to undertake the works. Several factors contributed to this, including:
- Many projects received notification of funding in late-Autumn, meaning that they were trying to engage suppliers around the Christmas and New Year period, when many had little availability or were working reduced hours
- Challenges in identifying suppliers for specific types of measures, due to a shortage of specialists (in the specific measures) in the local retrofit sector, or because the installation costs were relatively low (and therefore may not have been prioritised by suppliers). The IGM tried to overcome these issues by changing the requirements from 3 quotes to 2, and capital enablers could provide organisations with a list of potential suppliers they could contact
- Some renegotiation of grant amounts needed to happen with Groundwork UK before work could continue (e.g. because costs had risen since the original application, or recipients had to source new quotes). This meant, in some cases, that the process of contracting a supplier was delayed
- Slow responses from potential suppliers to VCSEs’ queries about their availability, or no response at all

Two [cavity wall contractors] came straight away and quoted, the third… there were about four companies who promised to come and never showed up.

– VCSE representative

Gaining planning permissions: several VCSE representatives highlighted the need to secure planning permissions before their work could start. For a minority, this was unexpected. For example, one VCSE representative noted that the measure they secured funding for (heat pumps) required planning permission, the outcome of which created an unforeseen expense of £16,000 for the charity, as they were required to install further measures to reduce the sound of the heat pump, which was not covered by the EES. Even where this was expected, the planning application process took up a lot of time and squeezed timescales for delivery. One stakeholder suggested that future schemes could explore better alignment with local authorities to try and expedite application assessments for those on the scheme

Going forward, I would like to see grant funders working really in collaboration with local authorities to support.

– VCSE representative

Project management: while some of the VCSE organisations had dedicated staff for managing their capital grant projects, others had limited capacity and struggled with the project management time required. This was more challenging for those new to engaging with suppliers and managing building works

That’s time then I can’t give to other aspects of the organisation and I think in the not-for-profit sector we’re so stretched. There is just no spare capacity, so you know I’m paid for three days a week, but I work six days a week and I do it because I want to deliver this project. But that’s not very sustainable and it shouldn’t have to be the way that it is.

– VCSE representative

Factors further delaying activity: some VCSE interviewees and programme partners noted that the timing of capital works projects (winter months) meant that inclement weather had a big impact on the ability for some works to be installed (e.g. solar panels when conditions were very wet and/or windy). Programme partners also noted some cases where the preparations for installing measures identified significant issues (e.g. presence of asbestos) that needed to be addressed first before any energy efficiency measures could be installed. These factors contributed to delays in some projects

However, once works could begin, overall, for those VCSE representatives (n=66) whose projects were in delivery or had completed at the time of the survey (November-December 2024), their experience of EES energy efficiency installation measures was positive, as shown in Figure 15. Given low sample sizes for some of the answer options, it is difficult to compare levels of satisfaction across elements, although a higher proportion of respondents were satisfied (than not) on the extent to which their views on the installation were considered; the quality of the installation; the effectiveness of the improvement; and the time it took for the installer to complete the work.

They [the supplier] turned out to be very, very good and very professional. I would recommend them to anybody.

– VCSE representative

Figure 15: Organisations’ experience of installing EES energy efficiency measures

Figure 15: Organisations' experience of installing EES energy efficiency measures

Source: EES IEA applicant survey, successful (n=66).

Overall, evidence available at the time of reporting suggests disruption to service delivery during the installation process was limited. Regarding installation of EES energy efficiency measures, almost two-thirds (64%) of the 66 survey respondents said that it had no impact on service delivery. Of the 19 organisations that did state there was (or would be) an impact on their ability to maintain service delivery, the estimated time that service delivery would be impacted for was between one day and seven days (42%). Interviews highlighted varied, but generally positive, experiences. For example, one community hub organisation, which was having window and window frame replacements throughout the building, experienced some disruption, although the suppliers were supportive in fitting in their work time around the organisation’s service delivery times. In another case (a day-time winter shelter service open for 11 hours per day), the suppliers were able to fit in the lighting installation during the evenings. However, at the time of the interview the organisation was still figuring out logistics for replacing windows.

3.3.3. Measures funded

For the 311 organisations (out of 329) that we had data for at the point of analysis, a total of 1,216 separate capital measures were funded through the EES, with £18,880,646 of funding awarded to pay for these. Information on the type of capital measures for which grants were awarded was provided as free-text responses in the management information. We therefore matched these to the 33 categories used in the IEAs. Not all grant items could be matched to IEA categories, as their descriptions contained no information about the purpose of the funding, although this issue related to less than 1% of the total grant value.

Overall, as shown in Figure 16, the majority of funding (£14.7 million) was awarded across 6 categories of measure: just under a third (30%) of funding was awarded for solar panels, 14% for insulation improvements, 12% for LED lighting installation, 9% for heat pumps, 7% for window, glazing and door upgrades, and 6% for heating systems upgrades.

Figure 16: Total value of grants (£) awarded by category

Source: Management information from Groundwork UK (Capital measures, n=1,216). Note, this is for the 311 organisations (out of 329) that we had data for at the point of analysis.

Figure 17 below compares IEA recommendations and grant awards by category of measure. ‘Other’ includes categories which each represent less than 1% of recommendations, as well as grants that could not be matched to IEA categories.

The broad trend is similar: the most common IEA recommendations were also those that were most often funded. However, lighting and insulation improvements represent a larger proportion of grant measures than IEA recommendations, and less commonly recommended measures such as batteries, mini-split Heating, Ventilation and Air Conditioning (HVAC) systems, and point of use water heaters attracted disproportionately less funding. Hardware relating to heating (e.g. heat pumps and system upgrades) were also less commonly funded, whereas temperature controls were over-represented by grant approvals. This is likely to be due to the practical challenges of large hardware installations, as opposed to smaller control devices.

Figure 17: Comparison of IEA Recommendations and Capital Grants Awarded

Source: Management information from Groundwork UK (Capital grants, n=1,216, IEA recommendations, n=5,375)

3.3.4. What would have happened in the absence of getting capital grant funding through the scheme

In the absence of capital grant funding, 63% of 168 surveyed successful capital grant recipients stated that they would not have paid to install one or more of the energy efficiency measures that had been covered by the scheme. Only 9% stated that they would have and 28% of organisations did not know. Many applicants to the IEA stated that they were prioritising delivery of vital frontline services for those experiencing cost of living challenges, over building / structural works. This indicates a clear financial need for capital funding to support the installation of energy efficiency measures for VCSE organisations, alongside continued support for service delivery.

Of the 15 respondents who stated that their organisation would have paid to install one or more energy efficiency measures, 7 said this would have been through another grant scheme, and only 5 said that they would use income or reserves.

Aside from the EES programme, just over half of the successful IEA survey respondents (52%) said their organisation had not installed other energy efficiency measures to the building. Around 40% of respondents said that they had. In open text responses, respondents noted that they had used a range of funding sources to cover the costs of other energy efficiency measures, including:

Grants from foundations or other grant-making bodies
Other UK Central Government funding (e.g. UK Shared Prosperity Fund, Rural England Prosperity Fund)
Energy suppliers
Self-funded through reserves or donations; and
Local authority or parish council funding pots

For unsuccessful IEA applicants, similarly, the majority of respondents (65% of 182) had not installed energy efficiency measures since applying to the EES. However, around a third (35%) had installed measures. Of these 63 organisations, LED lighting installation was the most common (n=29); followed by window, glazing and door upgrades (n=17); and solar panels (n=14). More than half (n=37) of these organisations paid for it themselves, via income or reserves, and 22 accessed funding via another scheme.

3.4. Overall effectiveness of grant management

Feedback from programme stakeholders indicated that grant management processes generally worked well. In particular, it was noted that there has been good collaboration – facilitated by constructive feedback – across the programme partners in the delivery of the scheme. DCMS stakeholders described Groundwork UK’s overall management of the IGM consortium as very good; for example, one noted that while the project delivery phase had been challenging due to the timescales, Groundwork UK had a detailed knowledge of the progress of all projects, and were regularly assessing the risk of projects completing, and being proactive in trying to mitigate risks (e.g. regular progress meetings via capital enablers for higher-risk projects). This view was also reflected by representatives from the IGM consortium partners, who described the positive level of communications from Groundwork UK and the clarity provided from the team.

I just feel the support from Groundwork’s team was really, really good, and very consistent, and I know they’ve worked very hard on that.

– IGM Consortium member

A minor challenge noted was that some stakeholders felt the level of sign-off required for some aspects (such as approving communications about the scheme) was quite high and added to the time pressures they faced in delivering the scheme.

From the VCSE perspective, feedback across the surveys (see Figure 3 and Figure 4 in Section 2.4) about the support and communications offered was likewise generally positive. Qualitative evidence from interviews indicates that, while some VCSE representatives found the engagement generally worked fine, several VCSE representatives highlighted challenges in communicating with the IGM during the IEA process, such as not receiving responses to queries, incorrect information being displayed on the portal, and dates for IEA assessments being changed. However, despite this, evidence from interviews with VCSE representatives accessing a capital grant was generally positive, with interviewees highlighting timely communications and helpful responses to clarifications.

I can’t say enough great good things about them to be honest. They were really helpful throughout the application and have been ever since.

– VCSE representative

Question 5

4.0 Outcomes and expected impacts

Accepted Answer

This chapter assesses the outcomes as specified in the ToC for the EES. At this stage in the evaluation some early indications hint at the potential for these outcomes to be achieved. Evidence has been reviewed from interviews with VCSEs, EES IEA applicant surveys (successful and unsuccessful), MI data analysis as of end January 2025, and impact analysis using Bayesian Process Tracing (BPT). These sources have been triangulated to inform the insights in this chapter.

Key findings

Overall, some positive indications have emerged to show that the EES is on track for achieving some of its intended outcomes (reflected in the scheme ToC) across both the short and longer term horizons. In most cases however, it may be too early to comment given the grant funding has not been fully distributed and almost all of the VCSEs (98.7%) were still in the process of installing their capital measures. In these instances, the evaluation has instead collated VCSEs’ expectations of outcomes.

Short term outcomes

Improved knowledge of energy efficient practices: Broadly speaking, the evidence suggests that the EES has positively influenced energy efficiency knowledge creation across the VCSE IEA recipients. BPT impact analysis adds further weight to the collected evidence, finding a 68% likelihood that the EES IEAs supported VCSEs to improve their knowledge of energy efficient practices. Several unsuccessful IEA applicants also noted that progressing through the IEA application process helped them improve their knowledge of energy efficiency practices – a wider outcome for the EES. There were a small number of VCSEs, that noted the EES had little impact on their knowledge of energy efficiency practices.

Energy efficient consumption: At this stage, there is no clear evidence that EES has led to more energy efficient consumption. This is because not enough time had elapsed by the time of reporting to observe this. BPT impact analysis found the evidence to be equally as likely to support or not support the hypothesis that the EES helped to reduce energy usage. Survey evidence similarly found that most respondents either had not seen a change in usage or did not know at that stage if their usage had fallen (reflecting that it was probably too early for any impacts to have fed through). Most VCSE representatives interviewed acknowledged it was too early to comment on energy consumption changes. Some VCSE representatives were hopeful that solar panels (one of the most commonly-funded measures through the EES) will help them to generate surplus energy that can be sold to the national grid and become a future source of revenue generation

Energy bill savings: Any impact of the EES on energy bill savings was unclear. Survey evidence was limited, with over 60% of IEA recipients noting either no change in bills or that they did not know if there had been any change. BPT impact analysis signalled similar uncertainty around energy bills, indicating no change in the likelihood (compared to prior beliefs) that the EES IEA process contributed to a reduction in their energy bills, post IEA. Given the timing of the survey, it may have been too early for impacts to have fed through, with VCSEs having only completed their IEAs. VCSE interviewees, however, indicated they expected savings to be generated. Capital measures, unsurprisingly, are expected to be the main source of energy bill savings, particularly through solar panel installations and heat pumps.

Medium to longer-term outcomes/ impacts

Most VCSE representatives interviewed expected that the EES would support outcomes relating to financial resilience, service delivery and working conditions in the future. Evidence from IEA and capital grant applications, and from interviews, likewise indicated that most VCSEs expected measures to support financial resilience and service delivery. Energy bill savings were expected to ease financial pressures, and to help build up (or reduce reliance upon) their financial reserves. Most VCSE representatives interviewed also expected service delivery to be expanded because of installations. This was primarily due to the ability to keep premises open for longer periods of time. Limited evidence was provided on working conditions; however, a few VCSE representatives did note an immediate positive impact in terms of warmer premises. Overall, however, it is still too early for impacts to be definitively assessed.

4.1. Short term outcomes

Evidence to date indicates that VCSEs have improved knowledge of energy efficient practices. Other short-term outcomes, such as energy efficient consumption and energy bill savings, are less clear at this stage of the evaluation, as it is likely too early for these outcomes to have emerged, given capital measures for most grantees were still being installed. In some instances, capital grantees were still finalising plans or costs for capital measure installations at the time of data collection.

For some VCSEs, some of the short-term outcomes discussed below may occur over a longer time horizon than others, given the breadth in the types of VCSEs that accessed support from the EES (i.e., VCSEs with fewer staff may find it easier to disseminate knowledge of energy efficient practices to the wider organisation compared to organisations with a larger workforce). The extent to which the findings below are generalisable is therefore uncertain at this stage.

Impact analysis was conducted on the short-term outcomes through a Bayesian Process Tracing (BPT) approach. A step-by-step process that explains, at a high-level, the process undertaken is presented below (See Annex 3 for the full technical detail and a worked example).

Figure 18: Bayesian Process Tracing method and example

4.1.1. Improved knowledge of energy efficient practices

VCSEs’ improved knowledge of energy efficiency was clear across survey, impact and interview evidence

Improvements in knowledge of energy efficient practices are one of the earliest outcomes that have been realised through EES support. The population of VCSEs accessing support was relatively varied (see chapter 3), with a mixture of community hubs, village halls, religious buildings and so on, of differing organisational size and located in buildings with different ages and ownership structures. This resulted in varied levels of baseline energy efficiency awareness and knowledge, meaning there was some variation in the level of improvements apparent. For example, some VCSEs had designated energy efficiency staff, compared to others that had only a few volunteers who did not focus on building energy efficiency in their day to day roles.

Figure 19 below highlights that most organisations (82%)^{[footnote 24]} found an improvement (ranging from slight to complete) in their knowledge of energy efficiency practices. Only 18% of VCSEs surveyed stated no improvement.

In contrast, amongst VCSEs that applied for an IEA but were unsuccessful, more than half (54%) stated they had subsequently improved ^{[footnote 25]} their knowledge of energy efficiency practices, despite not having been successful in their IEA application. This could suggest that simply engaging in the process of applying for an EES IEA may have had a benefit in terms of some VCSEs’ knowledge of energy efficiency practices. This may be an additional benefit from applying, whereby such VCSEs gained a better understanding of what information would be required for IEAs and may be better equipped in terms of sourcing this information more quickly in potential future audits.

Figure 19 ^{[footnote 26]}, ^{[footnote 27]}, ^{[footnote 28]}: EES survey responses to changes in energy efficiency knowledge

Figure 19: EES survey responses to changes in energy efficiency knowledge

Source: Ecorys, EES IEA applicant surveys, successful (n = 432), unsuccessful (n = 183)

The impact analysis echoes this sentiment of improved knowledge; as box 1 below highlights, it was quite likely that VCSEs that were successful in securing an IEA had improved their knowledge of energy efficient practices.

Box 1: process tracing results for likelihood of EES contributing to organisations’ increased knowledge of energy efficient practices

The results of the process tracing analysis indicate that it is likely, for most VCSE organisations, that the EES contributed to improving VCSEs energy efficiency knowledge. Specifically:

On average, there is a 68% likelihood that the EES had an influence in improving VCSE energy efficiency knowledge based on the evidence collected to date
76% of VCSEs surveyed had a likelihood of above 70% that the EES contributed to an improvement in their energy efficiency knowledge

A full breakdown of these results can be seen in Annex 3

Insights from the VCSE representative interviews were, in the main, aligned with the survey evidence and BPT analysis. For some VCSEs, however, while engagement had some impact on knowledge of energy efficiency practices, this was relatively limited due to a previously well-established baseline level of knowledge. For example, one VCSE representative mentioned they had a good level of prior awareness and had already made significant energy-saving measures, such as installing solar panels and additional insulation.

Some IEA recipient interviewees highlighted various wider outcomes related to improved knowledge Some VCSE representatives noted that going through the EES IEAs and/or capital grant process has given them the confidence to apply for other similar funding opportunities. Alongside the IEAs, the webinars delivered by the IGM consortium were felt to be useful in building awareness of energy efficiency as a starting point for subsequent improvements in energy efficiency knowledge.

My general knowledge of managing a building and energy efficiencies for the building has been improved as a result of [EES/ webinars]. So, if I saw another bit of funding where there is perhaps less support, I’d be more confident to have a go.

