Recommendations & Conclusions
29 items
2
Conclusion
Twenty-Seventh Report - Green Homes Gra…
Despite clear warning signs, the Department proceeded with an unrealistic implementation timescale for the Green Homes Grant Voucher Scheme. The Department had twelve weeks to set up the Scheme from announcement to launch. It was confident this was possible based on previous schemes, and felt the pace was necessary due …
Government response. 2022. It should report against these metrics annually to enable Parliament and the public to determine what progress it is making towards meeting the objectives set out in the Government’s 25 Year Environment Plan. 2.1 The government agrees with the …
HM Treasury
3
Recommendation
Twenty-Seventh Report - Green Homes Gra…
The Scheme’s design was overly complex and did not sufficiently address the needs of consumers and installers. The Department acknowledges that consumers and installers faced a poor customer experience when using the Scheme. There were delays to applications being processed, and by August 2021, 52% of voucher applications were eventually …
Government response. 4. PAC conclusion: Skills shortages in the civil service could compromise departments’ ability to achieve efficiency savings.
HM Treasury
4
Conclusion
Twenty-Seventh Report - Green Homes Gra…
The creation of jobs was a priority for the Scheme, but the Department failed to maximise its impact on employment. The Scheme’s objectives of creating jobs and reducing carbon emissions were at times conflicting. The Department chose to prioritise measures under the Scheme which promised higher carbon savings. However, this …
Government response. 5. PAC conclusion: Departments often struggle to track benefits as closely as they track costs
HM Treasury
5
Recommendation
Twenty-Seventh Report - Green Homes Gra…
The Department appointed a contractor without properly understanding whether it could deliver. The Department undertook a rapid procurement for a grant administrator, who would develop a digital voucher application system for the Scheme. None of the bidders for the contract thought it was possible to fully implement a digital system …
Government response. 6. PAC conclusion: Government efficiency drives tend to be one-off events rather than being embedded as a continuous priority.
HM Treasury
6
Recommendation
Twenty-Seventh Report - Green Homes Gra…
The Department has persistently failed to learn lessons from previous energy efficiency schemes. The Committee has seen a number of domestic energy efficiency schemes which have failed to achieve their ambitions, including the Green Deal and the Renewable Heat Incentive. These both featured poor uptake by consumers due to their …
Government response. 1. PAC conclusion: The pandemic has demonstrated the importance of departments retaining sufficient capacity to respond to emergencies when identifying potential efficiencies.
HM Treasury
1
Conclusion
Twenty-Seventh Report - Green Homes Gra…
On the basis of a report by the Comptroller and Auditor General, we took evidence from the Department of Business, Energy and Industrial Strategy (the Department) about the Green Homes Grant Voucher Scheme. The government aims to achieve net zero carbon emissions by 2050. Buildings account for around 19% of …
Government response. 2. PAC conclusion: Past experience shows that attempts to improve efficiency can inadvertently reduce the quality of services or increase costs elsewhere – what this Committee has called cost shunting.
