Recommendations & Conclusions
29 items
2
Recommendation
Twenty-Seventh Report - Green Homes Gra…
Acknowledged
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 …
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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 to the need to boost jobs at a time of economic risk and to start installations before winter. However, this limited timeframe put immense constraints on design, consultation and procurement, at a time when the Department’s own delivery capacity in terms of personnel and skills was under strain as it responded to the impact of Covid-19, for example supporting vaccine procurement, the various business loan schemes, as well as its other building decarbonisation schemes. This Committee has previously highlighted that Government should be willing to halt schemes when they are not ready for implementation. However, here the Department 6 Green Homes Grant Voucher Scheme proceeded despite its own assessment, and that of the Infrastructure and Projects Authority, that the Scheme was high risk, and after its Projects and Investment Committee rejected the Scheme’s Full Business Case just prior to launch. The Accounting Officer’s decision to proceed was partly due to reasoning the Scheme would likely achieve value for money even if it did not spend its full budget. We question whether this justification was sufficient, given Managing Public Money principles require consideration of a programme’s feasibility, as well as its potential value for money. Recommendation: The Department should: • set out how it will improve its approach to testing and assuring the readiness of new programmes; and • where the Department is unable to take these actions, consider requesting a Ministerial Direction, bearing in mind its obligations under Managing Public Money to have regard for the feasibility of what is being proposed.
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Government response AI summary
The government states it agrees with the recommendation and will ensure clear metrics for reform programmes, publishing regular updates on their operational effectiveness, but it doesn't detail improvements to readiness testing or address the request to consider Ministerial Directions.
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HM Treasury
3
Recommendation
Twenty-Seventh Report - Green Homes Gra…
Not Addressed
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 …
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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 rejected or withdrawn, while 46% of installer applications failed. These high attrition rates were substantially the result of the Scheme’s complex design, with applications having to meet complicated requirements to be approved. Homeowners also struggled to find registered installers as many installers were unwilling to gain the necessary certification for a scheme lasting only six months. The Department should have consulted more deeply to understand the challenges that consumers and industry would face, and how it might address barriers to participation. The final administration costs are expected to be just over £50 million, 16% of the total Scheme spend, amounting to more than £1,000 per home upgraded. The Department states that these high costs were due to the need to account for the failings of the Scheme administrator, even though this figure includes a reduction of the contractor’s fee for their poor performance. A scheme of less complexity would have had administration costs more proportionate to the number of successful voucher applications. Recommendation: The Department should set out what steps it is taking to: • secure meaningful engagement with potential consumers in the design of new programmes and minimise the risk that the scheme design proves to be unworkable; • ensure that the costs of administration are proportionate to the delivery of outcomes and the amount of public money at stake.
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Government response AI summary
The government's response addresses civil service skills shortages and efficiency savings, but does not provide details on steps taken to secure meaningful consumer engagement or ensure proportionate administration costs in new programmes, as recommended.
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HM Treasury
4
Recommendation
Twenty-Seventh Report - Green Homes Gra…
Not Addressed
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 …
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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 limited the number of jobs that could be created, as often energy Green Homes Grant Voucher Scheme 7 efficiency measures which required skills that were quicker for installers to recruit and train, or where there were larger supply chains, were not as accessible under the Scheme. Heat Pump installations, for example, were encouraged under the six- month Scheme but it can take much longer than that just to learn how to install them. The Department originally envisaged that the Scheme would support up to 82,500 jobs over 6 months, but its modelling now indicates that the Scheme will have supported 5,600 jobs over 12 months. We are sceptical whether these modelled figures are accurate, as they are not based on concrete evidence of the actual number of jobs supported, and also do not take into account the negative effects reported by installers from the Scheme’s sudden closure. The Department is confident that installers were able to find work through its other energy efficiency schemes once the Scheme closed, however evidence submitted by industry indicates that these schemes were often not accessible to smaller installation companies, and some firms had to make staff redundant as a result of the Scheme’s difficulties and its abrupt closure. Recommendations: In planning and implementing the new Boiler Upgrade Scheme, the Department should engage closely with potential suppliers to properly understand the challenges they may face to scale up, including training sufficient numbers of appropriately skilled workers, and ensure the availability of suppliers across the country. If the Department sets an objective to create jobs it should put in place rob
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Government response AI summary
The government's response quotes a general PAC conclusion about tracking benefits and costs, completely failing to address the specific recommendation for the Department to engage with suppliers and address scaling challenges for the new Boiler Upgrade Scheme.