– VCSE representative

A particular VCSE representative also stated they were applying their improved knowledge to showcase energy efficiency best practice within the local area, to ‘give back’ to the local community. They used their building to show people what can be done in terms of efficiency improvements for their own homes.

Another representative, whose VCSE had a portfolio of sheltered accommodation, noted that their new way of thinking about energy efficiency is now embedded in their approach to property development.

This has become the way of thinking when it comes to our properties - what could we do? How much investment could we put in to enhance the property so that the service users will pay less in utility [bills]?

– VCSE representative

4.1.2. Energy efficient consumption

While it is too early to conclude that VCSEs have reduced their energy consumption, early evidence indicates the potential for future efficiencies to be achieved.

4.1.2.1. VCSE behavioural change to energy efficiency: IEA recommendations

Evidence on ‘no cost’ measures reducing VCSE energy consumption was inconclusive. The combination of behavioural changes and capital installations the EES supported should lead to reduced energy consumption; however, evidence of direct effects on consumption was limited at this time. With the installations ongoing, staff and volunteers’ conversations around energy efficiency are occurring, which in itself appeared to be encouraging better energy efficiency practices.

Successful IEA applicants were asked about their experience post implementation of the ‘no cost’ behavioural changes on their energy usage through the survey. Just under one-third (31%) stated that they did not implement the ‘no cost’ behavioural measure recommendation from the IEA. Of those that had implemented the ‘no cost’ measures, 46% did not know whether the changes had impacted usage, while 42% noted no change was experienced in their average monthly energy usage.

In general, this reflects that it was too early for VCSEs to have implemented changes and experienced subsequent direct changes in their usage. Most VCSEs would have had their assessment completed between ten months to one month prior to completing the EES successful IEA applicant survey (although some survey respondents did not yet have their IEA report at the time of completing the survey). Of the limited number of VCSEs that did report a change in energy usage, this was mostly a reduction of up to 10% in their average monthly energy usage.

Meanwhile, 37% of organisations that were unsuccessful IEA applicants stated that they had implemented ‘no cost’ measures to improve their energy efficiency practices, since applying for an IEA. Of these, 36% experienced a reduction in their average monthly energy usage, in comparison to 31% who experienced no change. The largest observed change was a reduction in monthly energy usage by up to 5%, as reported by 28% of these organisations.

Figure 20: Changes experienced to average monthly energy usage after implementing ‘no cost’ behavioural measures

Figure 20: Changes experienced to average monthly energy usage after implementing 'no cost' behavioural measures

Source: EES IEA applicant survey, successful (n = 137), unsuccessful (n = 67)

The primary ‘no cost’ behavioural changes recommended to surveyed IEA recipients through their IEA reports were:

61% recommending the promotion of energy savings habits (e.g., turning off lights and shutting down equipment or computers)
51% actions to improve heating ventilation and air cooling (e.g., thermostat adjustments); and
50% optimisation of heating and cooling areas, and 28% promoting energy awareness (posters / signs etc.)
This is very similar to the primary measures implemented by unsuccessful IEA applicants (see Figure 21
75% stated they implemented the promotion of energy savings habits
36% regular checking for faults
34% optimising heat and cooling areas; and
31% implemented actions to improve heating ventilation

This highlights the extent to which basic energy savings practices were needed across all applicant organisations to help reduce their consumption.

Figure 21: List of ‘no cost’ behavioural changes unsuccessful applicants implemented post IEA application

Figure 21: List of 'no cost' behavioural changes unsuccessful applicants implemented post IEA application

Source: EES IEA applicant unsuccessful survey (n = 67)

The BPT impact analysis results highlight the uncertainty around reduction in energy usage from implementing ‘no cost’ measures. It should be noted that the findings do not incorporate any consideration of changes in future energy demand. For example, an increase in the number of service users will increase the demand for energy usage (i.e., a larger number of individuals using building facilities: hot water, electricity, etc.). This could lead to a net increase in energy use, despite the implementation of ‘no cost’ measures.

Box 2: Process Tracing results for likelihood of EES contributing to organisations energy usage reduction from ‘no cost’ behavioural changes

The results of the process tracing analysis indicate that it was less likely than likely that the EES contributed to reducing VCSEs energy usage through ‘no cost’ behavioural changes. Specifically:

On average, there is a 48% likelihood that the EES had an influence in reducing VCSEs energy usage by implementing ‘no cost’ behavioural changes based on the evidence collected to date.

An overwhelming majority of 83% of VCSEs surveyed had an equal likelihood of 50% that the EES contributed or did not contribute to a reduction in their energy usage through the implementation of ‘no cost’ behavioural measures

A full breakdown of these results can be seen in Annex 3

Despite the uncertainty of the BPT analysis and low number of survey responses around the reduction in energy usage, some VCSE representatives interviewed did highlight an expected reduction.

… because everyone in the building has been able to see the measures being installed, everyone is talking about the measures and they can see the difference it’s making, so there’s added value and it’s encouraging better energy practices.

– VCSE representative

Most VCSE representatives interviewed likewise expected that capital measures will ultimately bring about significant reduced energy consumption.

If you’ve got a building that’s properly insulated then regardless of how much the cost of energy is, you’re going to be using less than you have done, had it not been properly insulated

– VCSE representative

4.1.2.2. Capital measures and energy usage reduction

There is limited evidence suggesting capital measures reduced current energy use, although measures such as solar panel installation were expected to support future energy reduction

Evidence around whether capital measures had an impact in reducing consumption was limited given measures for most capital grantees were yet to be installed at the time of data collection. Expectations, however, were positive around future expected reductions, particularly through solar panel installations.

Once all the measures are in place, it will make a massive difference to our energy consumption. We should be able to stop using gas completely and entirely use electricity going forward.

- VCSE representative

Solar panels have been installed on the building, and they are generating a significant amount of energy. The team is monitoring energy production and consumption through a solar panel app. We are becoming slightly obsessed with the solar panel app to see how much energy we’re producing.

– VCSE representative

The BPT impact analysis is inconclusive with results (see Box 3) suggesting uncertainty over whether EES has contributed to reducing VCSEs’ energy usage. This uncertainty is likely to be explained by there being insufficient time for installation and/or for energy usage changes to filter through into energy bills, at the point of analysis and reporting.

Box 3: Process Tracing results for likelihood of EES contributing to organisations energy usage reduction

The results of the process tracing analysis indicate that it was less likely than likely that the EES contributed to reducing VCSEs energy usage through participation in the EES. Specifically:

On average, there is a 44% likelihood that the EES had an influence in reducing VCSEs energy usage by implementing capital measures based on the evidence collected to date
An overwhelming majority of 81% of VCSEs surveyed had an equal likelihood of 50% that the EES contributed or did not contribute to a reduction in their energy usage through the implementation of ‘no cost’ behavioural measures

A full breakdown of these results can be seen in Annex 3

4.1.3. Energy bill savings

Limited survey evidence provides inconclusive insights into energy bill savings achieved. Future assessments should consider projected energy costs.

Outcomes relating to energy bill savings are still too early to assess: ‘no cost’ measures for most VCSEs had only been recently implemented at the time of fieldwork, and most VCSEs had not yet had their measures fully installed. There are some early signals that initial savings are being realised by some VCSEs who received support through the EES IEAs and/ or capital grant recipients, whilst for others it is still too early to say.

The primary goal of the EES was to support VCSEs to weather the impacts associated with the increased cost of living, particularly those relating to energy, through reductions in bills. The expectation was that improvements in energy efficiency and reductions in consumption of energy would lead to energy cost savings, which could then be funnelled back into maintaining service delivery. At the time of reporting, most VCSEs receiving support through the EES IEAs and/or capital grant recipients had information about the cost savings that they could expect from recommended and/or installed measures. These estimates were indicative of actual savings and will only be realised beyond the evaluation timescales.

This section explores the evidence collected to date to assess whether expected energy bill savings are likely to occur. As the grant awards are ongoing, the assessment draws on a partial set of capital award grantees.

4.1.3.1. IEA energy bill savings

There were only a few IEA recipients surveyed who noted at least some change (increase or decrease) in average monthly energy bills after implementing the ‘no cost’ behavioural recommendations. 12% of VCSE recipients who had implemented their ‘no cost’ measures noted a fall in their average monthly energy bills. However, the majority either did not note any change or were unsure if a change to their bills had occurred after implementing their ‘no cost’ behavioural changes (85%). The uncertainty is likely to be driven by the Scheme being at an early stage at the time of survey (most VCSEs having only implemented changes a few months earlier) and any changes in energy bills likely being relatively small on average.^{[footnote 29]}

Figure 22: Changes experienced to average monthly energy bills since implementing ‘no cost’ behavioural recommendations

Figure 22: Changes experienced to average monthly energy bills since implementing 'no cost' behavioural recommendations

Source: Ecorys, EES IEA applicant surveys, successful applicants (n = 137), unsuccessful applicants (n = 67)

Several VCSE representatives interviewed noted that it was too early to have experienced any change to energy bill savings but were expecting a greater impact to come through their capital measures.

In contrast, however, one VCSE representative noted that they were unsure how much they will save because of their energy costs potentially going up. This highlights the risk that, while the EES measures may reduce VCSEs’ future energy usage (compared to what they were using before installing the measures), future increases in energy prices could lead to a net increase in energy costs. In assessing energy bill changes, the fluctuating energy cost baseline for VCSEs, in the context of maturing their fixed term contracts for example, is thus another consideration in the longer term assessment of this intended outcome. In respect of this, it is worth noting that one of the ‘no cost’ measures frequently suggested by energy assessors in their IEA reports was to renegotiate more favourable contracts. Some VCSEs were advised to involve a broker (or multiple brokers for competitive rate negotiations) to secure lower energy costs. However, in some cases where VCSEs are renting, some found that even with researching the best possible tariffs, landlords had the final say, so their organisation had no leverage if the landlords did not agree.

4.1.3.2 Capital measures energy bill savings

Capital measures are expected to support bill savings and subsequently be redirected to service delivery

Across the evidence collected, many VCSE representatives anticipated energy bill savings following capital measure installations. Solar panels were one example, with grantholders expecting this capital measure to provide significant energy bill savings, in part through income generation via feed-in tariffs.

When they are installed, we may even be selling back to the grid… that can only be a big bonus for us as a small charity.

– VCSE representative

Smaller scale projects were still expected to generate savings, if to a lesser extent. One VCSE noted that they expect savings of £1626 a year from their solar panels and £398 from their lighting upgrades, for example. Other types of capital measures being installed supported VCSEs’ wider heating systems.

The wall heaters are far more efficient and cheaper, whereas the blowers cost an arm and a leg.

– VCSE representative

There’s going to be a massive impact on the cost of electricity from that saving alone.

– VCSE representative

IEAs recommended a wide range of measures, with varying implementation costs and anticipated savings (see Figure 23). Of those measures most commonly recommended, some of the higher cost measures (often requiring larger EES grants) were also expected to lead to higher average energy savings (such as heat pumps (£76,000 per organisation) and solar panels (£43,000 per organisation)).

In contrast LED lighting installation, one of the most commonly recommended (and cheaper to install) measures, had relatively low average energy cost savings (£3000 per organisation). While yet to be realised, the above data from the IEAs illustrates the potentially significant energy bill savings that could accrue from EES-supported capital installation measures.

Figure 23: Average expected energy cost savings ^{[footnote 30]} from capital installations

Figure 23: Average expected energy cost savings from capital installations

Source: Groundwork UK, Ecorys (n=3,264)^{[footnote 31]}

For most VCSEs awarded a capital grant, energy cost savings are expected beyond the evaluation period. There is confidence amongst some VCSE representatives that electricity and gas costs will decrease over time.

We feel confident that we will save costs, especially on electricity and gas.

– VCSE representative

There is no doubt that we’re going to be saving money. And in saving money we’re going to be wasting less energy

– VCSE representative

The BPT analysis (see Box 4 below), however, shed little light on whether the expected energy cost savings from involvement in the full EES process would have any impact on reducing energy bills, in part due to uncertainty caused by measures being yet to be completed.

Box 4: process tracing results for likelihood of EES IEAs contributed to organisations energy bill savings

The results of the process tracing analysis indicate that it was slightly less likely than likely that the EES IEA process contributed to reducing VCSEs energy bills through participation in the EES. Specifically:

Of the 1,782 applications for an IEA, 1,147 IEAs were approved (64%)
On average, there is a 49% likelihood that the EES IEA process had an influence in reducing VCSEs energy bills based on the evidence collected to date
An overwhelming majority of 82% of VCSEs surveyed had an equal likelihood of 50% that the EES IEA process contributed or did not contribute to a reduction in their energy bills

A full breakdown of these results can be seen in Annex 3

4.2. Medium to longer-term outcomes/ impacts

As indicated in the scheme ToC, the EES is expected to lead to improvements in VCSEs’ financial resilience(becoming less reliant on using their financial reserves to fund energy costs); staff and volunteer working conditions; and VCSEs’ ability to maintain service delivery. Most VCSE representatives interviewed offered a positive outlook on the likely achievement of such outcomes. It is expected, however, that they will be achieved beyond the timescales of the policy period; therefore, evidence of actual outcome achievement is limited at this stage in the evaluation. Most responses were thus indicative of expected outcomes and potential impacts.

4.2.1. Financial resilience

VCSE supported through the EES expect improvements in their organisation’s financial resilience.

Most VCSEs representatives interviewed expect financial reserves to be supported, in some cases increased

Some VCSEs were reliant on depleting their financial reserves to pay for substantially increased energy bills during the cost of living inflationary period. 9% (n = 15) of IEA recipients surveyed reported that, in the absence of capital funding, they would have paid to install one or more energy efficiency measures covered by the EES. One third of this group (n = 5) would have needed to use income of financial reserves as the primary source of funding to pay for energy efficiency measures. Qualitative evidence taken from IEA and capital grant applications found that several applicants faced depleting financial reserves (see Table 1 below).

Echoing their expectations around energy bill savings, many interviewees noted that their financial reserves are likely to subsequently benefit from expected reductions in energy costs. One representative, meanwhile, said that because of their EES installation the organisation’s overall financial situation had already improved, ensuring greater energy security and enabling increased financial resources to be allocated to support community activities. Another interviewee similarly mentioned that energy efficiency improvements have allowed their organisation to forego setting aside additional reserves and could be redirected to service provision. Several VCSE representatives noted that the anticipated savings would help future-proof against uncertainty, by enabling them to rebuild reserves.

[Our] financial reserves were very depleted because of our high energy bills, future savings on energy will allow us to replenish our reserves.

– VCSE representative from capital grant application

We will hopefully be able to get out of fuel poverty and reduce our energy spending from 12%. As a result of this we can start building our financial reserves which will make our services more secure and sustainable.

– VCSE representative from capital grant application

There were a few organisations for whom energy costs were a relatively small aspect of their overall financial position; for these organisations the support was perceived to have less of an impact on their financial health.

Table 1 ^{[footnote 32]}: Buzzwords/phrases ^{[footnote 33]} extracted from successful IEA and capital grantee applications on their financial health as of the application date

Buzzwords	IEA application mentions	Capital application mentions
Financial reserve depletion	26%	30%
Funds redirected away from service delivery	7%	11%
Sought additional funding	5%	10%
Delays to service/ organisation expansion plans	5%	3%
No real impact on financial health	5%	3%
Partial/ complete closure	3%	1%
Opening hours reduced	1%	3%
Increased costs redirected to service users	1%	4%
Reduced service user participation	0%	1%
Freezing of expenditure	0%	2%
Insolvency	0%	0%

Source: IEA applications and capital grant applications (n=1,147, IEA applications), (n=305, capital grantees)

4.2.2. Service delivery

Emerging evidence suggests some early service delivery was maintained; VCSEs expect this to continue following the funding period. Many VCSE survey respondents expected that EES support would enable them to at least maintain their current level of service delivery and, in some cases, that there may be an increase in service delivery resulting from reduced energy costs or other effects of EES installations. This was echoed in VCSE interviews; for example, a small number of VCSE representatives noted that due to the implementation of the capital measures (such as roof insulation), their building was more efficient at preserving heat during the winter months.

Capital grantees (Figure 24) likewise reported similar positive expectations, wherein those surveyed either “strongly agreed” (64%) or “agreed” (30%) that the measures being installed will have a positive impact on the ability to cover the costs of future service delivery. 80% of capital grantees surveyed furthermore expected the measures to help support them to increase future service delivery.

Figure 24 ^{[footnote 34]}: The impact of EES capital installations on future service delivery

Figure 24 : The impact of EES capital installations on future service delivery

Source: Successful EES IEA applicant survey (n=168), Ecorys

Figure 25: Changes to unsuccessful capital grant applicants service delivery since time applying to the EES and now

Source: Unsuccessful EES IEA applicant survey (n=183), Ecorys

Insights gathered from the majority of VCSE interviews echoed the expectation of maintaining and/ or increasing service delivery because of the EES. A VCSE representative interviewed highlighted that they feel more confident that the building they own will remain open for longer, expressing the hope that with the anticipated reduction in utility bills will mean that they can pass on this saving through lower rent charges to other VCSEs. It was acknowledged, however, that this depends on their landlord passing on savings through reduced energy bills. A representative of another VCSE, which rents extra space to other VCSE organisations, noted that the energy efficiency measures will allow them to reinvest savings and maintain low rent for other VCSE tenants, ensuring the building remains sustainable.

