Recommendations & Conclusions
13 items
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
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
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
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