HM Treasury
7
Conclusion
Twenty-Seventh Report - Green Homes Gra…
These issues were further exacerbated by underperformance of the Scheme Administrator (ICF Consulting Services Ltd, a contractor appointed by the Department), creating delays in applications being processed and vouchers issued to homeowners, as well as in making payments to installers, leaving them without payment for completed work for significant periods …
Government response. 3.2 The department recognises the impact that the shortened timescale had on officials’ ability to meaningfully engage with consumers and installers, and that the scheme administrator’s digital delivery complicated these processes. 3.3 The pace of the GHGv scheme delivery led …
HM Treasury
8
Conclusion
Twenty-Seventh Report - Green Homes Gra…
Despite spending a fraction of what was intended on vouchers, the Department expects it will incur costs of £50.5 million in administering the Scheme, equating to about £1,000 for every home it will upgrade.19 The Department stated that this was a result of having to address the failings of the …
Government response. 3.7 The department determines whether planned large investments are supported by a sound, good quality business cases, are deliverable and offer value for money through the Projects and Investment Committee (PIC). The PIC acts as a formal, internal gateway, which …
HM Treasury
9
Conclusion
Twenty-Seventh Report - Green Homes Gra…
The Scheme encouraged the installation of primary measures which would produce the greatest carbon savings, and which homeowners would be less likely to install without the support of a grant. However, over the short six-month duration of the Scheme, this created a tension with its objective to create jobs.23 This …
Government response. 4.1 The government agrees with the Committee’s recommendation. Target implementation date: Winter 2023 4.2 The government is engaging closely with potential suppliers, both directly and through the BEIS-led Electrification of Heat Task Group. The government is also working closely with …
HM Treasury
10
Conclusion
Twenty-Seventh Report - Green Homes Gra…
Industry associations stated that the short lead up time, and the Scheme’s six-month window was a challenge for many installers, providing a very short timeframe for them to identify the resources they needed to engage with the scheme, as well as for the installation of measures.26 The Department acknowledged that …
Government response. 3.2 The department recognises the impact that the shortened timescale had on officials’ ability to meaningfully engage with consumers and installers, and that the scheme administrator’s digital delivery complicated these processes. 3.3 The pace of the GHGv scheme delivery led …
HM Treasury
11
Conclusion
Twenty-Seventh Report - Green Homes Gra…
Requiring PAS and MCS certification, alongside Trustmark registration, was intended to protect homeowners from poor quality workmanship and fraud.29 However, gaining these certifications requires investment and time, which many installers were unwilling to do for only a 6-month scheme.30 At the Scheme’s launch, there were 880 potential installers registered with …
Government response. 3.2 The department recognises the impact that the shortened timescale had on officials’ ability to meaningfully engage with consumers and installers, and that the scheme administrator’s digital delivery complicated these processes. 3.3 The pace of the GHGv scheme delivery led …
HM Treasury
12
Conclusion
Twenty-Seventh Report - Green Homes Gra…
Whilst the Department extended the scheme’s duration by 12 months in November 2020, it later let these businesses down when on 27 March 2021 it suddenly announced the Scheme would close at the end of 31 March 2021.35 This abrupt cancellation itself had negative impacts on the companies who invested …
Government response. 3.2 The department recognises the impact that the shortened timescale had on officials’ ability to meaningfully engage with consumers and installers, and that the scheme administrator’s digital delivery complicated these processes. 3.3 The pace of the GHGv scheme delivery led …
HM Treasury
13
Conclusion
Twenty-Seventh Report - Green Homes Gra…
The Department acknowledged that the impact on many installers was less than ideal, however, it stated that the alternative was to continue running an unacceptable standard of service.37 It also argued that installers would be able to access the other building decarbonisation schemes it had launched in July 2020, such …
Government response. 3.2 The department recognises the impact that the shortened timescale had on officials’ ability to meaningfully engage with consumers and installers, and that the scheme administrator’s digital delivery complicated these processes. 3.3 The pace of the GHGv scheme delivery led …
HM Treasury
14
Conclusion
Twenty-Seventh Report - Green Homes Gra…
These factors point to the Scheme’s underperformance on jobs; the Department initially anticipated the scheme would support up to 82,500 jobs over 6 months, however, it now forecasts that it will support only 5,600 jobs over 12 months.40 The Department’s estimates are based on economic modelling that calculates the likely …