…it will end up being more stretched because we’re subsidising some of the work, but it will be worth doing in the end.

– VCSE representative

Another interviewee likewise mentioned that reduced energy costs mean more funds can be redirected towards community services. Although their upgrades were relatively small, they emphasised how even saving £100–£200 per month makes a tangible difference, allowing the charity to invest more in service provision and remain open for longer.

Any money that we save means that we can plough more money back into supporting our community instead of having it in reserves and having to ring-fence it for utility bills.

– VCSE representative

A representative of a relatively new VCSE, meanwhile, highlighted that despite being a young organisation, last winter (2024) was the first time they were able to open for the whole period. Their energy bills were not large, but that was because previously they had not been able to afford opening for very long. Now, with the savings made, they expected to be able to increase the amount of time they remain open. They would in turn be able to increase their earned income, making them more financially resilient as an organisation.

Despite the generally positive views highlighted above, there were also a few instances reported where service delivery is likely to be unaffected or negatively impacted by the measures. One VCSE representative, for example, noted that service delivery will be unaffected in the short to medium term because installing the measures was more expensive than they’d initially thought and needed to be subsidised by the VCSE.

4.2.3 Working conditions

Only a few VCSEs representatives expected improvements in working conditions.

In terms of working conditions for staff and volunteers, there was limited evidence at this stage of the evaluation. However, one VCSE interviewee noted that staff and volunteers have become more aware of the importance of energy efficiency, recognising the direct impact of insulation on comfort and cost savings.

Warmer premises was one of the primary benefits to working conditions from the capital measures installed for some VCSEs. A few interviewees, for example, noted that there were early signs of improved warmth through reduced draughts, improving the working environment. Similarly, one VCSE interviewee, who noted their building was usually very cold, was expecting the double glazed windows will keep staff, volunteers, and beneficiaries warmer. Some of their staff also used to work in insufficient lighting conditions a lot of the time, but they have been able to upgrade lighting with sensors and LED lights, thus improving the working environment.

Another VCSE interviewee, meanwhile, noted multiple outcomes that they believe will result from energy bill savings, primarily increased reserves but also improving the environment for staff and volunteers by being able to purchase new fire doors, upgrade kitchen facilities and invest in some new equipment. This was seen as being expected to improve the health and safety for the workforce. Another interviewee made the point that the quality of their working environment will improve the attractiveness of hiring their space out to other partners, which could lead to increased revenues. Therefore, maintaining the attractiveness of the building (e.g., so that it is accessible, comfortable, and sustainable) was also expected to support future revenue generation.

Question 6

5.0 Economic evaluation

Accepted Answer

This chapter presents the early economic evaluation of the EES, assessing overall value for money using the National Audit Office’s 4E’s framework. At the time of writing, the full extent of the direct costs for the EES were unrealised as some funding had not been claimed due to ongoing installations. The expected direct costs and monetised expected benefits were used to derive an indicative breakeven assessment.

Key Findings

Overall Value for Money: The overall assessment concluded that it is still too early to comment on whether the EES generated value for money. However, some indications are emerging that the EES is likely to deliver value for money to the taxpayer.

Economy: Early evidence indicates that it is likely the scheme will provide value for money at a point beyond the policy appraisal period. One area for improvement was the mixed application quality, which added to the administrative burden for Groundwork UK. However, adjustments to budgets were closely monitored throughout EES implementation and were repurposed effectively to ensure learning from early delivery was reflected in later stages, including in respect of capital grant applications and the introduction of the EnergySharp helpline for VCSEs.

Efficiency: At the time of writing the full outputs of the scheme had yet to be realised. Therefore, it is too early to assess whether efficiencies were achieved. Learnings from the IEA applications and delivery were incorporated into the capital grant allocations, thereby supporting efficiencies in delivery. The final number of IEAs delivered was 1,147, towards the lower end of DCMS’ predicted range of 1,088 to 2,720. This could have been due to the short window for applications or the types of buildings requiring assessments varying, with some having complex ownership structures and building statuses (e.g., listed buildings). Energy audits varied in quality, with 9 needing to be reassessed before delivery to the VCSEs. This delayed capital grant applications for some VCSEs. Variations in capital grant award value and request values, primarily due to 5% contingency budget lines being introduced by Groundwork UK to mitigate increased supplier quote risks, could lead to a risk of capital grant underspend.

Effectiveness: It is** too early to fully comment on outcome achievement for the EES; however, early evidence points towards improvements in energy efficiency knowledge, suggesting potential behavioural changes to energy efficiency practices, in turn leading to other outcomes such as reduced energy consumption. VCSEs are expecting medium- to longer-term outcomes to be achieved once capital measures are installed. In some cases, this includes expectations of notable change, for example via income generation from solar panels as well as expectations of increased service delivery

Equity: The EES broadly achieved an equitable distribution of grant funding across regions, organisation size and service type, albeit with some minor outliers such as a lower than expected London representation (7%). Possible reasons for these differences have been provided below.

Breakeven analysis: The indicative breakeven analysis shows that the partial monetised expected benefits will equal the total direct costs of the scheme between June 2027 (optimistic scenario) and January 2031 (conservative scenario). This is between four and eight years after the funding period. The actual breakeven could fall at any point within this period. Most of the direct costs will be incurred during the funding period, whereas most of the benefits will be experienced beyond this time. The breakeven analysis can only offer a partial picture as some costs and benefits are not able to be monetised, primarily due to it being too early for a full analysis and/or a lack of data being available.

Costs to date: The current direct cost profile is broadly on track, with the proposed budget being £16.2m as of end January 2025. The total direct costs, which have slipped into FY25/26, are likely to come in slightly below the proposed budget of £25.5m, at £25.2m, in 2024 prices (October 2023 to March 2026). Successful IEA applicant respondents highlighted that some indirect costs have occurred for some VCSEs and stakeholders, such as pre-installation/ structural works, permit acquisition, etc. These should be considered in future VfM assessments.

Non-monetised expected benefits: There are several non-monetised benefits that are likely to be experienced beyond the timescales of the evaluation, including: efficient and sustainable energy consumption, improved knowledge of VCSE energy efficiency, improved working conditions and service delivery, improved financial resilience, and the reinvestment of energy bill savings for wider social value. These should be considered in future value for money assessments.

5.1. Overall value for money

A full value for money assessment of the EES is not possible, given the capital grant awards were still being issued at the time of data collection. Delays early in the scheme shifted the timeline for delivery across each stage of the policy roll out. This meant that it was necessary to reprofile some funding into FY25/26 to ensure all grantees are able to complete their capital measure installations, rather than some VCSEs ending up with partially completed installations or abandoning their installation plans. The assessment below provides an indicative view of the evidence collated to date, adopting the NAOs 4E’s approach.^{[footnote 35]}

5.1.1. Introduction: early economic evaluation

There are three strands of economic evaluation results presented below:

An assessment following the National Audit Office (NAO) 4 E’s methodology. This approach holistically assesses the evidence collected across various stages of the ToC, from inputs through to outcomes, and includes a wider view of how equitable the scheme has been to produce overall reflections on value for money
An indicative breakeven analysis, providing a high-level assessment of the point at which the monetised expected benefits of the scheme equal the total expected direct costs. The expected benefits monetisation below involves monetising additional energy bill savings from both completed IEAs and the installation of capital measures, as well as wider benefits of carbon savings from the capital installations. Present values were compared by applying the standard GDP deflators ^{[footnote 36]} (accounting for inflation) and discount rate of 3.5%,^{[footnote 37]} as described in the HMT Green Book ^{[footnote 38]} to total direct costs and monetised expected benefits
An assessment of the EES’ costs, which features all the direct costs of the EES as of end-January 2025. This includes grant funding, administrative costs, staffing, assurance and evaluation costs

At the time of writing, the EES capital grant funding award decisions were ongoing, as some successful capital grantholders were still in the process of accepting or installing the measures proposed through their IEAs. Therefore, a full VfM assessment was not possible at this stage in the evaluation but will be explored in the next phase of reporting.

5.2 The 4E’s EES VfM assessment

5.2.1 Economy

There is evidence to indicate that the cost of inputs (stakeholder resources, IEA, capital grant) to the EES were minimised as far as possible. There have been additional unanticipated administrative burdens associated with the IEA phase of the policy roll-out (described below) which potentially created some inefficiencies, but effort was taken to learn from this and minimise these burdens for the capital grant element of the EES. It is expected that this learning will also be taken forward for similar policy development in the future, which can be regarded as an additional benefit.

Despite the direct costs of the programme extending into FY25/26, from a stakeholder perspective costs seem to have been minimised with budgets closely monitored to keep funding allocations on track. The shifted (and potentially additional) spend in FY25/26 was necessary for capital grantees to be able to complete capital installations and ensure works are not left incomplete, which would add a disbenefit where buildings are rendered “out of service”. This would negatively impact social value^{^{[footnote 39]}} creation through reduced or inaccessible frontline service delivery. Disruptions due to installation of capital measures to service delivery were limited for capital grantees surveyed (see section 3.3.2 above for details).

Changes in budgetary lines were needed to ensure efficient delivery of the EES

There was a need for some budget lines to be repurposed and spent later than anticipated due to delays in EES design and implementation. This can partly be explained by the nature of the policy itself. The EES was a relatively new policy for DCMS, although the Department sought appropriate expertise to help mitigate any limitations in knowledge around energy efficiency, including from DESNZ. Further details on the specific costs to date can be reviewed in section 5.3.1 below.

DCMS support required for the design and implementation of the EES was greater than initially anticipated. DCMS support for the design and implementation of the EES was greater than expected early on in the scheme, due in part to the new policy area, alongside the tight timeline to design and launch the EES. This added to DCMS’s resource allocation in terms of additional time spent reviewing grant documentation, policy delivery data collection forms, and consultations with programme stakeholders etc. Communications and outreach also required additional DCMS support, which added to the administrative resource provided by DCMS. As the EES moved into the delivery stage, it was noted that learning from the IEA applications and delivery was brought through to the capital grant applications, and grant management became a smoother process.

The mixed quality of IEA and capital grant applications required additional reviews and resource. The mixed quality of both the IEA applications and capital grant applications also potentially increased the administrative burden on the IGM consortium and other panel members. Most applications came through close to the deadline for submission, adding additional pressures during the time concerned, creating potential inefficiencies. A back and forth discussion with some VCSE applicants was also required to ensure that sufficient application quality was achieved for a fair and equitable review of each application.

EES delivery alongside application assessments posed additional challenges for the IGM consortium. EES assessment panels took place whilst the application portal was still live. This meant funding decisions had to be made without knowing the full number of applications that were to be received. By accepting a large proportion of IEA applications early, there were risks of some VCSEs most in need potentially missing out with the scheme being oversubscribed from an early stage. This would have been likely to add to the administrative burden on the IGM consortium, which would have needed to ensure a balanced approach was taken with application assessments alongside a stricter monitoring of applications and spend. There was a potential risk that an influx of applications near the deadline would bias the review and assessment, making the process unfair.

The cost of living community fund, the panels only started making decisions after the application deadline, whereas in our case the panel started making decisions way before the application deadline.

– DCMS policy advisor

Repurposed underspend (“EnergySharp” helpline) aimed to improve capital application quality. The “EnergySharp” helpline, detailed in section 2.3.4 above, involved repurposing programme underspend to support improvement in the quality of capital grant applications. 68%^{[footnote 40]} of respondents to the EnergySharp questionnaire noted they used the service to help them transfer their IEA report feedback into the submission of their capital grant application, so as to ensure they provided the right level of detail for the best chance of being successful. This element seems to have supported VCSEs and is a positive repurposing of funding to support an improved quality of applications, reducing the potential administrative burden of panel members in assessing lower quality applications.

Three supplier quotes aimed to ensure a competitive price A requirement for three separate supplier quotes for capital measures was adopted to ensure input costs were minimised via a competitive price being achieved for installation. This did add an additional task for VCSEs to complete and it was not always possible to find three different quotes. However, post-award there was flexibility with this requirement, which was reduced to two quotes - in particular when grantees had applied for specific niche capital technologies. To ease the additional burden on VCSEs, capital enabler support was also provided to supply groups with a list of potential suppliers that they could approach to quote, as well as to support with assessing the quotes received.

5.2.2 Efficiency

The scheme to date has generally been efficient, particularly given the circumstances under which the policy was being delivered. The number of IEAs delivered was within initial DCMS expectations, although the quality of some IEAs were not to standard. This was a minor inefficiency of the scheme, but the actions taken by, DCMS and Groundwork UK to improve their quality and introduce the EnergySharp telephone helpline minimised the impact on capital grant applications to an extent. The policy was being delivered at pace and during a difficult period for capital installations, although Groundwork UK acted swiftly to ensure contingency funding was available to avoid VCSEs facing additional costs that some may not have been able to cover. Despite the above positive indications, the capital grant allocations and installations are ongoing at the time of writing, so a full assessment of efficiency was not possible at this stage.

IEAs delivered within expectations, although closer to the lower end. Overall, the evidence suggests that the predicted spend for IEAs was broadly correct and hence the funding allocation was appropriate. The final number of IEAs delivered was 1,147, which is towards the lower end of the EES FBC ^{[footnote 41]} predicted range of between 1,088 to 2,720 ^{[footnote 42]}. The average cost of an IEA was £2,442 ^{[footnote 43]}, which is towards the upper limit of £3,025 per IEA. DCMS’ estimate was therefore fairly accurate, although a majority of IEAs did seem more costly than initially anticipated. This could have been due to the wide ranging complexities involved with the building types that were successful. For example, several buildings had complex ownership structures (typically churches), and some were listed buildings, which may have been more difficult to assess for appropriate measures.

A proportion of IEAs needed to be re-assessed, however (see 5.2.2.2 below for detail), which added inefficiencies to the delivery of IEAs. This could have been another reason for why the number of IEAs delivered were towards the lower end of DCMS’ expectations. Additional resources may have been required to conduct these re-assessments, making them more costly perhaps. This may also have been part of the reason some VCSEs had to wait longer than expected to receive their IEA reports. These VCSEs would have then had less time to process the IEA reports and apply for a capital grant. Survey data indicates that this effect was not significant, however, as a large proportion of IEA recipients surveyed were satisfied with the amount of time taken to receive IEA reports (see 3.2.1 for detail).

Mixed quality of energy audits; reassessments required suggests potential inefficiencies. The EES was delivered by 76 ^{[footnote 44]} unique energy assessors, with a mix of individuals and companies providing the energy audits. Energy assessments were mixed in terms of their quality, resulting in some potential inefficiencies to their delivery. In 9 cases the quality issues meant that the assessments required revision, with Groundwork UK having to send some back to auditors for this purpose. This added delays to VCSEs receiving finalised energy audits to feed into their capital grant application. It likewise added to administrative burden on the IGM consortium. IEAs may have been better delivered by one (or a small number of) organisations for all applicants, as noted by some DCMS policy advisors during stakeholder interviews. An individual organisation delivering the energy audits would also be likely to apply a more consistent approach to assessments, making it easier for panel assessors that were reviewing IEA assessments to follow the IEAs’ logic for recommendations. This would potentially have improved efficiencies in terms of supporting the achievement of subsequent expected outputs. It could also have made the process for capital applications more informed, in terms of increasing accuracy and consistency, thereby enabling improved assessment of the relative appropriateness of measures.

It seems like most organisations were happy with their IEAs, but there was a bit of variation …there might have been a bit of variation in the quality because it was done by different assessors rather than it having done by one company with one very specific way of measurement.

– DCMS policy advisor

“I think there are a couple of schemes that are just using one delivery company [energy auditor] and therefore their IEAs are better controlled”

– DCMS policy advisor

5.2.3. Effectiveness

Too early to assess cost effectiveness, although early evidence suggests a positive outlook. Cost effectiveness looks at the relationship between outputs generated and outcomes. Indicative evidence provides an early insight into whether the EES outcomes will be achieved. Overall, VCSE representatives were positive that some short-term outcomes (e.g., knowledge of energy efficient practices) are already being achieved, or would be likely to be achieved post capital measure installations. VCSE representatives similarly expected to achieve medium-to-longer term outcomes of financial resilience and maintaining service delivery (see Chapter 4 above). However, it is too early to assess these outcomes. A fuller picture of whether the EES has been effective in delivering outcomes should thus be assessed in future value for money assessments.

5.2.4. Equity

Focusing on the primary cost of CDEL (capital grant spending), the distribution of funding to date has been equitable across several VCSE characteristics, namely region, organisational size and main service theme. The analysis below highlights the spread of capital grant spend across England, by organisation size (by turnover) and by service type. The three sub-categories all highlight an equitable spread of grant funding. The average award amount was £60,709 (median grant value = £51,702) for capital grantees as of end January 2025.

