According to the study carried out by the National Audit Office (NAO), a board made up of ministers from the Treasury and Energy departments has failed to adequately measure the policy-related outcomes of green subsidies.
The NAO also took aim at the Levy Control Framework (LCF), which it said was not clear enough and had the potential to deter investors in the UK energy sector. The LCF was created in 2011 in an attempt to track the cost and benefits of green levies.
The current spending cap was set at £2bn for 2011-12 but is set to rise by £4.6bn by 2020. The fund will finance renewable energy projects.
NAO: DECC needs to demonstrate robust reporting process
Despite NAO’s call for certainty and transparent monitoring, the report states that the board set up to control spending had not looked closely enough at the impact of green levies on policy objectives.
One example of misguided reporting which was given, explained that the board measured the impact of building new windfarms on energy bills but not in terms of reducing carbon emissions.
DECC have stated that the overall cost of policies to consumers is an additional £112 on the average energy bill. This figure is expected to rise to £191 by 2020.
The NAO said: “As consumer-funded spending increases and new schemes are introduced, [DECC] needs to assure Parliament and the public that it has robust arrangements to monitor, control and report on all consumer-funded spending, and the outcomes it is intended to secure.”
‘Energy and climate change policies, will reduce household energy bills in the long-run’
The DECC released the following statement: “The NAO report is supportive of the work government is doing to control costs for consumers and concludes that the LCF is providing certainty to investors.
“The LCF helps fund investment in renewable energy as well as support for vulnerable and elderly through the Warm Home Discount.
“Government monitors and controls expenditure on schemes that are funded by consumer bills very carefully.
Energy and climate change policies, will reduce household energy bills in the long-run, with bills being on average 11%, or £166, lower than they would otherwise be in 2020.”