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HM Treasury
5
Recommendation
Twenty-Seventh Report - Green Homes Gra…
Not Addressed
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 …
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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 in time for the launch, and so the Department launched a complex scheme without an IT platform that had been fully developed and tested. The Department’s chosen grant administrator, ICF Consulting Services Ltd (ICF), subsequently struggled to implement the voucher application system, leading to greater amounts of manual processing being needed for applications, contributing to the delays in processing vouchers. The Department felt its procurement process was run successfully overall, despite appointing a contractor which could not deliver the system it wanted. Whereas other bidders thought fully implementing a system would take at least 15 weeks, ICF thought it could do it in six and a half weeks. It was unclear why the Department did not challenge ICF further as to why it felt it could deliver substantially faster than the other bidders. The Department recognised it should have had a better technical understanding of ICF’s proposed digital solution, which could have prevented some of the issues experienced subsequently. This was despite a specialist Cabinet Office review of the low-cost bid recommending the Department obtain a more detailed understanding of the proposed solution, which the Department did not do. 8 Green Homes Grant Voucher Scheme Recommendation: In its Treasury Minute response, the Department should set out how it will improve the technical scrutiny of bids during its procurements, to better assure the capability of suppliers and the practical feasibility of their proposals, particularly where a bidder is promising considerably more than others.
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Government response AI summary
The government's response cites a general PAC conclusion about government efficiency drives, failing to address the specific recommendation for the Department to outline how it will improve technical scrutiny of bids during procurements.
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HM Treasury
6
Recommendation
Twenty-Seventh Report - Green Homes Gra…
Not Addressed
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 …
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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 complex scheme design, and the Green Deal scheme also carried a disproportionately high administrative cost per home upgraded. The Department stated that the design of the Green Homes Grant Voucher Scheme did reflect lessons from previous schemes, particularly in its attempt to ensure value for money in delivering carbon impacts whilst minimising poor quality workmanship and fraud. Nonetheless, we are concerned that despite the Department retaining personnel with experience of previous initiatives, the Green Homes Grant Voucher Scheme suffered from many of the same issues that we have seen before. This calls into question how the Department maintains and uses its corporate memory, and whether it is truly learning lessons from the delivery of these schemes. Recommendation: The Department should set out in its Treasury Minute response how it is embedding lessons learned from this scheme and previous schemes, and how it will ensure these are applied to future energy efficiency initiatives. Green Homes Grant Voucher Scheme 9 1 Scheme design and performance
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Government response AI summary
The government's response refers to a general PAC conclusion about civil service capacity during emergencies and does not address the specific recommendation on embedding lessons learned from energy efficiency schemes.
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HM Treasury
1
Conclusion
Twenty-Seventh Report - Green Homes Gra…
Not Addressed
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 …
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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 all UK greenhouse gas emissions.1 To reduce emissions from homes the government wants consumers to use less energy, make greater use of green heating systems (alternatives to gas and fossil fuels) and for home heating to be more efficient. The Department has overall responsibility across government for achieving net zero, and it and its predecessor, the Department for Energy and Climate Change, have been responsible for a number of home energy efficiency schemes, such as the Green Deal, the Energy Company Obligation, the Renewable Heat Incentive and the Warm Front Scheme. These schemes have addressed different groups of energy consumers, over different periods of time.2
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Government response AI summary
The government's response references a general PAC conclusion about 'cost shunting,' which does not address the committee's specific background information and context provided in conclusion #1 regarding the Green Homes Grant Voucher Scheme.
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HM Treasury
7
Conclusion
Twenty-Seventh Report - Green Homes Gra…
Acknowledged
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 …
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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 of time.16 The Department argued that this was the primary reason for the scheme’s poor performance, and that it had seen a lot of demand at the start of the scheme before these customer service issues arose.17 It also stated that some of the application complexity arose from the failure of the Scheme Administrator to implement a digital voucher application system, meaning that customers had to be asked for documentation for checks instead of these being automated.18
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Government response AI summary
The government recognises the impact of the shortened timescale and acknowledges that the scheme administrator's digital delivery complicated processes and contributed to a complex user experience. It states that scheme design elements were informed by previous learnings and focused on quality assurance.