Regional spread of grant funding across England is positively distributed. Looking across the regions, the capital grant value has been spread evenly. London has the lowest proportion of the grant funding value allocation at 7% compared to Yorkshire and the Humber at 16%. Compared to the distribution of VCSEs across England, most of the funding went to regions with a relatively smaller proportion of VCSEs. London has the largest proportion of VCSE at around 19%^{[footnote 45]} compared to the rest of England. Despite the largest proportion of VCSEs being located in London, they are largely made up of VCSEs classed as large, major and super-major organisations (those with an income over £1m) at 39% of the VCSEs in London. This could partially explain the lower amounts of grant awards to London based VCSEs, which would likely require larger amounts of grant funding to install measures (greater than the upper limit of £150,000 per VCSE) or are less impacted by the cost of living crisis compared to smaller organisations.

Table 2: Distribution of capital grant value across the region

Region	Percentage of capital grant awarded
Yorkshire & Humber	16%
South East	14%
North West	13%
North East	11%
South West	11%
West Midlands	10%
East Midlands	9%
East of England	8%
London	7%

Source: Groundwork UK, Ecorys

Grant funding predominantly reaching organisations of small to medium sized. Turning to the spread of grant awards across organisation size, medium sized organisations received most of the capital grants at almost 75%. Micro, small and medium sized firms made up 98% of the capital grant funding allocation. It can be argued that most of the funding has therefore been directed to organisations most in need of support during the cost of living crisis – i.e., those that have modest turnover.

Table 3 ^{[footnote 46]}: Spread of capital grant award across VCSE organisation size by turnover

Organisation size (by turnover)	Percentage of capital grant awarded
Micro	0.4%
Small	22.9%
Medium	74.7%
Large	1.1%
Major	0.8%

Source: Groundwork UK, Ecorys

VCSEs providing a “warm place” service theme has the largest proportion of grant funding. The main service theme, accounting for the largest proportion of current grant awards, were VCSEs whose work relates to poverty, food provision, warmth and providing emergency supplies at 79%. This was closely followed by organisations whose work relates to education and employability (67%). Comparing this to the number of capital grantees identifying with each service theme, there is a broad alignment, suggesting an equitable share of funding provided by service theme.

Table 4: Spread of capital grant award by VCSE service theme

Service theme	Percentage capital grant award allocation	Percentage of capital grantees identifying with each service theme
Poverty, Food provision, Warmth and Emergency Supplies	79%	75%
Education & Employability	67%	59%
Physical and Mental Health	62%	63%
Advice	54%	48%
Shelter	10%	10%
Other	36%	36%
Source: Groundwork UK, Ecorys

5.3 Breakeven analysis

The breakeven analysis presented provides an indicative timescale over which the monetised expected benefits are equal to the total direct costs of the EES. The monetised expected benefits are projected beyond the policy period to the point at which they exceed the total discounted direct costs of just over £24.0m ^{[footnote 47]} (as of end-January 2025). Figure 26 and Figure 27 below show the cumulative projections of the expected costs and monetised expected benefits over time, for energy bill savings only and for energy bill savings plus carbon savings respectively. The reason for this disaggregation is due to additional uncertainty associated with the carbon savings monetisation methodology.

Figure 26: Cumulative projection of discounted expected direct costs and expected monetised benefits (energy bill savings only)

Source: DCMS financial data, Groundwork UK IEA/ capital award data and Ecorys invoice/ financial projections

With the monetisation of energy bill savings from both the IEA and capital measures, in the high scenario benefits will equate to costs around March 2028. In the low scenario it would take just over an additional five years through to June 2032 for monetised energy savings benefits to equal total direct costs (Figure 27). This is highly indicative analysis, hence the high and low range of benefits. The true breakeven point could fall at any point within that period.

Figure 27: Cumulative projection of discounted expected direct costs and expected monetised benefits (energy bill savings + carbon savings from capital measures)

Source: DCMS financial data, Groundwork UK IEA/ capital award data and Ecorys invoice/ financial projections

Adding in the additional carbon savings provides a slight adjustment, in that benefits are realised slightly sooner. With the addition of carbon savings from capital measures, the earliest estimated breakeven point would be around June 2027 (Figure 27). In the conservative scenario benefits would equal costs around January 2031. Central estimates^{[footnote 48]} were also provided with the carbon values and a central, high-low range was also calculated. This breakeven central range is from August 2027 to March 2030. Again, this analysis is highly indicative as with the estimation above. Further details on the methodology employed can be found in Annex 5.

5.4 Costs assessment (to date)

5.4.1 Direct costs

Total cost projections currently on track – additional funding to potentially come from DCMS in FY25/26. The direct costs incurred by end January 2025 came to a total of £16.2m and cover costs incurred by DCMS, Groundwork UK and for the EES evaluation. DCMS’s cost is for the assurance of the programme (staff salaries to be included by end March 2025 in the expected costs). Groundwork UK, as the lead member of the IGM consortium, has costs covering IEA delivery, capital claims to date, repurposed finance for EnergySharp and administrative costs (inclusive of staffing). They also have responsibility for disseminating funds through to consortium partners. EES evaluation costs include delivery of evaluation milestone outputs (reports and learning workshops) and academic subcontractor payments. The largest proportion of costs incurred are for programme delivery (IEAs, Capital grant claims and EnergySharp) totalling 94% (£15.2m) of the total actual costs to date.

The total proposed funding allocation for DCMS was estimated at £25.5m ^{[footnote 49]} and the current cost profile is on track to reach that amount. Most of the remainder (circa. £9m) of the funding is expected to be spent during February and March 2025, with some likely slippage into FY25/26 for beneficiaries to complete installation of their measures and for additional planned evaluation activity. As a proportion of total spend (as of end January 2025) to proposed allocation, the EES is at 63% of the proposed cost. Looking just at the proposed funding for the IEAs, capital grants and EnergySharp (£23.4m), the spend by end of January 2025 for programme delivery is at 65%.

Breaking the costs down across financial year and cost categories (CDEL, Resource Expenditure Departmental Limit (RDEL)^{[footnote 50]} and administrative costs) further highlights the spending is on track for the EES, although additional spending is expected in FY25/26 which was not originally planned. Table 5 below shows the costs per financial year of the scheme which was delivered between October 2023 and end of March 2026. This covers FY23/24 (partial), FY24/25 and FY25/26.

Delays in the EES programme start led to some of the funding being shifted across financial years. Other adjustments to the funding included introducing the “EnergySharp” helpline. An additional £0.4m of FY24/25 RDEL was expected as an underspend to be repurposed into additional CDEL contingency funding for capital grants, a few small additional webinars on common issues with capital builds (solar panels, building fabric work, heat pumps and behavioural change) and peer support sessions, alongside a small amount of contingency retained for unforeseen IEA costs.

Another cost profile feature concerns additional costs expected in FY25/26. The remainder of the capital grants are to be issued, which has required re-profiling of additional CDEL, potentially from the internal DCMS budget for FY25/26. This estimate was used to ensure all potential costs have been included in subsequent analysis and ensure the assessment is as conservative as possible. At this stage it is likely that some of the capital projects will filter into the next financial year.

Table 5^{[footnote 51]}: Cost comparison of proposed budget^{[footnote 52]} and actual/ forecasted costs in £m

	Category	Spend Type	FY23/24	FY24/25	FY25/26	TOTAL
EES FBC proposed budget outlines	Energy Efficiency Scheme	CDEL	£0	£20	£0	£20
		RDEL^{[footnote 53]}	£1.10	£2.30	£0	£3.40
		Admin^{[footnote 54]}	£0.60	£1.10	£0	£1.70
	Evaluation & Assurance	RDEL	£0.10	£0.30	£0	£0.40
	Total		£1.80	£23.70	£0	£25.50
EES Actual and forecast spend	Energy Efficiency Scheme	CDEL	£0	£20.40	£0	£20.40
		RDEL	£0	£2.20	£0	£2.20
		Admin	£0	£1.40	£0.40	£1.80
	Evaluation & Assurance	RDEL	£0.05	£0.50	£0.20	£0.80
	Total		£0.05	£24.50	£0.60	£25.20

5.4.2 Indirect/ unexpected costs

At this stage in the evaluation, the full extent of indirect costs are unknown, given the capital measures are still being implemented across most of the successful capital grantees. These costs have not been incorporated in the early stage breakeven assessment of the programme but should be considered in future evaluations of the EES. Some of the indirect costs to consider in the overall assessment are detailed below by stakeholder (DCMS/ IGM consortium) and VCSEs benefitting from EES support.

DCMS/ IGM consortium

Resources and time required to support VCSEs’ implementation of capital measures. The EnergySharp element of the EES programme, although included in the direct cost assessment, was an additional unplanned activity that was financed through repurposed IEA spend. However, there were also additional costs incurred by those delivering these support services, above the repurposed spend for EnergySharp Some VCSEs reached out for additional support, outside of helpline hours, which led to a need for additional time and resource to be allocated by helpline support workers
Payment of infrastructure bodies working with disadvantaged or minoritised groups. These infrastructure bodies are usually quite small organisations and in most cases require reimbursing to help support the programme. Without support, it will be challenging to continue their work of supporting organisations with a focus on individuals from minoritised groups in the context of large programmes such as the EES. They usually provide very targeted support and would find their resources stretched supporting larger scale programmes. The requirement was for these organisations to set up webinars and communications which, given their size and usually limited number of support staff, required additional funding. A small amount of the Groundwork UK communications budget was used for these activities

VCSEs

Application process costs. Most survey respondents reported that they had incurred financial or resource costs in applying for capital grants: this included time spent completing the application (87% of respondents)^{[footnote 55]} and getting quotes from suppliers/builders (62% of respondents). Applications for planning permission or permits were an additional cost for 23% of respondents. 17% of respondents required follow-up surveys of their buildings post-IEA. These wider costs for VCSEs have likely required funding through existing income or reserves, which should be considered in future value for money assessments
Structural costs required for the installation of capital measures (e.g. where VCSEs have to undertake additional work at their own cost to facilitate implementation of the funded measures, including structural alterations to buildings). For example, one capital grantee needed to install weather-proofing for an external battery
Other costs incurred during the installation of measures. The impact of the installation of the measures is unknown at this stage in the evaluation; however, the EES successful IEA applicant survey indicates that some additional costs had occurred for capital grantees. These should be factored into a future value for money assessment in terms of time taken away from the provision of frontline services. Its impact will also vary depending on the service delivery type each VCSE is providing. For example, a homeless shelter will have a relatively larger impact from capital works disruption compared to an advice centre – who could see staff and volunteers potentially working from home during installation and hence still accessible to clients
- Cleaning up after the works had been completed. This additional cleaning would have diverted resources and time away from providing service delivery, post installation
- Disruption to service delivery. 20%^{[footnote 56]} of respondents noted either having or expected such disruption to occur because of the capital measure installation
- 35%^{[footnote 57]} of respondents, however, noted no additional costs being incurred
Grant value did not match supplier quotes. In some cases, the value of grants applied for, based on the IEA, did not match the quotes from suppliers. On occasion, grant requests differed to award value. In the case of overspend, Groundwork UK had included an additional contingency item of 5% (on average) of the total amount applied for within capital grant applications. This partially mitigated any changes from the quotes proposed in IEAs to supplier quotes sourced. An added complexity was that capital grantees needed suppliers to provide works predominantly over the winter period. This added to the costs of installation for some suppliers and, in some cases, made it difficult to achieve the required three quotes due to difficulties associated with installation over this period

5.4.3 Non-monetised expected benefits

It is likely that, with the inclusion of non-monetised benefits, the breakeven point of the policy would likely be achieved at a faster rate. Some of the non-monetised benefits, as detailed below, include improved working conditions and reinvestment of energy bill savings for a social good (additional service delivery). These will likely lead onto significant wellbeing benefits. Vulnerable individuals accessing frontline services may likewise experience improved service provision, resulting in additional wellbeing benefits. For example, a warmer premises may encourage elderly beneficiaries to attend recreational classes which previously was not possible during winter months.

The non-monetised benefits are expected to be experienced beyond the timescales of this assessment. These include:

Prolonged efficient and sustainable energy consumption: As postulated in the ToC, with the introduction of energy efficient measures and behavioural changes, it is expected that the consumption of energy will be more efficient. Therefore, a reduced amount of energy consumption would be needed for the same level of service being provided. For example, to heat a room will require a lower amount of gas and electricity consumption for a more efficient boiler to heat the same area., however, capital measures will likely depreciate over time, and behaviours could change as individuals with increased awareness and knowledge of energy efficient practices move on. Therefore, despite the monetisation partially capturing some of the changes over time, these potentially negative effects would also need to be fully considered
Improved VCSE knowledge of energy efficiency: As highlighted above in section 4.1.1, improvement in the knowledge of energy efficient practices amongst staff and volunteers can have lasting impacts on energy efficient best practice. This will bring about wider awareness of energy efficient practices which could shape future energy consumption across the VCSE sector. Given the spike in energy prices over 2022, and many organisations’ reliance on reserves to fund these higher energy costs, increased awareness of potential measures to improve the efficient consumption of energy could help future-proof VCSEs against similar shocks
Improved working conditions and service delivery: Working conditions and building efficiencies can have wider impacts on staff, volunteer and service user wellbeing. These are particularly important for organisations that use their premises predominantly for frontline service delivery most hours of the week. For example, homeless shelters for vulnerable individuals can lead to significant improvements in wellbeing, albeit likely starting from a lower base. This would compare to a community hub providing a recreational space for a few hours per week for older people to socialise. There is a difference in how improvements in working conditions and service offering would impact each of these sets of staff, volunteers and service users
Improved financial resilience: Benefits from energy bill savings and efficient consumption of energy had not fed through at the time of the assessment. These will likely be experienced in the medium to longer term as energy efficient measures are installed and are operational. However, this may be difficult to evaluate given the expectation of increases in the baseline for energy demand. Financial resilience can be measured through various metrics, such as reserves, which would likely only see impacts feed through beyond the evaluation time scale
Reinvestment of energy bill savings for social good: The expectation is that VCSEs would use savings generated through reduced energy costs to provide additional service delivery. Early speculative evidence from the EES IEA successful applicant survey suggests VCSEs feel confident that the EES capital measures will help to maintain future service delivery, with 94%^{[footnote 58]} and 80%^{[footnote 59]} of those surveyed stating that service delivery will increase because of the EES capital measure installations

Question 7

6.0 Conclusion and recommendations

Accepted Answer

This section sets out the overall conclusions from the evaluation of the EES, and then provides some recommendations for the delivery of future, similar schemes.

6.1 Conclusion

Overall, despite very challenging timescales for designing, implementing and delivering the EES, and considering the constraints on when funding could be used by, the EES has broadly delivered the outputs it set out to achieve.

Overall, the design of the EES was positively received; it was seen as addressing a need for VCSEs, in both providing advice but also capital funding to implement recommendations. The two-stage approach, requiring an IEA before moving onto a capital grant application, was effective in helping VCSEs learn about potential improvements before developing a grant application. The BPT impact analysis highlighted that there was a 68% likelihood that VCSEs surveyed had increased knowledge of energy efficiency practices, post IEA, substantiating the fact that most VCSEs likely had improved knowledge before applying for capital grants

Despite the short timescales for designing the EES, key successes included flexibility in design and implementation, a collaborative partnership approach, and delivering to timescales to ensure funding could be spent. Recruitment of assessors was generally successful, with 76 recruited, though it took longer than expected, given it was a relatively unknown market for the IGM consortium.

Undertaking communication and outreach through existing services helped to engage VCSEs on the scheme, in the short time the IGM had for mobilisation. However, further, targeted outreach to organisations outside the IGM and Advisory Board’s networks could have increased uptake of the scheme as, ultimately, there was an underspend on the IEA aspect of the programme.

IEA applicants were generally satisfied with the application process, although some found the applications very long. Feedback on the capital grant application process was mixed, with positive aspects including information about the opportunity, webinars, and guidance documents, but negative views on the length of time for decision-making and the amount of information needed. However, it was felt by programme partners that this level of information was required for the nature of funding provided and for assurance purposes. Application decision-making worked well, though balancing criteria and prioritising organisations was challenging for programme partners.

In terms of delivery, 64% of IEA applications and 41% of capital grant applications were approved. The scheme appeared to have a good reach; successful organisations were spread across English regions, were small-to-medium sized, and delivered frontline services. VCSE representatives had a generally positive experience with IEA delivery, though there were concerns about the variability of report quality. Overall, 5,375 recommendations for energy efficiency measures were made across 1,147 completed IEAs.

Early assessment of capital grant delivery indicated that there were common factors affecting delivery, including late IEA reports, challenges with sourcing suppliers, planning permissions, project management capacity, and unexpected issues with buildings. However, once starting installations, for those who were in a position to provide feedback, the experience was reported as being generally positive. Overall, 1,216 measures were funded through the EES capital grant, with £18,880,646 awarded as of end January 2025.

In terms of what would happen in the absence of EES funding, the evidence generally suggests that most VCSE IEA applicants would not go - or (in the case of most unsuccessful IEA applicants) have not gone – on to get an IEA undertaken. Some options were available – such as other funding schemes or, in some cases, self-funded – but in general the evidence indicates an ongoing demand for support for accessing IEAs.

