More than £50 million will be returned to central government that was meant to be spent on improving the energy efficiency of homes.

Of that amount, £22m has already been returned and the Cambridgeshire and Peterborough Combined Authority’s Board agreed the return of a further £33.35m at a meeting on August 31.

The returned money could be made available to similar schemes, or could be returned to HM Treasury.

The Department for Business, Energy and Industrial Strategy awarded the Combined Authority £78.35m of funding towards improving energy efficiency of homes in the south east of England.

The Green Homes Grant, also known as the Local Authority Delivery (LAD2) programme, focussed on low income and low EPC rated households.

It hoped to help tackle fuel poverty by improving energy efficiency and therefore reducing energy bills, as well as aiming to “deliver cost effective carbon savings” and progress towards the UK’s target for net zero by 2050.

The Combined Authority was managing the scheme across 136 local authorities.

A report presented to the Board highlighted that the impact on Cambridgeshire and Peterborough specifically of the money being returned was a reduction of less than £2m.

As of the end of July, the scheme had delivered 1,376 measures to 860 households, and it said work was ongoing to “maximise” the delivery of the scheme in the time remaining.

Extensions to the scheme had been approved by the government to allow the work to continue, but the authority has been told that further extensions will not be given.

The report said delays in contracting, the availability of a national supply chain and the local authority capacity to deliver projects, resulted in the Combined Authority not spending the money in the project timeframe.

Councillor Lucy Nethsingha, leader of Cambridgeshire County Council, said it was “disappointing” that the scheme had not achieved all that it could have done.

She said the aims of the scheme were “absolutely crucial” particularly due to the costs of living crisis, but said it was right to hand the money back to be spent elsewhere.

Cllr Chris Boden, leader of Fenland District Council, said the situation the Combined Authority had found itself in was “regrettable”.

He said he recognised there were difficulties faced, but said other parts of the country had not had the “same levels of difficulty the Combined Authority appeared to have had”.

Cllr Boden said he was worried about the authority’s reputation with the government after having to hand back large amounts of money.

He added there should be some “introspection” to understand why the authority’s performance had been different to elsewhere.

Mayor Dr Nik Johnson said: “I share the frustrations, reservations knowing that the Combined Authority has not delivered as it could have done.

“Undoubtedly issues around capacity within our organisation at a senior level.

“I know we have the benefit of a world class chief executive who is working with new appointees to deal with this.”

Dr Johnson said that the problem is like “a slow oil tank”, but is hopeful that it can be turned around.

“We are turning it around,” he said.

“It still is not as we would have wanted it, but we are introspective, we are learning from these.

“We are looking forward and getting a pipeline of work, making sure that we are training up people in the local areas.”

Dr Johnson added: “Maybe on this occasion, we were trying to run before we could walk in terms of taking on huge responsibility.

“Almost 50 per cent of the country, you look back on that now and say that was a mistake, but we learn from those.”

The extension of the scheme has also delayed the delivery of a subsequent scheme.

The Board also heard yesterday that the Combined Authority is expecting to return further money from the Sustainable Warmth project due to delays starting it.

The meeting heard that this will not impact the local authorities in Cambridgeshire or Peterborough.