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Public Accounts Committee Criticise Lack Of Control Of Levy Control Framework

February 8, 2017

By Paul Homewood

 

h/t Philip Bratby

 

image

http://www.parliament.uk/business/committees/committees-a-z/commons-select/public-accounts-committee/news-parliament-2015/energy-policy-levy-control-framework-report-published-16-17/

 

A damning report by the Public Accounts Committee on green energy schemes:

 

Forecasting Framework costs "poor"

The recommendation comes in a report examining the Levy Control Framework, which is intended to help control the costs of three government schemes to support low-carbon generation.

The Framework sets yearly caps on the forecast costs of the Renewables Obligation, Feed in Tariffs, and Contracts for Difference—schemes funded through levies on energy companies and ultimately paid for by consumers via energy bills.

The Committee concludes the Framework has "suffered from a lack of transparency, rigour and accountability" and forecasting of its costs has been poor.

£110 expected to be added to household energy bills in 2020

The government department responsible (formerly the Department of Energy & Climate Change, now the Department for Business, Energy & Industrial Strategy) continues to expect to overspend the Framework budget.

The report states that as a result, these costs are likely to add around £110 to the typical household’s yearly energy bill in 2020, £17 more than budgeted for.

The Committee is concerned there is a "culture of optimism bias" in the Department, having also highlighted "wildly optimistic" forecasts of demand for Green Deal loans in its Report from July last year, Household energy efficiency measures.

Department urged to "foster a culture of openness and transparency"

It urges the Department to "foster a culture of openness and transparency" around its consumer-funded energy  policies and work with HM Treasury to demonstrate the schemes provide value-for-money.

The report states:

"In July 2014 Government agreed to provide Parliament with an annual report on the impact of policies on energy bills, but has not done so since 2014.

The consumer-funded policies report which the Department published a few days before our evidence session on the Framework is not an adequate substitute for a full report on consumer bills: for example, it does not show the net impact of policies once cost-saving effects are included."

Chair’s comment

Meg Hillier MP, Chair of the PAC, said:

"Bill-payers deserve to know whether or not the energy schemes they fund represent good value.

The Government has failed to meet its commitment to report annually on the impact these policies are having on bills. Current arrangements just aren’t good enough.

At the same time, the Government expects the cost of levies to continue to bust the budget—meaning customers will pay more than expected.

This is a result of poor forecasting and further evidence of excessive optimism in the implementation of energy policy.

Government must take action to address this and also ensure customers can see clearly what they are paying towards existing and future schemes through their bills."

http://www.parliament.uk/business/committees/committees-a-z/commons-select/public-accounts-committee/news-parliament-2015/energy-policy-levy-control-framework-report-published-16-17/

 

As we know, although the impact on household electricity bills may be £110, the true cost to households is more than three times as much, when higher electricity prices have fed through into the price of goods and services, fares, taxes etc.

But what I find most amazing is how the PAC has pussyfooted around the real issue, that all of these costs are arising from the demands of the Climate Change Act. Meg Hillier, of course, has been a Labour MP since 2005, and helped to push Ed Miliband’s Act through Parliament.

Instead of now challenging the root cause of the problem, she and her Committee criticise the government for “poor forecasting”. This is actually the least of the problems, since the real issue with forecasting is knowing what the market price of electricity will be in future, something nobody knows.

As for the comment that bill-payers deserve to know whether or not the energy schemes they fund represent good value, I can only ask her what planet she is living on. Subsidies for renewable energy can never represent good value for money.

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11 Comments
  1. Joe Public permalink
    February 8, 2017 10:58 am

    “The Committee is concerned there is a “culture of optimism bias” in the Department, having also highlighted “wildly optimistic” forecasts of demand for Green Deal loans”

    Job preservation & improvements in chances for promotion:

    “The bureaucracy expands to meet the needs of the expanding bureaucracy.”

  2. AlecM permalink
    February 8, 2017 11:02 am

    What will these *ankers do when their jobs cease to exist?

    Sell fries to the Abbottpotamus perhaps?

    Or will they buy fries from the Abbottpotamus?

    Answers on a postcard please but do declare if you are a member of Common Purpose.

  3. Derek Buxton permalink
    February 8, 2017 11:37 am

    When this was starting, I wrote to my MP, now ex MP, who answered that they were putting a Bill in place called the “Green Scheme”. According to him prices would then fall, he was a limp-dim naturally. I responded by saying that it would increase the price of Energy but he would have it that it would not. But then as we all know, the limp-dims always do lie. Now my “conservative” possibly? does not answer on the grounds that he is too busy and /or I am not a Constituent of his. I am, I remember voting for him although throughout his campaign we saw neither hide nor hair of him or his staff.

    • AlecM permalink
      February 8, 2017 12:01 pm

      Green Tories become invisible once they enter a State Forest.

    • February 8, 2017 1:09 pm

      I have a cons MP like that, refuses to answer questions.

  4. February 8, 2017 12:03 pm

    Here is Ed Davey “leaving a legacy” just before the last election:

    http://www.thetimes.co.uk/tto/news/politics/article4366749.ece

    and here even the Guardian points the finger at the Lib Dems and their obsession with “meeting targets” regardless of cost:

    https://www.theguardian.com/environment/2016/nov/25/renewables-levy-cap-on-consumer-energy-bills-exceeded-by-1bn

    • John Palmer permalink
      February 8, 2017 8:11 pm

      Re: links… Times paywalled (and probably not worth the ££ they ask anyway) and the Guardian – begging for dosh as usual, before they go belly-up.

  5. NeilC permalink
    February 8, 2017 12:24 pm

    Just like the BBC always wittering on about how EU money paid for this and that. The government doesn’t seem to understand that it is not their money, it is the tax payers money.

    They should be getting the best value for every penny they spend. And then they spend £billions on the doctrine of a marxist Climate Change Act.

    It is time for a revolution, I do not want to be run by halfwits.

  6. TinyCO2 permalink
    February 8, 2017 1:19 pm

    If this was any other subject you’d have the BBC screaming about a tax on the poor and subsidising the rich.

  7. February 8, 2017 2:01 pm

    Reblogged this on Wolsten.

  8. Jackington permalink
    February 8, 2017 3:49 pm

    The Climate Change Act does not, and never will produce any measurable difference to global warming and is simply Virtue Signalling to the rest of the world and yet consider the damage it is doing to the UK population. The same goes for the International Development Fund. Repeal them both ASAP.

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