A £3 billion energy efficiency plan for homes and public buildings will support 140,000 jobs, save households money and cut carbon emissions, the Chancellor has said.

Rishi Sunak said rebooting the economy after the pandemic “is going to be a green recovery with concern for the environment at its heart”.

Campaigners welcomed the moves to invest in energy efficiency, widely seen as one of the best ways to boost jobs across the UK while cutting emissions.

But they warned that levels of funding were well below what was needed to address the climate and nature crises, and that the “jury is still very much out” on how green the Government’s recovery will be.

In his summer economic statement, the Chancellor confirmed plans for a £2 billion green homes grant in September to provide vouchers for homeowners and landlords to cover at least two-thirds of the costs of insulation and other energy efficiency measures, up to £5,000.

Some of the lowest income households will get the full costs of energy efficiency refits paid up to £10,000.

The funding also includes £1 billion to improve the energy efficiency and low carbon heating for schools, hospitals, prisons, military bases and other public buildings and £50 million to pilot ways to cut carbon from social housing.

Mr Sunak said the measures would make 650,000 homes more energy efficient, save households up to £300 on their annual bills, cut carbon emissions by 500,000 tonnes and support 140,000 jobs.

Though it was welcomed as a “strong start” by Greenpeace, the environmental group warned much more funding and investment would be needed in homes, alongside areas such as clean transport and the power sector.

Rosie Rogers, from Greenpeace UK, whose activists changed the road signs at Parliament Square so they read “Green Recovery” in every direction, said: “All roads must now lead to a green recovery – there is no alternative option.”

She urged: “An initial £15 billion cash injection in green ‘shovel ready’ projects would create hundreds of thousands of new jobs, almost immediately, right across the country, while making transport greener, homes warmer, energy bills lower and restoring nature.”

Chris Venables, head of politics at Green Alliance, said: “Today’s speech could mark a really positive first step on the green recovery, but only if this ambition is continued throughout the rest of the year, and particularly in the autumn budget.

“We urgently need to see a clear funding strategy for supporting public transport in its time of crisis, a long-term strategy to ensure all buildings are warm and cheap to run, reversing the catastrophic declines in nature, and investing in the technology of the future.

“The jury is still very much out on how green the UK Government’s recovery will be, and we’ll be watching over the coming weeks and months.”

There have been widespread calls for a green recovery, including calls for the Government to deliver on its £9.2 billion manifesto pledge for energy efficiency and investment in schemes to help nature recover, and make sure business bailouts have “green strings” attached.