In terms of capital grant measures, the evaluation evidence suggests that while there is some funding available for VCSEs to install measures, most of the capital grant recipients surveyed would not have installed the measures in the absence of the EES. Some of those that were unsuccessful did go on to pay for their own measures – citing a commitment to reducing their carbon footprint and improving their service delivery – but on the whole, most did not. This suggests an ongoing need for capital funding opportunities and that the likely additionality of the scheme, relative to what would have happened otherwise, was high.

While, at the time of reporting, EES delivery is ongoing, there is evidence from this evaluation that the EES is generally on track to meet its intended short- and long-term outcomes.

Research with VCSE IEA recipients indicated that going through the process of the IEA via the EES positively influenced knowledge of recipients’ buildings’ energy needs (and other structural needs) and their knowledge of energy efficient practices (including what measures they could install to increase energy efficiency, and what behaviours they could implement to reduce energy usage). Where VCSEs had installed measures or implemented behaviour changes, it was generally too soon for them to say if it had an impact on their energy usage, and subsequently, if it had led to any energy bill savings. However, some capital grant recipients expected that solar panel installations, in particular, could potentially be a source of revenue generation in future, where they can sell surplus energy generated back to the national grid.

Most VCSE representatives engaged in the research did expect that the capital measures would support their organisation’s financial resilience and service delivery. Energy bill savings were expected to ease the financial pressures for most VCSEs and help to build up or reduce reliance on their financial reserves. In terms of service delivery, many also anticipated that the installations would help expand their service provision. This was mainly due to the ability to keep premises open for longer periods of time. Limited evidence was provided on the impact of behavioural or capital measures on organisations’ working environment and conditions, although there was some evidence that measures had led to warmer premises, for some VCSEs.

Overall, it is too early to assess whether the EES has generated value for money, although evidence indicates that the EES’s monetised benefits (energy bill savings and carbon savings) will outweigh the direct costs by between June 2027 and January 2031 (in the high and low scenarios, respectively).

The value for money assessment indicated that:

Costs were minimised whilst ensuring good quality delivery (with underspent budget reallocated as required to improve scheme delivery e.g., to fund the EnergySharp helpline service to support VCSEs provide high quality capital grant applications)
The EES was generally delivered efficiently given the challenging timescales in which a large amount of funding needed to be spent. Some inefficiencies were identified, such as poor-quality IEA reports being re-written and poor-quality capital grants applications taking a long time to review. However, the flexible approach to delivering the scheme also enabled some efficiencies, such as introducing the EnergySharp service (to minimise poor-quality capital grant applications), and introducing contingency funding for capital grant recipients facing additional, unexpected costs in delivery – primarily due to several VCSEs receiving higher supplier quotes than expected
While there are early signs of the EES being effective in reaching some of its intended short-term outcomes (such as increased knowledge around energy efficiency), in general it is too soon to assess overall effectiveness
The distribution of funding through the EES capital grant has been equitable, across several VCSE organisation characteristics, such as region, organisational size and primary service theme

While it is too soon to undertake an overall cost assessment (as, at the time of reporting, delivery is ongoing), the current direct cost profile is broadly on track, with the direct costs being £16.2m as of the end of January 2025. The projected estimate of total direct costs, which have shifted into FY25/26, will fall just below the predicted cost at £25.2m, in 2024 prices.

Similarly, it is also too soon to conduct a full cost-benefit analysis. The indicative breakeven analysis shows that the partial monetised expected benefits will equal the total direct costs of the scheme between June 2027 and January 2031 in the high and low scenario respectively. Most of the costs will be incurred over the scheme period, whereas most of the benefits will be experienced beyond this time.

6.2 Recommendations

While it is too soon to provide a complete set of recommendations – without full evidence on the overall outcomes and impact of the EES – the scheme implementation and delivery has generated learning that can be applied to future, similar schemes:

Using two-stage application/funding processes for newer funding areas: the evidence indicated that for funding areas that are relatively new to VCSEs (such as energy efficiency) – and even those that are not – having a two-stage process similar to EES could be helpful to help them develop knowledge and skills first, before then needing to develop a project plan and a detailed application form for grant funding. The evaluation evidence indicated that even having a fund just for IEAs was effective in building the knowledge on energy efficiency for VCSE representatives
Pre-application support is similarly useful for newer policy areas: the evaluation evidence suggests that the EnergySharp service, implemented midway through 2024, was effective in supporting VCSE organisations to interpret their IEA and then decide whether to make a capital grant application (and for what). Future similar schemes should consider building in pre-application support from the outset, to ensure VCSE organisations with less resource/capacity and prior subject knowledge still have the opportunity to apply for funding
Increasing timescales for spend: a key learning from the evaluation related to the tight timescales for programme spend. There were substantial concerns raised from VCSE applicants, programme partners and energy assessors about the viability of VCSEs being able to deliver their projects (especially more complex installations, with prerequisite work) by the original timeline of March 2025. This contributed to the delivery period being extended for the organisations that needed an extension due to delays. Future capital funding schemes need to be delivered over longer time periods to ensure all projects can be delivered, and to allow contingency time for unexpected issues for planning permissions and installation works
Consortium partnerships for complex projects: there was strong consensus that the IGM consortium, which combined partners with grant management expertise and energy efficiency expertise, worked effectively to enable the efficient implementation and delivery of a relatively novel programme. Future similar schemes should consider utilising the partnership approach when launching new or large-scale programmes to ensure all relevant expertise/experience is covered
Ringfence more funding for communications and outreach: as noted, there was an underspend on the IEA aspect of the programme. Future schemes should consider ringfencing more funding to allow for a dedicated marketing campaign, including payment/renumeration to membership organisations representing VCSEs led by minoritised groups to deliver communications activities with their networks
Use a standardised IEA report template or use fewer separate IEA assessor organisations: the variable quality of IEAs was a challenge and, ultimately, an inefficiency for the scheme. Programme partners reflected that future schemes should use a standardised IEA report template, providing training to assessors on how to use the template, to support a better shared understanding of the expectations for IEA reports. Alternatively, some programme partners felt the wide range of assessor organisations/sole traders meant that there was a lot of variability in approach, which translated to the report outputs delivered. Potentially reducing the number of assessors, or using several assessment organisations, could help reduce the risk of reports being of varying quality

Based on the evidence, the main reflection for the wider VCSE sector relates to:

Provision of capital funding: there is – and remains – a need for support to the VCSE sector to improve its energy efficiency, and, according to programme partners and VCSE organisations, there remains a general lack of capital funding available to support organisations to do this. However, the evaluation also highlighted that many of the applicant VCSEs’ buildings were old, and interviews highlighted that there were often other, structural works required before energy efficiency measures could be installed. This indicates a wider need for capital funding to address such structural challenges, to then enable VCSE organisations to participate in schemes such as the EES, to reduce both their costs and their carbon footprint

Question 8

Annexes

Accepted Answer

Annex 1: evaluation framework

Table 6 presents the Evaluation Framework for the study, which operationalises our analytical approach by setting out the core evaluation questions, sub-questions and data sources to answer these. The Evaluation Framework builds on the questions outlined in the Invitation to Tender (ITT); we have added further questions, following discussions with DCMS and Groundwork UK in the scoping phase, to ensure that we fully consider and assess the EES’s intervention logic. Through a process of synthesis and triangulation, bringing together evidence and insights from the different sources, we will be able to weigh the evidence and make evaluative judgements against each evaluation question.

Table 6: Evaluation framework

Process Evaluation

Evaluation question	Sub-question	Data source(s)
How was the application process implemented?	- What was the overall experience with the IEA application process (applicants; IGM; DCMS)? - How effective was the IEA application process and why/why not? - What support, if any, was received by applicants during the IEA application process? - What benefits/ improvements could be made to the IEA application process? - How do EES stakeholders describe the experience working alongside each other (applicants; IGM; DCMS)? - What was the overall experience of the grant application process (applicants; IGM; DCMS)? - How effective was the capital grant application process and why/why not? (including for those that already had a non-EES funded IEA) - What support, if any, was received by applicants during the grant application process? - What benefits/ improvements could be made to the IEA application process?	- Interviews with DCMS - Interviews with Groundwork UK/ consortium (as IGM) - VCSE Interviews - Surveys
How was the independent energy assessment process implemented?	- How well did the process of assigning an independent energy assessor to successful VCSEs work? - To what extent were IEAs carried out virtually or in-person? - How effective were the IEAs in terms of the quality of the reports, their timeliness, and whether they recommended cost-effective measures? - What was the learning from the process of implementing the IEAs?	- Interviews with DCMS - Interviews with Groundwork UK/ consortium (as IGM) - VCSE Interviews - Surveys
How was the capital grant process implemented?	- What was VCSEs’ experiences of identifying and securing a provider to install measures? - What worked well or less well? - (as relevant) How well did the ‘capital enabler’ role work? - What was the learning from the process of implementing the capital grants?	- Interviews with Groundwork UK/ consortium (as IGM) - VCSE interviews - Surveys
What were the characteristics of energy efficiency works recommended by IEAs?	- What types of energy efficiency measures were recommended by IEAs? - How, if at all, did these vary across different VCSEs? (in terms of service delivery area, building types etc) - To what extent were behavioural measures recommended to VCSE organisations? - How many measures were recommended? - In the absence of the funding for an IEA, how likely is it that VCSEs would have pursued internal or external energy audits or sought energy advice? - Would any of the recommended measures have been implemented?	- Interviews with Groundwork UK/ consortium (as IGM) - VCSE interviews - Surveys - IEA reports
What were the characteristics of energy efficiency works undertaken (or planned to be undertaken)^{[footnote 60]} via this fund?	- What types of energy efficiency measures were the capital grants used for or planned to be used for? (e.g. by technology groups (as defined by BEIS Energy Technology list), cost of measures, projected energy savings) - How many capital measures were installed or planned to be installed? - Was there a ranking system applied to evaluate the most cost-effective measures? - To what extent were recommended energy efficiency measures installed or were planned to be installed? What worked well in installing the measures? What worked less well (e.g. delays)?	- Interviews with Groundwork UK/ consortium (as IGM) - VCSE interviews - Surveys - IEA reports
What were the characteristics of grant recipients? (For example, what sub-sectors, sizes and types of organisations received grants?) What were the characteristics of organisations who received an energy assessment only, or a capital grant only?	- What were the sub-sectors of grant recipients? - What size organisations received grants? - What types of organisations received grants? (e.g. legal form/structure)	- Surveys - IEA reports - Monitoring data
What was the experience of grant applicants (both successful and unsuccessful)?	- What did successful grant applicants think worked well or less well with the fund? - To what extent did unsuccessful grant applicants receive feedback and signposting? What worked well and less well?	- Interviews with Groundwork UK/ consortium (as IGM) - VCSE interviews - Surveys
What have we learned about energy usage and energy bills, and their relationship to financial resilience, in the VCSE sector?	- To what extent is there demand for energy efficiency assessments, and capital works installations, across the VCSE sector? - How effective is a scheme such as the EES, in addressing the energy needs of VCSEs? - What types of energy efficiency intervention are most useful to VCSEs?	- Interviews with DCMS - Interviews with Groundwork UK / consortium (as IGM) - VCSE Interviews
What are the transferable lessons for other government funds?		- Interviews with DCMS - Interviews with Groundwork UK / consortium (as IGM)

Impact evaluation

Evaluation question	Sub-question	Data source(s)
What impact did the fund have on grant holders’ energy usage?	- To what extent did VCSEs’ energy consumption reduce? - What energy efficiency measures contributed to this most? - In the absence of the funding, to what extent would VCSE organisations be able to reduce energy consumption and/or bills? - How did VCSEs’ energy bills change, if at all? - Where energy usage was maintained, to what extent did energy efficiency interventions lead to better outcomes for VCSEs? (e.g. VCSEs using energy rather than being budget-constrained below the optimum level) - To what extent do VCSEs have improved knowledge of energy efficient practices? - What impact did the fund have on the energy usage and/or bills of those grant holder organisations that received an independent energy assessment only?	- Interviews with Groundwork UK / consortium (as IGM) - VCSE Interviews - Surveys - IEA reports - Monitoring data
To what extent can reducing grant holders’ energy bills be attributed to the fund?	- What impact, if any, did reduced energy bills have on grant holders’ service delivery or productivity? - What impact, if any, did reduced energy bills have on grant holders’ financial resilience, including their use of reserves? - To what extent were cash reserves used post-energy efficiency adjustments? - In the absence of the funding, would changes to energy bills have occurred? If so, what would grant recipients expect to have happened?	- Interviews with Groundwork UK / consortium (as IGM) - VCSE Interviews - EA reports - Monitoring data - Surveys
What energy efficiency interventions took place as a result of the fund?	- What assessment can we make of the likely impact of these interventions, in the aggregate, over a future time period? - To what extent would these interventions have been implemented in the absence of the EES? - Did EES VCSEs fund any energy efficiency interventions themselves? How and why? How, if at all, did this differ for VCSEs that (1) only had an EES-funded IEA, (2) only had a capital grant, and (3) had both an IEA and a capital works grant funded through the scheme.	- VCSE Interviews - IEA reports - Monitoring data
What was the impact of the fund on VCSEs’ ability to maintain service delivery (including core costs and salaries)?	- To what extent have VCSEs been able to maintain service delivery to service users? - Have any VCSEs been able to expand services? How and why? - To what extent have any energy cost savings been used to cover core costs and salaries?	- VCSE Interviews - Surveys
Were there any cumulative impacts for VCSEs that received funding from CCLF and EES?		- Surveys
What was the impact of the fund on VCSEs’ ability to provide improved working conditions?	- What was the impact for staff, volunteers and service users?	- VCSE Interviews - Surveys
What would have happened in the absence of funding?	- What proportion of works undertaken, and of energy usage/bill impacts, would have happened in the absence of this funding?	- VCSE Interviews - Surveys
What, if anything, were the unintended or unanticipated outcomes or impacts, and why did they occur?		- Interviews with DCMS - Interviews with Groundwork UK / consortium (as IGM) - VCSE Interviews - Surveys

Economic Evaluation

Evaluation question	Sub-question	Data source(s)
What are the costs and benefits of the fund, and to whom?	What were the costs of the fund, including: - Set-up costs - Grant management costs - Programme management costs - Indirect costs Who incurred these costs? What were the benefits of the fund? - What is the value of monetisable benefits? - What other benefits were there? Who experienced these benefits? What benefits are expected to accrue in the future (beyond the evaluation period), and what, as far as possible, is the value of these benefits?	- Interviews with DCMS - Interviews with Groundwork UK / consortium (as IGM) - VCSE Interviews - Surveys - IEA data - Monitoring data - Wider Literature
Has the fund been cost-effective?	To what extent were the outcomes achieved at the lowest possible cost?	- Interviews with DCMS - Interviews with Groundwork UK / - consortium (as IGM) - VCSE Interviews - Surveys - IEA data - Monitoring data

Annex 2: theory of change (updates)

Figure 28: EES Theory of Change (Updated)

EES Theory of Change update

Since development of the initial Evaluation Plan to guide the study, there have been a few minor adjustments to the EES ToC that are outlined below. The primary change to the policy reflects the iterative and reflective nature of the scheme with the introduction of the EnergySharp helpline support service. The logic chain regarding anticipated energy cost savings has also been updated to reflect short-term outcomes “Installation and operational capital measures” which previously was not explicitly described in the EES ToC. The final reflection was to explicitly specify the “Mid- to Longer-term Outcomes” as this now reflects the scheme roll-out progress and subsequent Impact Evaluation to be developed in the final report (see Annex 3 below for details on the Impact evaluation methodology).

EnergySharp helpline support service

In recent developments (May 2024) of the policy rollout, DCMS have decided to include pre-application helpline support for VCSEs completing applications for capital grants. This helpline support, known as “EnergySharp”, has been built into the scheme design based on feedback from the IEA applications. There have been 208 calls completed as of end January 2025. The objectives of the EnergySharp support service include: 1. Improving the quality of applications, 2. Building the capacity of the sector, 3. Reducing the risk of underspends and 4. To be cost effective. The support line is available to pre-capital grant applicants between 9am-5pm Monday to Friday, and 9am-12pm on Saturday, including occasional evening sessions. This service is being promoted and made available to all applicants who have been approved and had an energy assessment carried out. On completion of an IEA, applicant organisations will be signposted to the capital grant application process and to the EnergySharp helpline. The EnergySharp helpline is an independent advisory service and a pool of around 10-20 EnergySharp ‘supporters’ have been recruited through partners and from the list of Energy Advisors working on the programme, ensuring a broad range of expertise across the pool.

