2021 was a big year for government’s commitments to the environment. The statutory target to achieve net zero greenhouse gas emissions by 2050 was backed up with a strategy and the Environment Bill gives legal force to nature recovery targets. The challenge now lies in turning targets and strategies into actions that will combat rising temperatures and restore our natural environment in a way which represents both short- and long-term value for money for taxpayers at a time when households and businesses are under intense financial pressure.
The Treasury acknowledged in its recent Net Zero Review that ‘the transition has implications for current and future taxpayers’ but ‘policy to support the transition can help make the most of the opportunities and keep costs down’.
The scale and complexity of the task is daunting which is why external scrutiny is critical. Government has recognised this by creating the Climate Change Committee and the Office for Environmental Protection to help monitor progress towards net zero and restoring the natural environment. Meanwhile, the National Audit Office’s role will be to scrutinise how efficiently and effectively public money is spent to achieve those goals.
The risks of waste, escalating costs, and projects failing to deliver significant environmental benefit are high, while failing to prepare for a changing climate is likely to impose a heavy cost on future generations. We will be keeping a close eye on how well government is spending to achieve both short-term and long-term value for money.
Our long experience of scrutinising government spending already offers many lessons. We see three particularly significant challenges: the need for a whole-economy response; the critical role of effective public engagement; and the importance of costed programmes with disciplined management.
The changes required won’t be achieved unless government action supports effective market responses, engaging public, private and voluntary sectors. We have seen the cost of failing to do this with the Green Homes Voucher Scheme where the complexity and certification requirements hindered energy-efficiency installers from mobilising to meet demand. But when government gets this coordination right, as with the covid vaccine roll-out, it is a force multiplier.
The next phase of decarbonising the economy needs buy-in from consumers and citizens. With energy and fuel costs already high, government will need to be clear on how the cost of replacing gas boilers or switching to electric cars will be managed. Our work has shown that interventions designed to promote behaviour change need careful testing if they are to be successful. The mandatory charge for plastic shopping bags has significantly reduced their use. But the roll-out of smart meters saw energy companies find it difficult to get customers to commit to installation appointments.
New technologies and innovative policies will be needed to limit the impact of climate change. However, the novelty of the problem must not distract from getting the basics right. Implementing these new solutions will require costed strategies with clear objectives, active risk management, and ways to evaluate progress so it can correct course when needed. We have often seen this go wrong, such as with the Emergency Services Network which has been beset with delays and cost overruns. A lack of robust planning failed to consider first-responder needs and how the new communications technology will integrate with other systems. This is why, as with our report yesterday on tackling local air quality breaches, it is important we look at programmes while they are underway to test that they are set up for success.
We must also consider the longer term. Poor investment decisions for infrastructure such as flood defences could result in far higher costs if they do not make us resilient in dealing with a changing climate. When we looked at the deal government struck to build Hinkley Point C we were concerned that it had not fully assessed the long-term costs for consumers. Government will need to learn from that as it seeks to deliver on its energy security strategy.
The COVID pandemic has vividly shown the cost of inadequate preparation for whole system emergencies. At a time of rising prices for consumers and inflation eating away at government spending power, government must not only spend wisely now but also for future generations.
Gareth Davies
Comptroller & Auditor General
This article was first published in the Daily Telegraph
Author
Gareth Davies
Gareth Davies was appointed C&AG in June 2019. Before his appointment as C&AG, he was Head of Public Services at Mazars, a global accountancy firm specialising in audit, tax and advisory services. Prior to this, he was Managing Director of the Audit Commission’s Audit Practice. His experience spans financial and value for money audit, organisational leadership and board governance.
Gareth is a Fellow of the Chartered Institute of Public Finance and Accountancy and a Fellow of the Institute of Chartered Accountants in England and Wales. He is a non-executive Board member of the INTOSAI Development Initiative (IDI) which supports Supreme Audit Institutions in developing countries to sustainably enhance their performance and capacity.