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HM Treasury
8
Conclusion
Twenty-Seventh Report - Green Homes Gra…
Accepted
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 …
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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 Scheme Administrator, and that these costs should instead be compared to the 169,000 voucher applications as the Department incurred costs on each of these due to the administrator’s failure to automate processing. This is 9 C&AG’s report para 8, Qq 29, 33 10 C&AG’s report, Figure 5 11 C&AG’s report, paras 8 and 2.11 12 Q64 13 Q88 14 Q64 15 MCS Certified and MCS Foundation, page 4 16 Q52, MCS Certified and MCS Foundation page 6 17 Qq 29, 41 18 Q63 19 Q147 Green Homes Grant Voucher Scheme 11 despite also stating that it had secured a reduction in the Scheme administrator’s fee due to their underperformance.20 These costs would have been more proportionate had the Scheme not been so difficult for homeowners to engage with; the Scheme’s 52% attrition rate of failed applications compares unfavourably to the Department’s initial expected attrition rate of 40% based on previous schemes, which we note also faced problems due to over-complexity.21 Had the Department created a scheme that was more accessible, there would have been a greater number of homes upgraded for the resources committed.22 Impact on Industry
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Government response AI summary
The government describes its existing Projects and Investment Committee (PIC) process for assessing large investments and ensuring value for money, implying current mechanisms address such issues, rather than directly acknowledging the committee's findings on the specific cost inefficiencies of the Green Homes Grant Voucher Scheme.
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HM Treasury
9
Conclusion
Twenty-Seventh Report - Green Homes Gra…
Accepted
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 …
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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 short duration was to encourage homeowners to take advantage of the scheme quickly, however, primary measures often required specialist skills that were difficult to recruit or train or were in supply chains which were not as able to scale up to meet increased demand.24 For example, whilst heat pumps were one of the measures encouraged by the Scheme, it can take as long as 48 months to learn how to install one.25
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Government response AI summary
The government agrees with the committee's findings and is engaging with suppliers and industry to ensure high-quality heat pump training is available, aiming to create jobs through the Boiler Upgrade Scheme and the new Green Jobs Delivery Group.
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HM Treasury
10
Conclusion
Twenty-Seventh Report - Green Homes Gra…
Acknowledged
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 …
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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 delivering the intended £1.5 billion of funding was extremely ambitious, and that it could have driven greater job creation by broadening the constraints on measures, however, it wanted to ensure that the scheme was not poor value for money in delivering carbon impacts.27 It also argued that many of the primary measures were labour intensive and stimulating demand for them would also have an impact in supporting jobs, and that where specialist skills were needed firms could hire new staff to work alongside those who were more experienced.28
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Government response AI summary
The government recognises the impact of the shortened timescale and digital delivery on installer engagement, stating that policy implementation will be improved through robust public consultation and by sharing lessons learned for future schemes.
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HM Treasury
11
Conclusion
Twenty-Seventh Report - Green Homes Gra…
Acknowledged
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 …
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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 Trustmark, however, by November 2020 only 248 had registered to participate in the Scheme, eventually growing to 1,008 by August 2021.31 Many homeowners struggled to find installers who were willing to participate in the Scheme, and the Department acknowledged that in many areas there were not enough 20 Qq136, 138–142, 154–155, Note dated 1 October 2021 from Department for Business Energy and Industrial Strategy section 2–4 21 Qq 91, 99 22 Q103 23 Qq 39–40 24 C&AG’s report, paras 10–11 25 Q35 26 The Mineral Wool Insulation Manufacturers Association, page 2, MCS Certified and MCS Foundation, page 4–5 27 Qq 40, 42, 64 28 Qq 35, 41 29 Q60, 63 30 Q85 31 C&AG’s Report, paras 8, 2.11 12 Green Homes Grant Voucher Scheme installers.32 Despite the challenges, some businesses did invest in order to participate; a survey by the Insulation Assurance Authority found that those who did invest spent an average of £87,000 getting set up for the scheme by gaining the necessary certifications, hiring staff, and promoting the scheme.33 Subsequent issues with the administration of the Scheme, however, such as the delays in issuing vouchers and making payments, meant that rather than expanding some firms reported having to lay off workers.34
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Government response AI summary
The government acknowledges the impact of shortened timescales and complex digital delivery on installer engagement. It reaffirms commitment to high quality standards based on the EHC review and states that lessons learned from the scheme will inform future policy development and implementation, including robust public …
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HM Treasury
12
Conclusion
Twenty-Seventh Report - Green Homes Gra…
Acknowledged
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 …
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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 in the scheme. For instance, the Federation of Master Builders reported loss of time and money, redundancies of staff hired to meet demand from the scheme, and reputational damage through being unable to service all their customers in the limited time available. It also stated that maintaining PAS certification requires continuous work, and thus the closure of the Scheme risked the loss of capacity in the industry.36
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Government response AI summary
The government recognises the negative impact of the shortened timescale and abrupt scheme closure on stakeholders, stating that policy implementation can be improved through robust public consultation and by sharing lessons learned for future schemes.
