CHANGES to a scheme to help households cut energy use will cost Glasgow £15million, the Chancellor has been warned.

Gordon Matheson, leader of Glasgow City Council, has written to George Osborne to tell him the changes will cost 100 jobs in the city and leave thousands of homes unable to qualify for help with insulation work.

The Energy Company Obligation (ECO)scheme sees power firms provide cash to consumers for energy saving measures, alongside the Green Deal programme.

However, in a bid to lower power bills, the UK Government wants to cut the contribution energy firms make to the scheme.

Mr Matheson said such a move will cost jobs and hit thousands of households in Glasgow, leaving homes less energy efficient.

He said redundancy notices have already been issued to some staff involved in insu1ation work.

The council estimates that ECO funding to the city will be reduced by at least £15.8m, resulting in 4250 fewer properties qualifying for external wall insulation.

In a letter to Mr Osborne, he said: "Glasgow has lost out on significant funding for energy efficiency; jobs are under threat; and homes will be left with higher fuel bills if work is not carried out.

"My assumption is that other local authorities and social housing providers will be encountering similar difficulties.

"I fully accept that these consequences may be unintended. Nevertheless, they are consequences which will have a negative impact. They therefore cannot be ignored and require to be addressed.

"I therefore urge you either to find a means of continuing with funding for solid wall insulation or at the least to put in place transitional funding arrangements to allow planned energy efficiency work over the rest of this year to be progressed and jobs to be secured for the time being."

In his Autumn Statement Mr Osborne announced a reduction in the cost of ECO.

The Chancellor said this will result in £30-£35 off bills, on average, this year.

While the changes mean some homes losing out, the Government said the existing dedicated support for low income and vulnerable households will be maintained and extended from March 2015 until March 2017.

People moving home can also receive £1000 towards energy saving measures.