The primary purpose of the EnergySharp support service is to:

help organisations understand their IEA assessment and identify which, if any, measures align with scheme priorities, offer optimal value for money and are achievable within the designated timeframe
help organisations understand the scheme’s eligibility criteria
explain the capital grant programme priorities, particularly frontline services supporting cost of living and the impact of energy costs on the organisation and identifying the key considerations for organisations wanting to apply
provide advice to applicants on how to generate a robust delivery plan in support of their capital grant application
provide information about other grant/finance programmes for capital measures and any programmes available to progress other measures identified

Figure 29: Outcomes chain (Adjunct: mid-to longer-term detail)

As Figure 29 above shows, the mid-term outcomes are slightly nuanced in terms of the sequence of events for the VCSE energy bill savings. The pathway for VCSEs accessing funding through the capital grant has the additional step of requiring the capital measures to be installed and fully operational before experiencing any energy bill savings. Once any energy efficiency measures have been installed, the best practice or energy efficient technologies will be in use, such as solar panels providing electricity to the VCSEs’ sites. This will either reduce the energy consumption requirement or, provided demand for services rises, will lead to an improvement in the efficiency while consuming the same unit of energy. Through the reduced consumption demand, we expect this will reduce the VCSEs energy bill compared to the baseline of “no change”. In the longer-term it is expected any resource saved through lower utility bills can be redirected to supporting service delivery.

Annex 3: bayesian process tracing methodology

Summary steps

The evaluation required an assessment of the impact of the EES programme. Due to the lack of secondary data on some of the key outcomes (i.e., service delivery, staff outcomes, some financial outcomes) as well as uncertainties in retrieving data on financial measures for treatment and control groups using primary data collection (i.e., the survey) a full QED methodology assessing the full set of alternative impacts from EES was considered unfeasible. This approach provides an alternative that is a systematic and transparent approach to assessing the impact of funding. The use of process tracing is increasingly accepted as a robust alternative to experimental approaches in evaluation where the use of comparator or control groups is not feasible. *^{[footnote 61]}

This approach enabled us to arrive at an overall assessment (in terms of a percentage probability) of the impact of EES across the four areas detailed in hypotheses we set out. In terms of the overall analysis of impact, this approach allowed us to arrive at a conclusion on the proportion of VCSE organisations in different probability ranges of how likely it is those hypotheses would be true. The summary of the process is shown in the box below.

Box 5. Summary of steps in applying Bayesian updating to process tracing

Define the research questions and theoretical model of causality inclusive of testable hypotheses of the impact of EES.

Assign prior probabilities to each hypothesis based on existing evidence and expertise representing our existing belief about whether the claim was true.

As is recommended in the literature, this was chosen to be 50% indicating there was no prior information to suggest whether the claim was likely or unlikely to be true.

Design and carry out data collection to identify new evidence with which to test the hypotheses.

Update prior probabilities (posterior probabilities) with new evidence using the Bayes theorem.

Sensitivity: The likelihood the evidence would be observed if the contribution claim (CC) was true

Type 1 error: The likelihood the evidence would be observed if CC is false

Assess the impact of the EES by comparing the posterior probabilities of the different hypotheses.

The recommended steps by Befani (2020)^{[footnote 62]}, a leading academic in Bayesian updating of process tracing, were followed, and are detailed below.

Define research questions and develop hypotheses

The causal mechanisms illustrated by the Theory of Change were examined with the support of our expert advisors and based on interviews with stakeholders in order to define a set of hypotheses that reflect the research questions we plan to investigate. To define the hypotheses, we focused on the short-term outcomes for the VCSE organisations, as these can be measured via the survey, which is the primary evidence source that fed into the contribution tracing analysis.

Contribution tracing – alongside other research methods – helped us to try and answer the following research questions (as reported in the Evaluation Framework):

What impact did the fund have on grant holders’ energy usage?
To what extent can reducing grant holders’ energy bills be attributed to the fund?

From these research questions, hypotheses, and their complementary null hypotheses, had to be chosen that were mutually exclusive and allowed causality to be concluded. Based on the research questions, the ToC and consultations with the expert on the project, we produced the following hypotheses:

Table 7: Bayesian Process Tracing Hypotheses for EES

Hypotheses	Null Hypotheses
H1: During the period from December 2023 to August 2024, the EES IEA contributed to improving VCSEs’ knowledge of energy efficient practices.	Null Hypothesis (H0): During the period from December 2023 to August 2024, the EES IEA had no impact on VCSEs’ knowledge of energy efficient practices.
H2: During the period from December 2023 to August 2024, the EES IEA contributed to reducing VCSEs’ energy usage through no cost (behavioural changes).	Null Hypothesis (H0): During the period from December 2023 to August 2024, VCSE organisations experienced no reduction in their energy consumption.
H3: During the period from December 2023 to August 2024, the EES IEA contributed to VCSEs’ energy bill savings.	Null Hypothesis (H0): During the period from December 2023 to August 2024, VCSE organisations experienced no reduction in their energy bills.
H4: During the period from December 2023 to August 2024, the EES IEAs contributed to reducing VCSEs’ energy usage.	Null Hypothesis (H0): During the period from December 2023 to August 2024, VCSE organisations experienced no reduction in their energy consumption.

These hypotheses are mutually exclusive and testable, i.e., it should be possible to find evidence that proves or disproves these hypothesis claims.

Designing the data collection

We considered the probative value of responses to specific questions and prioritised responses with a higher probative value (i.e., evidence that is likely to be present if H is true, or evidence that is very likely to be seen if the H is false). It is suggested in the literature that evidence can be described by the different process tests and a variety should be considered; with a particular focus on hoop evidence and smoking gun (see Table 8). With this in mind, the main data collection for BPT in EES is the survey of grant holders, i.e., successful applicants. Key questions on outcomes were informed by the specified hypotheses, to tailor data collection to the outcomes of interest for BPT. The EES surveys were closed end of day on the 10th of December 2025 (Open for one month). Using the data collected through the successful applicant survey, we were able to provide an assessment of how the EES contributed to outcomes of interest for a large portion of organisations, making the analysis representative.

In addition to the survey, MI data was used as modifiers to some evidence pieces. MI data was collected from grant holders by the IGM consortium. These were used as context to frame our understanding of survey data.

Assigning weights

Weighting the evidence and updating the prior probabilities using Bayes Theorem. The aim of this step will be to establish the likelihood to see a piece of evidence if each hypothesis is true / false. Based on evidence from the literature, discussions within the team and input from our experts, ‘sensitivity’ and ‘type 1 error’ values were determined for specific pieces of evidence as follows:

Sensitivity: The probability of finding evidence if H is true. The ‘sensitivity’ value can be quantified, as a subjective probability between 0 and 1

Type 1 error: The probability of finding evidence if H is false

The probability values associated with finding particular evidence (regarding whether H is true or false) are based on the following scales:

Very likely – 90%

Likely – 70%

Uncertain – 50%

Unlikely – 30%

Very unlikely – 10%

The value of the process tracing approach rests on the validity of the subjective probability estimates for the sensitivity and type 1 errors assigned to each piece of evidence. We used a combination of survey responses providing mainly ‘hoop’ evidence as it was difficult to identify ‘smoking gun’ and ‘doubly decisive’ evidence based on any one piece of evidence that we had. The probability estimates were agreed after extensive and constructive conversations amongst the members of the evaluation team. This allowed the evaluation team to reach consensus on the probative value of evidence.

The list of probative values assigned can be found in Table 9 below.

Table 8: Process tracing test

Test	Interpretation	Sensitivity	Type 1 error
Expect to see/ hoop evidence	If the hypothesis is true, we would see it; the absence of it does not mean the hypothesis is not true.	Likely	Likely
Smoking gun	If observed it means the hypothesis is almost certainly true, however in its absence the hypothesis could still be true.	Very Likely/ Likely	Uncertain/ Likely
Doubly Decisive	If observed it means the hypothesis is almost certainly true, the absence of observing it suggests the hypothesis is almost certainly not true.	Very Likely	Very Unlikely/ Unlikely
Straw in the Wind	If observed it does not increase the likelihood of the hypothesis being true significantly, the absence of observing does not increase the likelihood of the hypothesis not being true significantly.	Uncertain/ Unlikely/ Likely	Uncertain/ Unlikely/ Likely

Conduct data collection and update confidence about the claim

After collecting the results from the survey, the sensitivity and type-1 error values were inputted for each evidence piece from each organisation. So, for example below in Table 9 we have a VCSE organisation that had a reduction of energy usage of less than 5% – based on weightings given in Table 9 – we would have a sensitivity of 0.8 and a type-1 error of 0.1.

Table 9: Example evidence of assigning Sensitivity and Type 1 error probabilities

Evidence Number	Variable	Question number(s)	Variable description	Rationale	Thresholds	Sensitivity	Type-1
E4	Change in Energy Use	Q35	Percentage change in energy usage	Indicates changes in energy usage before and after EES funding that may indicate contribution	Energy usage decrease by more than 10%	0.9	0.1
					Energy decreased by between 5% and 10%	0.85	0.1
					Energy usage decreased by less than 5%	0.8	0.1
					Energy has not changed	0.45	0.6
					Energy usage increased by up to 5%	0.3	0.6

After assigning these values, the Bayes’ formula (see below) is applied to the evidence, in order to calculate the posterior probability of H being true.

Choosing the prior: A prior had to be chosen for the likelihood that a hypothesis is true without any of our new observed evidence. As this was an unprecedented situation and no evidence was available on what an appropriate starting point should be, a 50% prior was chosen, indicating it was uncertain.

Continuing with the example above, if we find evidence E4 and apply Bayes’ formula this results in a posterior probability of 0.89 (89%)– in other words, this has increased our confidence that H is true. This formula is described below ^{[footnote 63]}:

1 PE=PH×PHPH×PH+P~H×P~H

= 80%×50%80%×50%+10%×50%

=0.40.4+0.05

=89%

However, as we need to apply multiple pieces of evidence, not just one, we used the formulas 2 and 3 to get a posterior probability based on all the pieces of evidence. The % value would go up or down and robustness increases with the number of pieces of evidence.

2 PH= PHE1-n PHE1-n-1 PHE1-n-2 PHE1-n-3…

3 P~H= P~HE1-n P~HE1-n-1 P~HE1-n-2 P~HE1-n-3…

So, to continue the example above, if there was the following sensitivities and type 1 errors for additional evidence:

Table 10. Example allocating sensitivities and Type 1 errors

Evidence	Sensitivities	Type 1 error
E4	0.8	0.1
E5	0.35	0.6
E6	0.3	0.65

P(E	H)=0.8×0.35×0.3=0.084 (8.4%)

P~H=0.1×0.6×0.65= 0.039 (3.9%)

PE=PH×PHPH×PH+P~H×P~H

= 8.4%×50%8.4%×50%+3.9%×50%

=0.0420.042+0.0195

=51%

After including additional evidence, it has decreased the likelihood of H being true arriving at a final probability value. This approach was applied to every organisation that answered the survey. This then allowed us to make the statements based on groupings of organisation made in the main report e.g. x% of VCSE organisations had more than an 70% likelihood that the EES contributed to reducing VCSEs’ energy usage.

Any organisation with no evidence – and therefore a 50:50 chance of a true hypothesis – was excluded from our analysis.

Evidence pieces

Table 11 below identifies the pieces of evidence (E1, E2 etc.) which will be based on analysis of the ‘impact’ questions from the survey and the hypotheses to which they relate:

Table 11: Hypotheses and evidence pieces used in impact assessment

Hypothesis	Evidence Piece	Survey Questions	Metric	Rationale
H1: Improvement in VCSEs’ knowledge of energy efficient practices.	E1	Q9, Q10	Improvement in the VCSE knowledge of energy efficient practices.	Indicates changes in the level of knowledge that VCSEs have gained in terms of energy efficient practices.
H2: Reducing VCSEs’ energy usage through no cost (behavioural changes).	E2	MI data, Q11	Percentage change in energy usage.	Indicates changes in energy usage after EES that may be attributable to the funding.
H3: VCSEs’ energy bill savings	E3	Q12	Reduction in energy bills (amount of savings) as a result of the EES IEA ‘no cost’ behavioural measures.	Indicates the eventual cost savings resulting from changes that may be attributable to funding
H4: Reducing VCSEs’ energy usage	E4	Q35	Reduction in energy usage as a result of capital measures implemented through the EES IEA ‘no cost’ behavioural measures.	Indicates changes in energy usage before and after EES funding that may signal a contribution resulting from capital measures.
-	E5	MI data, Q11	Percentage change in energy usage post IEA ‘no cost’ behavioural measures implementation	Indication of changes in energy usage post EES IEA attributable to behavioural changes.
-	E6	Q12	Reduction in energy bills (amount of savings) as a result of the IEA ‘no cost’ behavioural measures implementation.	Energy bill savings can be driven by a reduction of usage indicating attributability.

The box below provides a worked example of the BPT approach.

Box 6: Bayesian process tracing method and example

BPT is the application of a mathematical theorem knows as the “Bayes Theorem” which is a mathematical formula for determining the conditional probability of an event. In the context of the EES, we are testing whether the “events” in our case “short-term outcomes” were conditional on whether a VCSE organisation participated in the EES.

Defining hypotheses^{[footnote 64]}:The hypothesis (or hypotheses, if multiple are being tested), need to be defined which for the EES relate to our expectations around the short-term outcomes. This step can include expert judgement and is usually based around outcomes identified in the ToC. To ensure the evidence is as accurate as possible, include specifics such as a time period to isolate the policy specific contribution

Example: Hypothesis: During the period from December 2023 to August 2024, the EES IEA contributed to reducing VCSEs’ energy usage through no cost (behavioural changes).

The hypothesis is assigned a “prior probability”^{[footnote 65]}, which is the probability that the hypothesis is true before any evidence is considered

Example: For the hypothesis above, this was 0.5 as no other evidence was available prior to collecting evidence through the EES IEA applicant successful survey. This says that the probability of the hypothesis being true is equally as likely as being false.

Gather background information and data:

Expert knowledge: Consult experts in the relevant field to understand the typical relationships between the hypothesis and the evidence
Empirical data: Consult empirical studies (where relevant), statistics or historical data that provide information on how often the evidence occurs when the hypothesis is true or false

Example: Data was collected through responses to specifically designed questions in the EES grantee survey and translated into the evidence pieces for updating prior probabilities.

Assess “Sensitivity”^{[footnote 66]} P(E given ~H)

Assessment: Determine how likely it is to observe the evidence if the hypothesis is correct. This is done by looking at the logical connections between the hypothesis and the evidence. The assessment can also be influenced by empirical studies that have measured the frequency of the evidence when the hypothesis is known to be true and experts’ estimation of likelihood based on their experience and knowledge can be used assess sensitivity

Example: Expert opinions were reviewed and discussed before decisions were made per scenario. For example, if a VCSE noted a decrease in usage greater than 10%, this was deemed more likely that the hypothesis was true** than a VCSE answering a decrease in usage of less than 5%, therefore were assigned a higher probability weight, say 0.8 compared to 0.7 in the latter scenario.

Assess Type 1 error ^{[footnote 67]} P(E∣¬H)

Assessment: Determine how likely it is to observe the evidence if the hypothesis is incorrect. By thinking logically about scenarios where the evidence might occur for reasons unrelated to the hypothesis. The assessment can also be influenced by empirical studies that have measured the frequency of the evidence when the hypothesis is known to be false and experts’ estimation of likelihood based on their experience and knowledge can be used to assess sensitivity

Example: Expert opinions were reviewed and discussed before decisions were made per scenario. For example, if a VCSE noted a decrease in usage greater than 10%, this was deemed less likely that the hypothesis was false than a VCSE answering a decrease in usage of less than 5%, therefore were assigned a lower probability weight, say 0.3 compared to 0.4 in the latter scenario.

Validate estimates

Cross-check: compare estimates with multiple sources to ensure they are reasonable. For example, compare estimates from experts with estimates from the literature, or with own estimates
Consistency: probabilities should be consistent with the known data (where relevant) and with logical reasoning
Sensitivity analysis: see how changes in probabilities affect the posterior probability^{[footnote 68]}

Example: Prior probability weight assignments were discussed with experts and reviewed. The final set of posterior probabilities were calculated for each VCSE and averaged. See technical annex for the formula used to calculate posterior probabilities.

Annex 4: VCSE interview selection process

This section explains the process undertaken for selecting the participants for the VCSE interviews. For the wave 2 research, the focus was to capture as many VCSEs as possible that had applied and were granted capital grant funding through the EES to ask early questions related to the capital measures, given the BPT (See Annex 3 above for detail) wasn’t able to capture hypotheses around capital installations. Using the capital grant funding MI data provided by Groundwork UK a list of organisations that applied for capital funding was used as the contact list. A mix of VCSEs that had an IEA through the EES and Capital grant as well as those that went straight to the capital grant stage were listed.

VCSEs were then selected at random to provide a random sample to interview. These organisations were reviewed in terms of their key characteristics: Region, organisational size (by turnover), main service theme to ensure a representative sample was selected.

A total of 27 VCSE interviews were conducted but a sample of 56 were contacted where learnings from the previous wave highlighted that there could be a lower than anticipated response rate. A two to one ratio of interviewees were contacted to ensure we reached 27 VCSEs.