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HM Treasury
13
Conclusion
Twenty-Seventh Report - Green Homes Gra…
Acknowledged
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 …
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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 as the Local Authority Delivery element of the Green Homes Grant scheme and the Social Housing Decarbonisation Fund Demonstrator, which were delivered through local authorities as an intermediary.38 This contradicted evidence from industry, who stated that local authorities had tended to deal with just larger suppliers, and SMEs were either unable to engage with the schemes or would at least struggle to engage quickly.39
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Government response AI summary
The government acknowledges the impact of shortened timescales and states that policy implementation will be improved through robust public consultation and sharing lessons learned for future schemes, but does not directly address the contradiction regarding the viability of alternative schemes for SMEs.
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HM Treasury
14
Conclusion
Twenty-Seventh Report - Green Homes Gra…
Accepted
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 …
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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 number of jobs based on the amount spent, rather than on concrete evidence of the actual number of jobs supported, and would not take into account the negative effects that businesses reported from the Scheme’s difficulties and subsequent closure.
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Government response AI summary
The government agrees with the committee's observation regarding job performance and monitoring. It states the independent evaluation of the GHGv scheme is assessing its impact on jobs using qualitative and quantitative methods, and commits that future policies will adhere to monitoring and evaluation frameworks. From …
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HM Treasury
15
Recommendation
Twenty-Seventh Report - Green Homes Gra…
Accepted
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 …
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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 fiscal announcement was made on 8 July.42 After this point, the Department had limited time until the Scheme’s launch 32 Q86 33 Mineral Wool Insulation Manufacturers Association, page 1 34 Mineral Wool Insulation Manufacturers Association, page 2 35 Qq 69–70 36 Q69, Federation of Master Builders, page 2 37 Qq 65–69 38 Q66, Q69–70 39 Federation of Master Builders, page 2, E3G, page 4 40 C&AG’s report, para 7 41 Federation of Master Builders, page 1, Mineral Wool Insulation Manufacturers Association, page 1, Solar Energy UK, page 4, MCS Certified and MCS Foundation page 8 42 Q83 Green Homes Grant Voucher Scheme 13 at the end of September to fully engage with industry.43 However, it is unclear why the Department, which would presumably be in regular contact with industry anyway, was so lacking in an awareness of the complexities of the industry, and its actual capability to scale up over a short period.44 This is also despite previous recommendations from this Committee to ensure that policy decisions are thoroughly tested and based on accurate evidence that includes a robust evaluation of stakeholders’ views.45
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Government response AI summary
The government recognises the impact of shortened timescales on stakeholder engagement. It commits to improving future policy implementation by undertaking robust public consultation for each proposed development to gather views from stakeholders and seek feedback from consumers, and will share lessons learned from the GHGv …
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HM Treasury
16
Conclusion
Twenty-Seventh Report - Green Homes Gra…
Accepted
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 …
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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 us it has engaged with industry and understands that industry is confident it can scale up to meet the Department’s ambitions for heat pump installations as part of its longer-term Heat and Buildings Strategy.46 Learning Lessons for future delivery
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Government response AI summary