Government response. 4.1 The government agrees with the Committee’s recommendation. Target implementation date: Winter 2023 4.2 The government is engaging closely with potential suppliers, both directly and through the BEIS-led Electrification of Heat Task Group. The government is also working closely with …
HM Treasury
15
Conclusion
Twenty-Seventh Report - Green Homes Gra…
Considering these difficulties, it comes as no surprise that industry criticised the design of the Scheme, and recommended greater consultation for future ones.41 The Department stated that whilst it did engage with industry before the Scheme’s launch, it was limited in what it was able to do until the formal …
Government response. 3.2 The department recognises the impact that the shortened timescale had on officials’ ability to meaningfully engage with consumers and installers, and that the scheme administrator’s digital delivery complicated these processes. 3.3 The pace of the GHGv scheme delivery led …
HM Treasury
16
Conclusion
Twenty-Seventh Report - Green Homes Gra…
In our recent evidence session on Achieving Net Zero Strategy, the Department set out its intention to introduce a Boiler Upgrade Scheme to support the transition of heating from gas boilers to heat pumps, which it hopes will support jobs and develop the heat pump supply chain. The Department told …
Government response. 4.1 The government agrees with the Committee’s recommendation. Target implementation date: Winter 2023 4.2 The government is engaging closely with potential suppliers, both directly and through the BEIS-led Electrification of Heat Task Group. The government is also working closely with …
HM Treasury
17
Conclusion
Twenty-Seventh Report - Green Homes Gra…
In 2016 our predecessors on the Committee identified similar problems when they examined the Green Deal; in that case the former Department for Energy and Climate did not undertake enough work to understand consumer needs, and how to make it easier for them to apply. This resulted in an overly …
Government response. 6.1 The government agrees with the Committee’s recommendation. Recommendation implemented 6.2 The pace of delivery and magnitude of investment meant that GHGv was a challenging scheme to deliver from the outset, the scale of which was amplified by the COVID-19 …
HM Treasury
18
Conclusion
Twenty-Seventh Report - Green Homes Gra…
The Department argued that it had learned lessons from previous schemes.50 The design of the Scheme was based on the Green Deal Home Improvement Fund – itself a voucher scheme launched in 2014 which saw rapid uptake by consumers, and which had also encouraged certain energy efficiency measures over others …
Government response. 6.1 The government agrees with the Committee’s recommendation. Recommendation implemented 6.2 The pace of delivery and magnitude of investment meant that GHGv was a challenging scheme to deliver from the outset, the scale of which was amplified by the COVID-19 …
HM Treasury
19
Conclusion
Twenty-Seventh Report - Green Homes Gra…
We are likewise concerned that the Department will fail to learn from this scheme. When asked what the primary failings of the Scheme were, whilst acknowledging the short duration and the design of the scheme as factors, the Department largely attributed its failings to the poor performance of its scheme …
Government response. 6.1 The government agrees with the Committee’s recommendation. Recommendation implemented 6.2 The pace of delivery and magnitude of investment meant that GHGv was a challenging scheme to deliver from the outset, the scale of which was amplified by the COVID-19 …
HM Treasury
20
Conclusion
Twenty-Seventh Report - Green Homes Gra…
The Department’s previous energy efficiency schemes for private housing have operated in different ways, and for varying timescales, and this fragmented, stop-go activity has hindered long term stable progress towards Government’s energy efficiency ambitions. In evidence to us industry associations argued the case for a stable, long-term plan for decarbonising …
Government response. 6.1 The government agrees with the Committee’s recommendation. Recommendation implemented 6.2 The pace of delivery and magnitude of investment meant that GHGv was a challenging scheme to deliver from the outset, the scale of which was amplified by the COVID-19 …
HM Treasury
21
Conclusion
Twenty-Seventh Report - Green Homes Gra…
The Chancellor announced the Green Homes Grant Voucher Scheme (the Scheme) on the 8 July 2020, with the expectation that it would launch on 30 September 2020. This allowed just 12 weeks to get the scheme up and running. During this time, the Department had to consult with stakeholders, design …
Government response. 3.2 The department recognises the impact that the shortened timescale had on officials’ ability to meaningfully engage with consumers and installers, and that the scheme administrator’s digital delivery complicated these processes. 3.3 The pace of the GHGv scheme delivery led …
HM Treasury
22
Conclusion
Twenty-Seventh Report - Green Homes Gra…
The Department told us that it had a high-risk appetite in getting the scheme up and running due to the ongoing effects of the pandemic, and the short 12-week timescale was necessary to boost jobs as 60% of the construction industry were on the furlough scheme which was due to …
