British Gas has announced plans to cut hundreds of jobs in an efficiency drive that will see its loft and cavity wall insulation business close.
The job loss proposals follow a wide-ranging review carried out by parent company Centrica which announced that British Gas would adopt a new strategy to deliver its services cost effectively.
As a result, the majority of jobs to be lost will be from the closure of the company’s insulation arm. The exact figures will not be made clear until after a consultation process on the plans.
The company’s work under the Energy Company Obligation (ECO) scheme was also a factor in the decision to close the insulation business. ECO requires energy suppliers to deliver carbon savings through the installation of energy efficiency measures in domestic properties.
British Gas has installed around 560,000 measures since the scheme began in 2013 and is preparing to complete the remaining measures by the closure of ECO in March 2015. The measures are paid for by a levy on consumer bills, which British Gas says it has a responsibility to keep as low as possible.
A British Gas spokesperson told Clean Energy News today: “We’re expecting that we’re going to meet our ECO obligations in full. We reached our 2015 targets four months early and we’re well on our way to completing our 2017 obligation.
“We have an obligation to levy ECO as cost effectively as we can to keep bills down to customers so we’ve concluded that carrying out the insulation measures ourselves is not the most cost effective for the business and therefore for our customers, which is why we are proposing to close this business down.”
British Gas is currently offering reduced cost boilers under the ECO scheme, and is considering buying carbon on the open market to meet its obligations.
Mark Hodges, chief executive of energy supply & services for British Gas in the UK and Ireland, said: “We are focused on improving the efficiency and effectiveness of our organisation to meet the changing needs of our customers. British Gas is well positioned to grow, but we must ensure that our costs allow us to be competitive for our customers.
“I recognise that this will be difficult news for the employees who may be affected. However I believe [this] announcement is in the best long-term interests of the business. Our priority is to support all those potentially impacted, and to ensure a fair and transparent consultation process.”