The government agrees with the committee's observation, stating the Boiler Upgrade Scheme (BUS) will be implemented by Winter 2023. It details ongoing engagement with suppliers, efforts to ensure heat pump training is available with industry capacity to upskill 7,000 installers annually, and expects the BUS …
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HM Treasury
17
Conclusion
Twenty-Seventh Report - Green Homes Gra…
Acknowledged
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 …
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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 complex scheme with many process steps and excessive paperwork, resulting in extremely low demand; only 14,000 households took out a loan, leading to a cost to taxpayers of £17,000 for every loan arranged.47 Similarly, in 2018 the Renewable Heat Incentive saw poor uptake; the Department expected to install 513,000 new heating systems as part of the scheme, but at the time anticipated it would install only 111,000. This was also due to a lack of preparation by the Department to understand what consumers wanted and the potential barriers to participation.48 The Warm Front Scheme featured a lack of clarity over whether it was primarily aimed at energy efficiency or alleviating fuel poverty.49
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Government response AI summary
The government agrees with the committee's implied recommendation to learn from past scheme failures, stating it is 'implemented'. The response details processes for extracting and sharing lessons learned from the GHGv scheme through independent evaluation, internal briefings, cross-Whitehall cascades, and a new programme to transform …
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HM Treasury
18
Conclusion
Twenty-Seventh Report - Green Homes Gra…
Accepted
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 …
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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 in a similar manner to the recent scheme.51 It also stated that the requirement for PAS and MCS certification and Trustmark registration were drawn from the Every Home Counts review, which set out recommendations for government in ensuring that homeowners were not at risk from poor quality work.52 Nonetheless, it is of concern that the Department did not fully 43 Qq 83–85 44 Q85 45 Q83, Committee of Public Accounts, Household energy efficiency measures, Eleventh Report of Session 2016–17, HC 125, July 2016 46 Committee of Public Accounts, Oral Evidence: Achieving Net Zero: Follow Up, HC 642, 25 October 2021, Qq 24, 27, 69 47 Committee of Public Accounts, Home Energy Efficiency Measures, Eleventh Report of Session 2016–17, HC 125, 11 July 2016 48 Committee of Public Accounts, Renewable Heat Incentive in Great Britain, Fortieth Report of Session 2017–19, HC 696, 16 May 2018 49 Committee of Public Accounts, The Warm Front Scheme, Thirty-Ninth Report of Session 2008–09, HC 350, 29 June 2009 50 Q63 51 Qq 31–32 52 Q94 14 Green Homes Grant Voucher Scheme learn from and overcome the issues of complexity and poor performance on the previous schemes.53 This is especially so given departmental staff with knowledge of these previous schemes were present during the development and implementation of the recent scheme, raising questions around how the Department maintains and uses its corporate memory.54
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Government response AI summary
The government agrees with the committee's findings, stating the recommendation is implemented, and has initiated multiple specific actions including a lessons learned repository, mandatory engagement with previous projects in business cases, and a new programme to transform delivery capability.
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HM Treasury
19
Recommendation
Twenty-Seventh Report - Green Homes Gra…
Accepted
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 …
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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 administrator.55 This contrasted with one of the Department’s ministers who, giving evidence at the Environmental Audit Committee, readily acknowledged the multiple causes of the Scheme’s difficulties set out the Comptroller and Auditor General’s report.56 The Department needs to recognise the breadth and scale of what went wrong on this scheme, so that it can begin to regain the confidence of homeowners and industry in future attempts to decarbonise buildings.
