Summary
This report addresses the smart metering programme—the first inquiry from our ‘Evidence Check’ initiative. Evidence check is a novel way of working for select committees. We asked the Government for statements on the evidence behind a range of different policies and developing areas. We were disappointed to find that the Government was unable to provide statements in some areas, and that there were delays in receiving some responses to our requests. The variation in the quality of statements suggests that some departments are unfamiliar with communicating the evidence base behind their policies, and the Government will need to reflect on its ability to respond to such an exercise in future.
Our inquiry on the smart metering of electricity and gas used the Government’s evidence check statement as its starting point. The statement was weak in some respects, which led us to explore a range of smart metering issues. We found that the Government’s ongoing impact assessments for the rollout were making good use of evidence to inform its work in this area, and that attention was being paid to the significance of behavioural science evidence. We are concerned, however, that the level of work invested in the impact assessments was not apparent in the Government’s initial statement, and that this might mean that the impact assessments are not as embedded in the policy development process as they should be.
We also found that there is a lack of clarity about the primary purpose of smart metering. The rollout could have a diverse range of benefits, but we fear that with a disparate set of 11 objectives the success of the project may be difficult to ascertain. In particular, there is a risk that the project will become viewed solely as an inefficient way of helping consumers to make small savings on their energy bills. The national benefits of smart metering—in terms of optimising electricity generation and storage, and paving the way for a smart energy system—are important, and the Government will need to communicate this alongside emphasising savings for individual customers.
The rollout of smart meters includes an ‘in-home display’ as a means of providing consumers with feedback on their energy usage. This element is expected to lead to consumer savings, but the technology alone will not have an impact unless accompanied by a programme of user engagement before, during and after installation. It is important that the Government and suppliers do not compromise on this purely in order to make up for the ongoing delay of the mass rollout.
We sought to avoid duplicating the work of other committees, as we have focused on the quality and completeness of the evidence base for the policy. We have nevertheless highlighted concerns about a number of aspects of smart metering. Our interaction with GCHQ gives us confidence that security—one of these concerns—is being taken seriously. It is important that consumers have confidence in this system, and the way that the Government communicates on this point requires further reflection. The interoperability of foundation stage smart meters when the customer changes supplier—another highlighted concern—remains unresolved, despite having been raised by other committees in the past.
We intend to continue to monitor the implementation of the smart metering programme, and to test its adherence to Evidence Check best practice.
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16 September 2016