Recommendation 18

This was the first time a SAR had been used and so we asked the Department and HM Treasury whether they had the skills and experience necessary to successfully deliver the SAR at the outset of the process. The Department told us that despite the exercises and war-gaming to prepare for the SAR, the process was “highly novel, complex, first of 30 Qq 86, 94–95; C&AG’s Report, paras 2.16, 2.19 31 Q 95 32 Q 86; C&AG’s Report, para 2.19 33 C&AG’s Report, para 2.15 34 Q 99 35 Qq 24, 89; C&AG’s Report, para 2.10, Figure 9, Glossary 36 C&AG’s Report, para 12, 3.2 37 Qq 24, 27, 29, 31 16 Bulb Energy a kind” which meant that it needed expert advice.38 By 31 January 2023, the Department had spent £53 million in fees for professional advice relating to the SAR process for Bulb. Of this, the Department spent £49.9 million on Teneo’s fees and £2.8 million on its own advisers. Teneo told us that it expected its fees to be £60 million by the end of the SAR, and this was part of the costs for the SAR reflected in the NAO report. We therefore asked the Department whether, with hindsight, there were areas where it could have saved money on fees or where it had potentially overpaid.39 The Department told us that it scrutinised the fees being charged by Teneo carefully, and that it hired another professional advisory firm to help with the review of these fees. We asked whether it had been possible to benchmark the fees. The Department and HM Treasury told us it was aware that the legal fees it had paid were below commercial rates, but that there was no simple reference class they could use, but that it would take this away as a point to consider. They also told us that the that Teneo had a legal obligation to the High Court to keep costs reasonable and as fair as possible.40