Annex 5: economic evaluation methodology

This section provides the detailed methodologies applied to the expected cost and benefits estimation. The step-by-step calculations describe the assumptions and rationale applied to calculate the expected costs and benefits as used within the EES breakeven analysis.

Expected direct costs present value methodology

DCMS provided the actual and forecasted costs for the EES up to the end of January 2025. These costs included Programme spend (RDEL), capital expenditure (CDEL), administrative, assurance and evaluation costs of the EES, but did not include indirect costs of the EES which have been detailed above in section 5.5.2. These costs were disaggregated by month based on invoice payments. The forecasted costs were based on the expectations around additional financing needs in the remainder of FY24/25 and FY25/26.

There were several steps involved in the present value calculation as detailed below:

Step 1: Costs for the EES evaluation had not been split by EES and CCLF, therefore these were revised using Ecorys internal budgets, whereby an accurate reflection on the costs pertaining to the EES evaluation only could be apportioned. This included milestone payments for deliverables, workshops, and apportioning sub-contractor costs for the EES only. These estimates were used in place of the figures provided by DCMS. Additional expected evaluation activity was further refined by using the new budget provided to DCMS (subject to agreement). This is a more accurate reflection of future evaluation activity

Step 2: Assurance costs provided by DCMS were split evenly (50%) across the Community Organisations Cost of Living Fund (CCLF) evaluation and EES evaluation per month

Step 3: Once the cost adjustments were applied, HMT Green Book GDP deflators were projected and applied to all years post 2023. In 2023, the only cost that was adjusted related to an early output of the evaluation work (Evaluation plan)

Step 4: These estimates were then discounted using the Green Book approved 3.5% discount rate, to provide a present value for the total direct costs per month. These estimates were summed over the breakeven period

Expected IEA energy bill savings monetisation

The calculation of the expected energy bill savings from having completed an energy audit used the MI data variable of “2022 annual energy costs” for each of the individual VCSEs. Gas and electricity prices were projected forward to calculate changes in energy prices to be applied to the energy cost variable taken from the MI data, per VCSE. Assumptions were applied to account for deadweight and the likelihood of continuation of behavioural changes. Evidence from the European Economic Agency (EEA) highlighted that energy audits can lead to around 5% to 20%^{[footnote 69]} in energy savings, which was used as a low and high estimate (respectively) for energy bill savings from IEAs. Benefits were apportioned to the number of months per year over the appraisal period. For example, 2026 only covered January to March, therefore the benefits were apportioned for that year at 25%.

There were several steps involved in the calculation as detailed below:

Step 1: 20 VCSEs had included multiple IEA applications with the same total energy costs included in each application. The duplicate IEAs were removed to avoid duplicating “energy cost savings” that were provided as totals across all their buildings. For example, a VCSE provided an energy cost saving of £100,000 for each of their 5 IEA applications. This reflected the total energy cost saving of all their IEAs, rather than per IEA. So, a figure of £100,000 was used rather than £500,000
Step 2: Using the publicly available government dataset on gas and electricity prices from the non-domestic sector (see: Statistical data set: Gas and electricitiy prices in the non-domestic sector), quarterly year-on-year prices changes between 2023 and 2026 were calculated. Year-on-year percentage changes in price were calculated to account for the variation experienced in peak energy demand periods. Winter months for example would see an increase in energy demand and price changes calculated should calculated against these peak periods. Therefore, year-on-year percentage changes provide an element of smoothing of the time series and is less volatile compared to a quarter-on-quarter price changes being applied
Step 3: Changes in price between 2025 and 2026 were flatlined using the 2024 energy price. There is limited data on the projection of prices over the next two years, therefore the 2024 energy price was used, inflated over those years using the Green Book GDP deflators, rebased to 2024 prices. This is a limitation in the estimation of the baseline projection of energy costs. A low and high estimate was used to account for these uncertainties to some extent
Step 3.1: Adding a further layer of granularity to the estimation, prices were also available for organisations of varying sizes (by turnover). These were matched with the VCSE organisational size (by turnover) provided in the MI data. The only slight misalignment was with gas prices. Major and Super Major organisations had not been disaggregated, therefore the price change for Major and Super Major VCSE were the same for the gas price change
Step 4: Gas and electricity prices changes were averaged to provide one energy price change to apply to the 2022 energy cost per VCSE per organisation size. It is understood that each VCSE would use a variation in either the electricity or gas, however, a lack of data on energy prices meant the best alternative would be to provide an average of the two price changes. This is another limitation to consider of the analysis, however, a low and high estimate was used to account for these uncertainties to some extent
Step 5: The annual energy costs were projected forward for each VCSEs by applying the price changes. This analysis established a baseline of energy cost changes over the appraisal period
Step 6: Using the estimates taken from the European Environment Agency (EEA) report ^{[footnote 70]} energy audits were assessed to provide savings between 5% to 20% on the total energy costs. Applying these estimates as a high and low allowed for the calculation of a range of savings for each VCSE. It must be caveated that these estimates were from a 2013 paper so are over 10 years old
Step 7: After summing the projected energy savings across the VCSEs that had completed an energy audit, a deadweight estimate was calculated using the EES IEA applicant successful survey. Question 8 ^{[footnote 71]} was used to calculate the proportion of VCSEs that would have carried out an energy audit, regardless of the EES having been introduced. This proportion was 42% of respondents answering “very likely” or “fairly likely” to having undertaken an IEA
Step 8: An additional assumption applied to the calculation of energy saving benefits is whether the organisations had implemented the no cost behavioural measures. Question 10 ^{[footnote 72]} was used to apportion the VCSEs that implemented the no cost measures compared to those that did not. This was 59% of VCSE that had answered the EES survey question. The rationale behind this estimate is that given a VCSE has implemented no cost measures, energy bill savings are more likely to occur compared to those VCSEs that did not implement the no cost measures
Step 9: An additional assumption applied reflects the likelihood of VCSEs continuing to implement these measures over the appraisal period. Given the IEAs were a onetime reflection and review of the VCSEs energy efficiency practices, it is likely that over time, without additional training and support, behavioural changes may not be sustained. Question 13 ^{[footnote 73]} asked about the likelihood of continuation of these behavioural changes over the next six months. Responses of “completely” were assigned a weighting of 1, “somewhat” were assigned a weighting of 0.5 and “Not at all” were assigned a weight of 0. At month 0 all VCSE that implemented the no cost changes were assign a weighting of 1. Month 6, the proportion of VCSEs answering “completely” (41%), “somewhat” (59%) and “not at all” (1%) were applied to the energy savings projections. In the next 6 month periods following this, percentage changes were calculated for “completely”, 100% to 49%, translating to a fall of 59% of VCSE now selecting “somewhat” were applied, whereby month 36, virtually no VCSE had “completely” continued applying the no cost measures
Step 10: Once the assumptions above had been applied to the projected energy bill savings estimates, HMT Green Book, GDP deflators were applied to each year (2024 onwards)
Step 11: These estimates were then discounted using the Green Book approved 3.5% discount rate, to provide a present value for the low and high estimate. These estimates were summed over the breakeven period

Expected capital grantee energy bill savings monetisation

The calculation of the expected energy bill savings from capital measures used the MI data provided on “estimated annual energy cost savings (£)” per VCSE. Estimates taken from the MI data only cover the 311 VCSEs awarded a capital grant at the time of receipt of the data. Four VCSEs had already implemented their capital measures at this point, so benefits accruing for these four organisations began earlier than for the full 311 sample of VCSEs. Assumptions were applied to account for deadweight (see Annex 5). Given the mix of capital measures installed, there is significant variability in the depreciation rate of the technologies concerned and this was not included in the benefits assessment calculation. This is a limitation of the breakeven analysis however, depreciation for these technologies over the breakeven period is likely to be minimal, particularly for heat pump installations. Where it could have more significance is with LED lighting etc. that has shorter lifespans. This will be considered in the next phase of the economic assessment.

There were several steps involved in the calculation as detailed below:

Step 1: The capital grant application data provided estimates from grantees IEAs around the “estimated annual energy cost savings (£)” from the installation of the capital measures. This variable was used for the capital grantees as the energy bill saving estimate
Step 2: Given this figure was provided at the capital application stage, it was assumed this would be the estimate for 2024 savings, when the applications had been completed
Step 3: Deadweight was then calculated using the estimates derived through the EES IEA applicant successful survey for question 39 ^{[footnote 74]}. The proportion of organisations that would not have been able to pay to install one or more of the energy efficiency measures was 88%. Therefore, 12% of the VCSEs were considered as deadweight, those that could have funded the measures in the absence of the EES capital grant funding. This estimate was applied to the sum of the total energy cost savings estimates for VCSEs that were capital grantees. Four VCSEs had already implemented their capital measures at the time of the data share so benefits accruing for these organisations began earlier than the full 311 sample of VCSEs
Step 4: Once the assumptions above had been applied to the projected energy bill savings estimates, HMT Green Book GDP deflators were applied to each year 2024, 2025 and 2026. (Also, beyond this horizon for the Breakeven analysis)
Step 5: Once the assumptions above had been applied to the projected energy bill savings estimates, HMT Green Book, GDP deflators were applied to each year (2024 onwards)

Expected capital grantee carbon savings monetisation

The calculation of the expected carbon savings from capital measures used the MI data provided on “estimated annual energy savings (kWh)” per VCSE. MI data was provided on the estimated carbon reduction; however, this data was not reliable as estimates had varying horizons over which carbon reduction was likely calculated. These also used the energy assessor estimates from the IEAs, which also varied in approach. The large number of unique assessors conducting the IEAs added to the uncertainty around the carbon saving value. Some estimates were also missing. The variable used was on expected annual energy savings in kWh. Carbon emission factors were taken from DESNZ for consumption source (electricity and natural gas) and multiplied by the expected energy savings and monetised using Green Book approved carbon values. Assumptions were applied to account for deadweight. Given the mix of capital measures installed, there is significant variability in the depreciation rate of the technologies and this was not included in the calculation. As described above, the exclusion of a depreciation rate should not make a significant impact on the breakeven analysis which is a 10 year horizon.

There were several steps involved in the calculation as detailed below:

Step 1: The estimation of carbon savings followed the approach adopted in the EES FBC. Firstly, for each of the VCSEs that were awarded a capital grant, the variable “estimated annual energy savings (kWh)” was used from the “capital budget items approved” MI data. These are all the VCSEs that were awarded and accepted the offer from Groundwork UK for capital grant funds
Step 2: The latest emission factors were taken from the UK government dataset: “Greenhouse gas reporting: conversion factors 2024”^{[footnote 75]} for electricity and natural gas. These were 0.20705 kgCO₂e and 0.20264 kgCO₂e, respectively. These emission factors were averaged to provide one overall emissions factor for energy savings to be multiplied by the estimated annual energy savings (kWh) variable. This is a limitation of the methodology and should be treated with caution in the interpretation of the benefits estimate
Step 3: The emission factor was then converted to tonnes of CO₂e (dividing by 1000) and multiplied by the energy savings estimate for each VCSE
Step 4: Green Book approved carbon values (Annex 1: Carbon values in £2020 prices per tonne of CO2) were then rebased to 2024 prices using Green Book approved GDP deflators. These are then multiplied by the tonnes of CO₂e emissions savings of each VCSE for the low, medium and high carbon value estimates. This provides the carbon savings per VCSE
Step 5: Once the carbon savings estimates were summed across all the 311 VCSEs, these estimates were then discounted using the Green Book ap

proved 3.5% discount rate, to provide a present value total carbon saving estimate from capital measures. This estimate was then summed over the breakeven assessment period

Breakeven analysis results and costs and benefits detail

Taking a conservative approach to estimation and projection, monetised benefits would need to be sustained over a period of 5-9 years post-EES in order for the scheme to recoup the expected direct costs (see Figure 26 above). Including the benefits from carbon savings brings forward the expected breakeven point of the scheme to between 4 to 8 years (See Figure 27 above). It must be noted that other indirect costs and non-monetised benefits have not been included in this assessment. In the next phase of the evaluation we will look to provide a more comprehensive picture, particularly with finalised cost data.

The benefits monetised in this assessment are the expected energy bill savings from both the IEA and capital measures and the expected carbon savings from the capital measures (see step-by-step methodologies above for full details, including the assumptions used). The full population of VCSEs that received an IEA, and a sample of 311 (out of 329) VCSEs that had been awarded a capital grant, was used in this estimation. Some of the benefits monetised, carbon savings for example, can accrue well into the future given their impact on climate change. These types of impacts are usually generational, albeit appraising over that period also results in increasingly uncertain projections. The focus of further evaluation of the EES should consider monetising, where possible, other non-monetised benefits which were not possible at this stage in the evaluation.

The costs used are taken from data provided by DCMS, Groundwork UK, and Ecorys’ internal budget for planned evaluation activity. These include staffing, administrative costs, assurance, IEA delivery, capital grants and evaluation costs. There were some indirect/unexpected costs that have not been included, such as structural costs incurred by capital grantees as a requirement of installing measures.

Annex 6: process evaluation tables and figures

Table 12: How organisations heard about the EES

	Successful	Unsuccessful
Through your organisation/a colleague	13.2 %	15.3 %
Through your landlord / building owner	0.7 %	1.1 %
Through an independent energy assessor	1.2 %	0.5 %
From Groundwork UK or Groundwork Trusts	24.1 %	15.8 %
From Energy Saving Trust	0.0 %	2.2 %
From Centre for Sustainable Energy	0.7 %	0.5 %
From Social Investment Business (SIB)	0.0 %	0.5 %
From Locality	5.3 %	2.7 %
From the Department for Culture, Media and Sport (DCMS) or another UK Government Department	3.5 %	1.6 %
The gov.uk website	3.2 %	1.1 %
Through the find a grant website	8.1 %	10.9 %
From another membership body or network, other voluntary, community or social enterprise organisations, or other organisations that you work with	22.0 %	23.5 %
On social media	1.9 %	1.6 %
A search engine	3.0 %	4.4 %
Traditional media (e.g. newspaper, radio, online news site)	0.5 %	1.1 %
Other (please specify)	9.0 %	12.0 %
Don’t know	3.7 %	4.9 %
Total	100.0 %	100.0 %

Source: VCSE IEA applicant survey. Successful IEA applicants (n=432), unsuccessful IEA applicants (n=183)

Table 13: Satisfaction with aspects of the IEA application process

Applicant type	Successful	Unsuccessful
Satisfaction level	Satisfied	Dissatisfied	Satisfied	Dissatisfied
Information about the aims and objectives of the IEA	79 %	5 %	51 %	14 %
(If applicable) The webinar held about the IEA application process*	29 %	2 %	12 %	6 %
Clarity on the eligibility criteria for applying for an IEA	83 %	7 %	47 %	28 %
The ease of completing the IEA application form	58 %	26 %	44 %	31 %
The IEA application form guidance notes and documents	73 %	10 %	51 %	19 %
(If applicable) The level of support received from Groundwork UK for completing the IEA application**	44 %	11 %	15 %	20 %
The amount of information your organisation needed to provide for the IEA application	48 %	32 %	32 %	36 %
The length of time from submitting the application form to hearing the decision on the IEA	56 %	27 %	44 %	20 %

Source: VCSE IEA applicant survey. Successful IEA applicants (n=432), unsuccessful IEA applicants (n=183)

Figure 30: Reasons organisations did not apply for VCSE Energy Efficient Scheme capital grant

Source: Successful IEA applicant survey (n=100).

