Consumer-funded energy policies Contents

Summary

Government’s management of the Levy Control Framework (the Framework) has suffered from a lack of transparency, rigour and accountability. Forecasting of Framework costs has been poor, and the Department (formerly the Department of Energy & Climate Change, now the Department for Business, Energy & Industrial Strategy) continues to expect to overspend the Framework budget. As a result these costs are likely to add around £110 to the typical household’s yearly energy bill in 2020, £17 more than budgeted for.1 We are concerned that the problems with forecasting reflect a culture of optimism bias in the Department. We reported earlier this year that the Department’s forecast of demand for Green Deal loans had been “so wildly optimistic it gave a completely misleading picture of the scheme’s prospects to Parliament and other stakeholders”.2 The Department must now foster a culture of openness and transparency around its consumer funded energy policies and together with HM Treasury, it must do more to demonstrate that these schemes are providing value for money for consumers.


1 All figures in this report are in 2011–12 prices as that is the basis on which the Framework budget is set.

2 Committee of Public Accounts, Household energy efficiency measures, Eleventh Report of Session 2016–17, HC 125, 20 July 2016, Conclusions and recommendations, para 2




6 February 2017