Labour has called on the Government to explain a £1 billion “cut” to its flagship green home upgrade scheme as official figures highlight delays affecting the programme.

The £2 billion Green Homes Grant scheme included £1.5 billion for householders to claim vouchers from the end of September 2020 towards paying for measures such as insulation and low-carbon heating.

But data published by the Business Department (Beis) on Thursday shows slow progress for householders getting applications approved and that tradesmen are waiting – sometimes for months – to be paid for hundreds of installations.

The figures come after ministers confirmed only £71 million of the £1.5 billion pot had been spent by late January, and the underspend would not be rolled over into the next financial year.

The scheme was due to finish next month, but the household vouchers part of the programme was extended until March 2022, and £320 million was announced for the scheme in 2021/22.

Nothing could more clearly demonstrate the hollowness and hopelessness of this Government’s green commitments

Labour said that even with £320 million for the next financial year, more than £1 billion will have effectively been cut from the programme.

The figures from Beis reveal that less than two-fifths (38%) of the 69,000 households who have applied for the vouchers, which provide up to £5,000 or £10,000 towards energy efficiency measures depending on circumstances, have been approved for their work to go ahead.

More than 17,000 households have been waiting since the first month of the scheme for approval.

Of more than 100,000 vouchers – which each cover a different piece of work such as loft insulation, double glazing, new doors or heat pumps to replace boilers – that have been applied for, just 21,000 have been issued.

The figures also reveal the delays in paying installers for their work, with just 904 vouchers paid for 2,777 measures installed.

Work on hundreds of installations remains unpaid several months after it was completed, the figures to the end of January show.

They back up findings from a survey from industry bodies which revealed three-quarters of installers taking part in the scheme were concerned about the time it takes to receive voucher payments, and a third warned the delays were threatening the viability of their businesses.

Shadow business secretary Ed Miliband has written to Business Secretary Kwasi Kwarteng calling for answers over the scheme, which has been contracted to US company ICF to run.

Mr Miliband said: “The revelation that the Green Homes Grant scheme is being cut by more than £1 billion is a major blow to businesses and homeowners across the country.

“Nothing could more clearly demonstrate the hollowness and hopelessness of this Government’s green commitments.

“With only six weeks left this financial year, businesses and homeowners are desperate for clarity.”

Labour also said the Government was continuing to refer to £2 billion funding for the scheme, despite its admission that the underspend would not be carried over.

“The Business Secretary must come clean and level with the public by explaining why he has cut investment in this crucial scheme – and why he keeps referring to funding he knows full well he has pulled,” Mr Miliband said.