Source · Select Committees · Public Accounts Committee
Recommendation 29
29
Accepted
Department failed to act sufficiently on identified quality risks in its programme register.
Recommendation
Since November 2022, the Department’s programme risk register had included risks to quality, assessments and standards, yet the Department did not take sufficient action to check whether the risks were materialising, to prevent them from happening, or to escalate the risks appropriately. In November 2022, the Department recorded a risk that TrustMark might not carry out compliance checks on time or to the correct standard. It identified the risk as high impact but “very unlikely” to materialise and therefore judged it was a risk it could tolerate and not escalate to the portfolio level. In June 2023, it identified a risk that failures in the wider compliance and assurance processes could limit installation quality. It judged this risk was of medium impact and “possible” to materialise.64 The National Audit Office found that the Department did not have a dashboard reporting against key delivery risks, and that it only escalated these concerns to its Net Zero Buildings Portfolio Board in January 2025, once they had materialised as issues.65 Complicated and siloed quality assurance and consumer protection system
Government Response Summary
The government states that risk management and escalation is already managed through formal governance across projects, schemes and portfolios, with risks escalated as appropriate. The department is committed to reform of our consumer protection system and has set up both an internal programme board to track progress which includes Treasury and NISTA representation, as well as an external expert panel.
Government Response
Accepted
HM Government
Accepted
4. PAC conclusion: The Department’s senior officials took two years to recognise the scale of the problems, which led to many faulty installations that could have been avoided. This is unacceptable and demonstrates very poor overall supervision. 4. PAC recommendation: The Department should review its risk management and internal escalation systems so that issues identified within specific schemes are escalated swiftly and appropriately. This should apply equally to schemes funded through consumer levies as well as those directly funded by the taxpayer. 4.1 The government agrees with the Committee’s recommendation. Recommendation implemented 4.2 Risk management and associated escalation within DESNZ is managed through formal governance across projects, live schemes and portfolios. Each scheme has formal risk management in place with escalation of risks, as appropriate, to portfolio (Director General) level. While there are no further plans to introduce new levy schemes following the closure of ECO4 and GBIS, all new schemes will be subject to the same rigour of risk management processes. 4.3 As part of the risk management and escalation processes, officials have presented on four different occasions to the department’s Audit, Risk and Assurance (ARAC) Committee about risks associated with the rates of non-compliance identified in ECO4 and GBIS. 4.4 All schemes are subject to scrutiny from the internal Design Authority, and any spend is subject to agreed approval processes culminating in the Investment Committee for spend over £265 million CDEL or £50 million RDEL. The delegated authority limits are subject to revision by HM Treasury. In addition, government funded-capital schemes (WH: Local Grant and WH: Social Housing Decarbonisation Fund) are subject to external scrutiny from the National Infrastructure and Service Transformation Authority (NISTA) and the Treasury because they are set up as a Government Major Programme (GMPP). Risk is an integral part of providing assurance to all these review bodies. 4.5 In responding to the issues with ECO4 and GBIS the department is committed to reform of our consumer protection system and has set up both an internal programme board to track progress which includes Treasury and NISTA representation, as well as an external expert panel. The department is committed to external input and challenge. 4.6 To manage progress on the find-and-fix programme and remediation of all identified non-compliance, the department has set up a project board with robust risk management processes to manage the heightened risks. In addition, a senior civil servant now sits as an observer on the TrustMark board.