Government response. 3.2 The department recognises the impact that the shortened timescale had on officials’ ability to meaningfully engage with consumers and installers, and that the scheme administrator’s digital delivery complicated these processes. 3.3 The pace of the GHGv scheme delivery led …
HM Treasury
23
Conclusion
Twenty-Seventh Report - Green Homes Gra…
This rushed timescale meant that the Department undertook limited stakeholder engagement and restricted its options for procuring an administrator.64 The Department also did not pilot the scheme to test its feasibility.65 These issues led to many of the problems described in Part One including the lack of understanding installer needs, …
Government response. 3.2 The department recognises the impact that the shortened timescale had on officials’ ability to meaningfully engage with consumers and installers, and that the scheme administrator’s digital delivery complicated these processes. 3.3 The pace of the GHGv scheme delivery led …
HM Treasury
24
Conclusion
Twenty-Seventh Report - Green Homes Gra…
In a previous Committee report Home Energy Efficiency Measures, our predecessors highlighted that Government “should be prepared to pull back on plans if it is clear they are unlikely to be successful and risk taxpayers’ money”.69 Given the risk to the Department’s reputation, we questioned why the Accounting Officer chose …
Government response. 2.2 As part of the governance approvals for investments, the Accounting Officer assesses whether a ministerial direction is required. Having assessed the risks associated with the Green Homes Grant Voucher (GHGv) scheme’s implementation timescale, the Accounting Officer gained assurance from …
HM Treasury
25
Conclusion
Twenty-Seventh Report - Green Homes Gra…
Under Managing Public Money principles, Accounting Officers should consider the regularity, propriety, and feasibility of initiatives, as well as their potential value for money. In terms of feasibility, Accounting Officers should seek a direction “where there is a significant doubt about whether the proposal can be implemented accurately, sustainably, or …
Government response. 2.2 As part of the governance approvals for investments, the Accounting Officer assesses whether a ministerial direction is required. Having assessed the risks associated with the Green Homes Grant Voucher (GHGv) scheme’s implementation timescale, the Accounting Officer gained assurance from …
HM Treasury
26
Conclusion
Twenty-Seventh Report - Green Homes Gra…
Due to the 12-week timescale for implementing the Scheme, the Department had limited time to procure a Scheme Administrator who would develop a digital voucher application system and process applications. The Department received three bids, but none of the bidders thought it was possible to fully implement a digital system …
Government response. 5.1 The government agrees with the Committee’s recommendation. Recommendation implemented 5.2 The department carries out due diligence checks at all stages of a procurement and considers in-house solutions and delivery through public sector bodies, as recommended elsewhere in this document. …
HM Treasury
27
Conclusion
Twenty-Seventh Report - Green Homes Gra…
As a result, the Department awarded the contract to ICF, accepting it’s accelerated timetable for completion, whilst also putting in place a manual processing facility as a contingency in case the timetable overran.74 ICF subsequently struggled to implement the required voucher application system, meaning that greater amounts of manual processing …
Government response. 5.1 The government agrees with the Committee’s recommendation. Recommendation implemented 5.2 The department carries out due diligence checks at all stages of a procurement and considers in-house solutions and delivery through public sector bodies, as recommended elsewhere in this document. …
HM Treasury
28
Conclusion
Twenty-Seventh Report - Green Homes Gra…
Despite the Department appointing a contractor which could not deliver the system, the Department felt its procurement process was run successfully overall.76 In response to ICF’s proposed costs being far below the other two bidders, the Cabinet Office undertook a low-cost review of the scheme administrator’s bid during the procurement. …
Government response. 5.1 The government agrees with the Committee’s recommendation. Recommendation implemented 5.2 The department carries out due diligence checks at all stages of a procurement and considers in-house solutions and delivery through public sector bodies, as recommended elsewhere in this document. …
HM Treasury
29
Conclusion
Twenty-Seventh Report - Green Homes Gra…
The Department stated that at the time of the procurement, it appeared that ICF had a ready-made system that had already been used on over 100 grant schemes in the US and Canada, and which could quickly and cheaply be amended to suit the Department’s needs.79 The Department did not …
Government response. 5.1 The government agrees with the Committee’s recommendation. Recommendation implemented 5.2 The department carries out due diligence checks at all stages of a procurement and considers in-house solutions and delivery through public sector bodies, as recommended elsewhere in this document. …
HM Treasury