The design and implementation of the government’s Green Deal and Energy Company Obligation put public money at risk and led to minimal CO2 savings, the Public Accounts Committee said today in a new report.
In its new report, the committee concludes take up for the government’s Green Deal loans scheme was “woefully low” because the scheme was not adequately tested. The forecast of demand for Green Deal loans in the 2012 impact assessment was “excessively optimistic”, said the committee, and “gave a completely misleading picture of the scheme’s prospects to Parliament and other stakeholders”.
It raised concerns that while taxpayers provided £25 million – more than a third of the initial investment in the Green Deal Finance Company – to cover set-up and operational costs, the Department of Energy and Climate Change (Decc) had no formal role in approving company expenditure or ensuring it achieved value for money.
The committee also found that the government lacked the information it needs to measure progress against the objectives of the complementary Energy Company Obligation (ECO) scheme, including its impact on fuel poverty.
Meg Hillier, chair of the PAC, said today: “The government rushed into the Green Deal without proper consideration of concerns about its weaknesses. Not enough work went into establishing the scheme’s appeal to households, nor to its implementation, nor to examining the experience of governments setting up similar schemes overseas. This blinkered approach resulted in a truly dismal take-up for Green Deal loans and a cost to taxpayers of £17,000 for every loan arranged. Savings in CO2 were minimal.
“Accountability to government of the Green Deal Loan Company – which spent public money on the expectation that it would need to support 3.5 million loans, compared to the 14,000 taken up – was institutionally weak. The government is also unable to measure adequately the success of the Energy Company Obligation. There is no doubt householders and taxpayers in general have been ill-served by these schemes and the Government must learn from its mistakes to ensure they are not repeated in this or indeed any other policy areas.”
Caroline Flint, a member of the Committee who led questioning during its inquiry, said: “It is clearly desirable to make homes more energy-efficient but the Green Deal in particular was not fit for purpose. It is deeply alarming that the expectations for take-up put forward by the government should be so wide of the mark, especially given the serious concerns raised about the scheme’s design and implementation. This, together with its inability to properly evaluate the Energy Company Obligation, paints the picture of a government hell-bent on implementing a policy regardless of whether it represented value for taxpayers’ money.”
It is not the first time the Green Deal scheme has come under criticism from a parliamentary body. In April, the National Audit Office concluded it had increased costs for energy companies and customers “without any meaningful benefit”.
Read the full report: Household energy efficiency measures
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Green Deal “increased costs without any meaningful benefit”, according to National Audit Office
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