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Government response AI summary
The government agrees with the recommendation and states it is 'implemented,' committing to fully recognise and learn from the scheme's failures. It details steps including an independent evaluation due Autumn 2023, extensive sharing of lessons internally and across Whitehall, and a new programme to transform …
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HM Treasury
20
Recommendation
Twenty-Seventh Report - Green Homes Gra…
Acknowledged
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 …
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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 the UK’s domestic buildings.57 In our evidence session on Achieving Net Zero the Department referred to its new Heat and Buildings Strategy, alongside the Net Zero Strategy, which sets out its plans, including spending intentions, and the longer- term regulatory path for the building retrofit sector.58 The strategy is intended to provide a stable long-term policy landscape for consumers and industry to engage with.59 53 Q105 54 Q164–167 55 Qq 29, 52, 158 56 Environmental Audit Committee, Oral Evidence: Mapping the Path to Net Zero, HC 497, 22 September 2021, Qq 170, 189 57 MCS Certified and MCS Foundation, page 8–9, Federation of Master Builders, page 3–5, Mineral Wool Insulation Manufacturers Association, page 2–4 58 Committee of Public Accounts, Oral Evidence: Achieving Net Zero: Follow Up, HC 642, 25 October 2021, Qq 53, 55 59 Qq 74, 77, 93, 127 Green Homes Grant Voucher Scheme 15 2 Scheme Implementation Unrealistic implementation timescales
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Government response AI summary
The government agrees with the recommendation for a stable long-term plan, stating it is 'implemented' by the Heat and Buildings Strategy. The response outlines a commitment to applying lessons learned from the GHGv scheme through an independent evaluation, internal briefings, cross-Whitehall cascades, and a new …
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HM Treasury
21
Conclusion
Twenty-Seventh Report - Green Homes Gra…
Acknowledged
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 …
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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 the Scheme, and procure a scheme administrator to implement a digital system for voucher applications.60 This was at a time when the Department’s delivery capacity in terms of personnel and skills was already constrained in responding to the impact of Covid-19, for example with supporting vaccine procurement various business loan schemes, as well as its other building decarbonisation schemes.61
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Government response AI summary
The government recognises the impact of the shortened timescale and the scheme administrator's digital delivery complications. It commits to improving policy implementation through robust public consultation and sharing lessons learned from the GHGv scheme to inform future policy development.
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HM Treasury
22
Conclusion
Twenty-Seventh Report - Green Homes Gra…
Acknowledged
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 …
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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 end. It argued that if it had pushed the launch back to November or December then the Scheme would have started in winter, when it is less practical to install energy efficiency measures.62 Despite the short timescales, the Department was confident that it was still possible to implement the Scheme due to its experience of setting up other energy efficiency schemes with similar timescales, such as the Green Deal Home Improvement Fund.63
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Government response AI summary
The government acknowledges the negative impact of the shortened timescale for the scheme and states it aims to improve policy implementation through robust public consultation and by sharing lessons learned for future schemes.
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HM Treasury
23
Conclusion
Twenty-Seventh Report - Green Homes Gra…
Acknowledged
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, …
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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, the complexity of the scheme and the performance of the administrator. The Department pressed on with its unrealistic timetable despite warning signs during implementation.66 Both the Department’s own assessment, and that of the Infrastructure and Projects Authority, showed that the Scheme was high risk.67 In addition, the Department’s Projects and Investment Committee rejected the Scheme’s Full Business Case two days prior to the Scheme launch date as it did not believe the full £1.5 billion would be spent and was not able to confirm the scheme administrator’s IT solution would function, as it had yet to be fully developed and tested.68
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Government response AI summary
The government recognises the negative impact of the rushed timescale and limited stakeholder engagement on the scheme's delivery, stating that policy implementation will improve through robust public consultations and sharing lessons learned for future schemes.