Figure 31: Organisations’ experience of applying for the capital works grant through the EES – Successful IEA applicants {figure_31}

Figure 31: Organisations' experience of applying for the capital works grant through the EES – Successful IEA applicants

Source: Successful IEA applicant survey (n=328)

Figure 32: Organisations’ experience of applying for the capital works grant through the EES – Unsuccessful IEA applicants

Figure 32: Organisations' experience of applying for the capital works grant through the EES – Unsuccessful IEA applicants

Source: Successful IEA applicant survey (n=50)

Table 14: Average FTE staff and volunteers for IEA and grant recipients

IEA Recipients	Grant Recipients
Average FTE Staff	Average Volunteers	Ratio	Average FTE Staff	Average Volunteers	Ratio
45	105	2.32	9	45	4.80

Table 15: Average age of buildings

Applicant type	Successful	Unsuccessful	Withdrawn	Grand Total
100+ Years	34%	31%	18%	32%
20-50 Years	27%	28%	45%	28%
50-100 Years	26%	30%	20%	27%
Don’t know	4%	2%	10%	3%
Less than 20 years	10%	9%	8%	10%

Source: IEA applicant data (n=1,782)

Figure 33: Percentage of applicants’ annual expenditure on energy

Source: IEA applicant data (n=1,147)

Figure 34: Number of Recommendations per IEA Category

Source: IEA reports (n=1,147)

Figure 35: Likeliness of whether an organisation would pursue an energy audit through other means, if unsuccessful

Source: Successful IEA applicant survey (n=432)

Figure 36: Reasons why the recommended energy efficiency measure(s) had not yet been installed

Source: Successful IEA applicant survey (n=102)

Table 16: Flow of applicants through the EES

IEA application outcome	Capital grant application outcome
	Approved	Approved but VCSE did not accept the grant	Unsuccessful	Did not apply
Successful	278	16	363	497
Unsuccessful	1	0	3	591
Withdrawn	0	0	2	38
Did not apply	43	2	73	-

Source: Management Information data from Groundwork UK for IEAs and Capital Grants

The CCLF was a £76 million package of funding for frontline VCSE sector organisations in England facing increased demand for their services and increased delivery costs. ↩
The VCSE Cost of Living Advisory Board was comprised of experts from different VCSE organisations / membership bodies, and was set up to advise on the design of the VCSE Cost of Living scheme, and support its implementation, by advertising the programme through its networks. The Board was updated on a monthly basis on the progress of EES delivery. ↩
Due to timings for needing the sample to contact for the survey, it was not possible to invite all capital grant applicants (as data was not yet available). ↩
Hypothesis 1: “During the period from December 2023 to August 2024, the EES IEA contributed to improving VCSEs’ knowledge of energy efficient practices” ↩
Hypothesis 3: “During the period from December 2023 to August 2024, the EES IEA contributed to VCSEs’ energy bill savings“ and Hypothesis 4: “During the period from December 2023 to August 2024, the EES IEAs contributed to reducing VCSEs’ energy usage.” ↩
Hypothesis 2: “During the period from December 2023 to August 2024, the EES IEA contributed to reducing VCSEs’ energy usage through no cost (behavioural changes).” ↩
The Community Organisations Cost of Living Fund (CCLF) was the other part of the package. The CCLF was a £76 million package of funding for frontline VCSE sector organisations in England facing increased demand for their services and increased delivery costs. ↩
‘Programme partners’ refers to stakeholders from DCMS and from the IGM consortium. ↩
The VCSE Cost of Living Advisory Board was comprised of experts from different VCSE organisations / membership bodies, and was set up to advise on the design of the VCSE Cost of Living scheme, and support its implementation, by advertising the programme through its networks. The Board was updated on a monthly basis on the progress of EES delivery. ↩
This related to the type of service delivered, e.g. poverty, food provision, warmth and emergency supplies; Education & employability; Physical and mental health support; advice; shelter ↩
Due to timings for needing the sample to contact for the survey, it was not possible to invite all capital grant applicants (as data was not yet available). ↩
For example: Rothgang, M., & Lageman, B. (2021). The unused potential of process tracing as evaluation approach: The case of cluster policy evaluation. Evaluation, 27(4), 527–543. https://journals.sagepub.com/doi/full/10.1177/13563890211041676; Wadeson, A., Monzani, B. and Aston, T. (2020) Process Tracing as a Practical Evaluation Method: Comparative Learning from Six Evaluations, Befani, B., 2020. Diagnostic evaluation and Bayesian Updating: Practical solutions to common problems. Evaluation, 26(4), pp.499-515. ↩
The full detail of how this methodology was carried out and further detail on outputs is given in Annex 5. ↩
VCSEs could apply for an IEA via the EES, or, if they had already had an IEA undertaken in the 2 years prior to applying to EES, they could use that for the capital grant application. ↩
Indeed, around a quarter (n=49) of unsuccessful applicant survey respondents said that they were not aware of the EES grant funding, suggesting that having an IEA completed was a key way to learn more about the capital funding opportunity. ↩
EnergySharp team members could not suggest specific suppliers, but could share a database on suppliers for VCSEs to choose from. This was to ensure that VCSEs did their own due diligence. ↩
Feedback from 199 survey respondents, comprised of n=149 from the successful survey and n=50 from the unsuccessful IEA applicant survey. ↩
These were: the organisation was not: directly supporting individuals and communities with critical needs, particularly those related to the rising cost of living; not significantly impacted by energy concerns; the organisation’s size did not align with the priorities of the funding; the application was felt not to represent best value for money; and ineligibility. ↩
The question wording in the application was slightly different for IEAs and capital grants, so a direct comparison of targeted vs non-target support is not possible. ↩
These proportions were generally the same for unsuccessful IEA applicants. ↩
EPC ratings range from A (very efficient) to G (not efficient at all). ↩
There is limited evidence for comparability, but the VCSE Barometer results for 2025 indicated that of the 665 survey respondents, average expenditure on energy was 7%. (see: [Nottingham Trent University (2025) VCSE Barometer]. Available from: (https://www.ntu.ac.uk/research/groups-and-centres/projects/vcse-data-and-insights-national-observatory/vcse-barometer-survey)) ↩
The exact form of this advice is unknown, as it was not asked in the survey. ↩
Results were calculated from the EES IEA applicant successful survey ↩
Results were calculated from the EES IEA applicant unsuccessful survey – this ranged from slight to complete improvement. ↩
Each of the categories are defined as: Complete improvement - “I feel fully knowledgeable and can teach others or lead in this area.”, Significant improvement – “I can apply the knowledge in most contexts with confidence.”, Moderate improvement – “I can apply what I have learned in some contexts.”, Slight improvement – “I have gained a basic understanding.”, No improvement – “I have not learned anything new.” ↩
Totals may not sum to 100% due to rounding. ↩
Data taken from: Q9 EES IEA applicant successful survey - To what extent has the IEA process improved organisations’ knowledge of energy efficiency practices? Q11 EES IEA applicant unsuccessful survey - Thinking about the time between applying for an EES IEA and now, to what extent would you say that your organisation has improved its knowledge of energy efficiency practices? ↩
See: European Environment Agency (2013) ‘Achieving energy efficiency through behaviour change: what does it take?’, Technical report No 5/2013. Available at: https://www.eea.europa.eu/en/analysis/publications/achieving-energy-efficiency-through-behaviour (Accessed: 9 March 2025). This highlights the relatively small changes in energy efficiency that could be experienced through the implementation of ‘no cost’ measures. ↩
See: European Environment Agency (2013) ‘Achieving energy efficiency through behaviour change: what does it take?’, Technical report No 5/2013. Available at: https://www.eea.europa.eu/en/analysis/publications/achieving-energy-efficiency-through-behaviour (Accessed: 9 March 2025). This highlights the relatively small changes in energy efficiency that could be experienced through the implementation of ‘no cost’ measures. ↩
“n” does not sum to 1,147 as multiple measures were selected per VCSE ↩
Keywords were extracted across the full sample of successful IEA applicants and the sample of capital grant grantees awarded, as of end January 2025, on their financial health. As Table 1 shows, out of all recipients and grantees, the primary financial health impact cited related to a depletion of financial reserves. A small percentage (5% and 3%) across both applications did use phrases, however, suggesting that there was no impact on their financial health – signalling some organisations may not have been significantly in need of the EES support. Interestingly, capital grantees seemed to have been most affected by the energy price hikes, having a larger proportion of firms whose applications referenced negative outcomes associated with their organisation’s financial position. This may also be a result of VCSEs expressing their financial situation more clearly when applying for a large capital grant as opposed to just applying for an IEA. ↩
N.B. that these are not the exact words or phrases used, but rather categorised ‘summary’ words/phrases to enable analysis ↩
Proportions less than 5% have not been labelled on the figure ↩
The National Audit Office’s 4Es approach helps assess whether government policies deliver good value for money by looking at Economy, Efficiency, Effectiveness, and Equity. It checks whether public money is spent wisely, services are delivered well, goals are achieved, and everyone is treated fairly. ↩
The GDP price deflator measures the reduction in the value of all of the goods and services produced in an economy when inflation is taken into account. GDP price deflator = (Nominal GDP/Real GDP) ×100 ↩
There are a few elements that make up the discount rate: The long-term consumption growth rate, changes in consumption as income grows, and the social time preference. ↩
The Green Book: Central Government Guidance on Appraisal and Evaluation. ↩
Social value refers to the positive impact, beyond financial gain, that an activity, organisation, or intervention has on people, relationships, and communities, contributing to a more positive and equitable society. It can incorporate financial, environmental and wellbeing value to society. ↩
EnergySharp survey responses – delivered by the IGM consortium. 64 respondents provided survey feedback. ↩
The EES Full Business Case was provided by DCMS to Ecorys at the start of the evaluation. ↩
The range from the EES FBC was calculated by dividing the total IEA funding allocation of £3.4m by an upper and lower cost of IEAs sourced through DCMS’ internal research and consultations. The cost range for an IEA was expected to be between £1,250 to £3,125. ↩
Groundwork spent £2.8m on conducting the IEAs, some of the underspend was reallocated to provide EnergySharp support and some moved to capital grants. £2.8m divided by the total amount of IEAs delivered (1147 plus the 9 re done) = £2,442 average. ↩
Figure taken from MI data “Final IEA uploads” shared by Groundwork UK ↩
The estimates for the distribution of VCSEs has been taken from NCVO: Sector location - ProfilE, UK Civil Society Almanac 2023, NCVO ↩
‘Micro’ is defined as less than £10,000 income per year, ‘Small’ is defined as £10,000–£99,999 income per year, ‘Medium’ is defined as £100,000–£999,999 income per year, ‘Large’ is defined as £1,000,000–£9,999,999 income per year and Major is defined as greater than £10,000,000 income per year. ↩
The methodology used to discount the expected costs can be found in Annex 5 below. ↩
The central estimate for carbon values in the HMT Green Book refers to the standard, mid-range value assigned to one tonne of CO₂ equivalent emissions, based on the UK government’s guidance. It reflects the estimated cost of reducing emissions in line with the UK’s net zero target and is used in economic appraisals to value the impact of greenhouse gas emissions. ↩
This figure is taken from the Energy Efficiency Scheme Full Business Case – proposed budget outline. ↩
This is the spending limit set by the Treasury for a government department’s day-to-day, or resource, spending, distinct from capital (investment) spending. ↩
Due to rounding, sum columns rows may not sum accurately. ↩
The proposed budget was taken from the EES FBC ↩
The RDEL profile at the time needed to be negotiated with HMT as part of Supplementary Estimates ↩
£100k of this is for internal DCMS admin costs in 23/24; £1.6m will be going to the IGM ↩
Question 21 of the EES IEA applicant successful survey asked: Thinking about the process of applying for the capital grant, what were the main costs (financial or resource-wise) associated with this? Total response rate was 328 VCSEs for this query. ↩
Question 21 of the EES IEA applicant successful survey asked: Thinking about the process of applying for the capital grant, what were the main costs (financial or resource-wise) associated with this? Total response rate was 328 VCSEs for this query. ↩
Question 21 of the EES IEA applicant successful survey asked: Thinking about the process of applying for the capital grant, what were the main costs (financial or resource-wise) associated with this? Total response rate was 328 VCSEs for this query. ↩
Question 38(a) of the EES IEA applicant successful survey asked: The installation will have a positive impact on the organisation’s ability to cover the costs of future service delivery e.g., maintain current level of service delivery. This is the proportion of participants answering “strongly agree” or “agree” out of 168 total responses for this question. ↩
Question 38(b) of the EES IEA applicant successful survey asked: The installation will have a positive impact on the organisation’s ability to increase levels of service delivery. ↩
Due to the evaluation timescales being concurrent with the EES delivery (i.e. both end in March 2025), it will not be possible to assess in the evaluation if all measures have been installed. Rather, where possible we will distinguish between those installed and those planned to be installed (i.e. where grant applications have been approved but at the point of data capture for the evaluation, they have not yet been installed) ↩
For example: Rothgang, M., & Lageman, B. (2021). The unused potential of process tracing as evaluation approach: The case of cluster policy evaluation. Evaluation, 27(4), 527–543; Wadeson, A., Monzani, B. and Aston, T. (2020) Process Tracing as a Practical Evaluation Method: Comparative Learning from Six Evaluations, Befani, B., 2020. Diagnostic evaluation and Bayesian Updating: Practical solutions to common problems. Evaluation, 26(4), pp.499-515. ↩
Befani (2020) UKES / CECAN Online Masterclass Bayesian Updating (Diagnostic Theory-Based Evaluation) ↩
Key terms described in this formula are as follows: Posterior probability, P(H given E): probability the hypothesis is true given the observed evidence. Sensitivity (likelihood), P(E given H): probability of observing the evidence given the hypotheses is true. Type 1 error (inverse likelihood) – P(E given ~H): the probability of observing the evidence given the hypothesis is false. Prior probability – P(H) / P(~H): probability of the hypothesis being true / false based on background information. ↩
A hypothesis is a statement about a causal relationship that is formulated and clearly defined. ↩
This is the likelihood of the outcome, discussed with experts and based on current knowledge, and assigned before evidence is collected. ↩
Sensitivity is the probability of observing the evidence given that the hypothesis is true. ↩
Type 1 error is the probability of observing the evidence given that the hypothesis is false. ↩
The statistical probability that a hypothesis is true calculated in the light of relevant observations. ↩
European Environment Agency (2013) ‘Achieving energy efficiency through behaviour change: what does it take?’, Technical report No 5/2013. Available at: https://www.eea.europa.eu/en/analysis/publications/achieving-energy-efficiency-through-behaviour (Accessed: 9 March 2025) ↩
European Environment Agency (2013) ‘Achieving energy efficiency through behaviour change: what does it take?’, Technical report No 5/2013. Available at: https://www.eea.europa.eu/en/analysis/publications/achieving-energy-efficiency-through-behaviour (Accessed: 9 March 2025) ↩
Question 8 of the EES IEA applicant successful survey asked: If your organisation had been unsuccessful when applying for an IEA through the EES, how likely is it that your organisation would have pursued an energy audit through other means? ↩
Question 10 of the EES IEA applicant successful survey asked: Have you implemented any of the no cost (behavioural) recommendation(s) included in your energy assessment report? ↩
Question 13 of the EES IEA applicant successful survey asked: To what extent, if any, do you think these no cost behavioural changes will be maintained for the next six months? ↩
Question 39 of the EES IEA applicant successful survey asked: In the absence of the EES capital grant funding, would your organisation have paid to install one or more energy efficiency measures covered by the EES? ↩
https://www.gov.uk/government/publications/greenhouse-gas-reporting-conversion-factors-2024: These emission conversion factors are for use by UK and international organisations to report on certain 2024 greenhouse gas emissions. Published by DESNZ. ↩

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Executive summary

Overview of the energy efficiency scheme

Evaluation of the EES

Process evaluation findings

Impact evaluation findings

Economic evaluation findings

Recommendations

1.0 Introduction

1.1 Background and context

1.2 Overview of the evaluation

1.3 Methodology

1.3.1 Interviews

1.3.2 Surveys

1.3.3 Analysis of management information data

1.3.3.1 Limitations

1.4 Report structure

2.0. Process evaluation: design and early implementation

Key findings

2.1 Design

2.1.1. Views on the design of the EES

2.2. Effectiveness of the design phase

2.2.1. What worked well

2.2.2. What worked less well

2.3. Assessor recruitment

2.4. Engagement, application processes and decision-making

2.4.1. Initial communications and outreach

2.5. Application processes

2.5.1. Experiences of applying for an IEA

2.5.2. Effectiveness of EnergySharp

2.5.3. Experiences of applying for a capital grant

2.6 Decision-making

2.6.1 What worked well

2.6.2. What worked less well

3.0 Process evaluation: delivery

Key findings

3.1. Scheme reach

3.2 IEA Project Delivery

3.2.1. VCSEs’ experience of energy audits

3.2.2. IEA assessor experience

3.2.3. Recommendations made

3.2.4. What would have happened in the absence of getting an IEA through the scheme

3.3 Capital grants project delivery

3.3.1. Effectiveness of the Capital Enabler service

3.3.2. Experiences of delivering capital grant projects

3.3.3. Measures funded

3.3.4. What would have happened in the absence of getting capital grant funding through the scheme

3.4. Overall effectiveness of grant management

4.0 Outcomes and expected impacts

Key findings

4.1. Short term outcomes

4.1.1. Improved knowledge of energy efficient practices

Box 1: process tracing results for likelihood of EES contributing to organisations’ increased knowledge of energy efficient practices

4.1.2. Energy efficient consumption

4.1.2.1. VCSE behavioural change to energy efficiency: IEA recommendations

Box 2: Process Tracing results for likelihood of EES contributing to organisations energy usage reduction from ‘no cost’ behavioural changes

4.1.2.2. Capital measures and energy usage reduction

Box 3: Process Tracing results for likelihood of EES contributing to organisations energy usage reduction

4.1.3. Energy bill savings

4.1.3.1. IEA energy bill savings

4.1.3.2 Capital measures energy bill savings

Box 4: process tracing results for likelihood of EES IEAs contributed to organisations energy bill savings

4.2. Medium to longer-term outcomes/ impacts

4.2.1. Financial resilience

4.2.2. Service delivery

4.2.3 Working conditions

5.0 Economic evaluation

Key Findings

5.1. Overall value for money

5.1.1. Introduction: early economic evaluation

5.2 The 4E’s EES VfM assessment

5.2.1 Economy

5.2.2 Efficiency

5.2.3. Effectiveness

5.2.4. Equity

5.3 Breakeven analysis

5.4 Costs assessment (to date)

5.4.1 Direct costs

5.4.2 Indirect/ unexpected costs

5.4.3 Non-monetised expected benefits