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HM Treasury
24
Conclusion
Twenty-Seventh Report - Green Homes Gra…
Accepted
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 …
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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 to proceed, rather than 60 C&AG’s Report, Figure 10 and paras 10, 13, 3.2 61 C&AG’s Report, para 3.4, Q30 62 Qq 30–32 63 Qq 30–32 64 Q83 and C&AG’s Report, paras 10, 13, 15 65 Qq 80–81 66 Q30 67 C&AG’s Report, para 13 68 C&AG’s Report, para 14 69 Committee of Public Accounts, Household energy efficiency measures, Eleventh Report of Session 2016–17, HC 125, July 2016 16 Green Homes Grant Voucher Scheme ask for a Ministerial Direction.70 The Accounting Officer told us that she recognised the concerns of the Projects and Investment Committee, but believed the Scheme was still likely to achieve value for money even if it did not spend its full budget. This was informed by the Department’s analysis of 16 scenarios of different levels of scheme demand and implementation costs, which said that in only one scenario of much higher costs and much lower demand did the scheme fail to provide net benefits. Her assessment also referenced assurance received from the Government Digital Service that the parts of the IT solution developed to that point were secure and reliable, and correspondence from HM Treasury stating that it would consider extending the Scheme’s funding into the next financial year should delivery risks materialise.71
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Government response AI summary
The government explained that the Accounting Officer assessed the risks of the Green Homes Grant Voucher scheme, gained assurance on funding flexibility from HM Treasury and digital product approval from GDS, and consequently did not consider a ministerial direction to be required based on existing …
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HM Treasury
25
Conclusion
Twenty-Seventh Report - Green Homes Gra…
Accepted
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 …
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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 to the intended timetable”.72 Given the warnings raised concerning the Scheme’s high level of risk, we question whether the Accounting Officer’s justification to proceed was sufficient. Grant administrator procurement
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Government response AI summary
The government explained that the Accounting Officer assessed the risks of the Green Homes Grant Voucher scheme, gained assurance on funding flexibility from HM Treasury and digital product approval from GDS, and consequently did not consider a ministerial direction to be required based on existing …
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HM Treasury
26
Conclusion
Twenty-Seventh Report - Green Homes Gra…
Accepted
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 …
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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 in time for the launch. As a result, the Department allowed bidders to steadily deliver elements of the system in stages. Whereas other bidders thought fully implementing a system would take at least 15 weeks, ICF Consulting Services Ltd (ICF) thought it could do it in six and a half weeks and at lower cost.73
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Government response AI summary
The government agrees with the committee's findings, stating the recommendation is implemented, and details specific procedures it will undertake for future procurements, including robust supplier assessment, clear evaluation criteria, and thorough checks on bids and implementation plans.
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HM Treasury
27
Conclusion
Twenty-Seventh Report - Green Homes Gra…
Accepted
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 …
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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 were needed for voucher applications. This contributed to the delays that homeowners and installers faced in engaging with the Scheme.75
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Government response AI summary
The government agrees with the committee's findings, stating the recommendation is implemented, and details specific procedures it will undertake for future procurements, including robust supplier assessment, clear evaluation criteria, and thorough checks on bids and implementation plans, to prevent similar issues.
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HM Treasury
28
Recommendation
Twenty-Seventh Report - Green Homes Gra…
Accepted
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. …
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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. Its review stated that the Department should undertake further technical assessment on 70 Qq 55–59 71 Qq 53–55, 58, Note dated 1 October 2021 from Department for Business Energy and Industrial Strategy paras 5–7 72 Managing Public Money, Box 3.2, p 16, Managing public money - GOV.UK (www.gov.uk) 73 C&AG’s Report, paras 16, 3.9, 3.12 74 Qq 62, 131–132, 137 75 Q145 76 Q144 Green Homes Grant Voucher Scheme 17 the scheme administrator’s proposed solution, which the Department did not undertake.77 The Department accepted that it should have carried out a deeper and more thorough technical assessment, and that this could have prevented some of the issues it experienced subsequently. However, at the time it felt it understood the reasons for ICF’s lower costs, which were related to its accelerated speed of implementation.78
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Government response AI summary
The government agreed with the recommendation to improve procurement processes, outlining a detailed list of actions the department will undertake both before and after receiving bids. These actions include a two-stage process, robust supplier assessment, engaging GDS for IT systems evaluation, thorough evaluation of implementation …
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HM Treasury
29
Recommendation
Twenty-Seventh Report - Green Homes Gra…
Accepted
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 …
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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 follow up with any of the organisations contracting with ICF as it felt appropriate referencing would have been completed when ICF were qualified for the Crown Commercial Service framework it used for the procurement.80 However, given ICF were proposing to deliver substantially faster than the other bidders, the Department should have challenged ICF further as to why it felt it alone could do this. 77 C&AG’s Report, para 3.13, Qq 98, 133 78 Qq 98, 134, 144 79 Qq 62, 96–98, 136–137 80 Qq 159–162 18 Green Homes Grant Voucher Scheme
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Government response AI summary
The government agrees with the recommendation, stating it is 'implemented'. It commits to a range of enhanced procurement processes including considering two-stage processes for earlier supplier involvement, robust market assessments, analyzing CCS framework contracts for protection, improving evaluation training, engaging GDS for IT systems, and …
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HM Treasury