Select Committee on Environmental Audit Second Report

Transparency of figures in budgets and spending reviews

59. We have not always found it easy to disentangle funding streams over time and to distinguish the extent of additional funding made available. The previous Committee raised these issues on a number of occasions, notably with Mr Timms in taking evidence from him in March 2001.[67] Following that session, the Treasury promised to provide a note which clarified funding streams over time in particular in relation to energy efficiency and financial support for renewables.[68]

60. We are grateful to the Treasury for additional information, though their supplementary memorandum was submitted some four months later than expected. We are also disappointed that the Treasury has failed to provide satisfactory answers to some of the questions which we posed—a tendency which we have noted more generally in some of their responses.[69] Our concern about the transparency of information on financial flows still stands, and the Treasury's note does not entirely clarify matters. Complications tend to arise for a number of reasons, including:

  • the re­announcement in successive policy statements of the same financial support;
  • virement of moneys from potentially underspent budgets to other budgets;
  • structural changes to the mechanisms of government—such as the creation of the Carbon Trust and the transfer to it of the Energy Efficiency Best Practice Programme and other elements of funding;
  • the tendency to quote money available over different (and sometimes unspecified) timescales; and
  • the very complexity of the different sources of funding available and the manner in which they are routed through different policy mechanisms and institutions.

61. We produce below our own analysis of amounts of money available for energy efficiency and the promotion of renewable sources of energy as we have been able to establish it over the key budgetary and spending review white papers for the last 2 years. This attempts to trace the amount of money made available at each stage and evaluate the effect on funding in 2001-02 and 2002-03.

62. There are a number of points arising from this analysis:

  • ECA money from the Climate Change Levy has decreased by £40 million over the two years 2001-02 and 2002-03 from that originally anticipated in Budget 2000. Clearly this money has effectively being transferred to other budgets, and may well comprise a component of the extra £100 million for renewables which the Prime Minister announced in March 2001;
  • If the funding streams are annualised per year (as a straight average), the amount of money available in 2001-02 for renewables is little greater than that originally anticipated in PBR 1999 (£205 million compared to £190 million); and
  • The increase in funding available in 2002-03 is entirely due to an increase of £60 million in ECAs. If ECAs are stripped out on the grounds that they do not represent a real cash cost to the Government (see paragraph 32, above), then the level of direct funding available for 2002-03 falls to £135 million. We note in this connection the concern expressed by many organisations in response to the DTI's consultations on the Renewables Obligation at the low level of funding available."

63. The difficulties we have had in tracing monies in this way demonstrate in our view a desperate need for greater clarity in the presentation of figures. We therefore recommend that the Treasury develops and includes in future PBRs, Budgets, and Spending White Papers, a consistent and comprehensive table which sets out in an easily intelligible form funding sources for environmentally related policies, and the manner in which moneys are recycled.

Table 2: Direct Government funding for energy efficiency and promotion of renewables

  PBR 1999

  Budget 2000

  PBR 2000

  Budget 2001

  DTI press notice (10/3/2001)

  PBR 2001

Enhanced Capital Allowances for energy saving investments

£100m (01-02) and

[100m (02-03]

£100m (01-02) and

£140m (02-03)

£100m (01-02) and

£140m (02-03)

£70m (01-02) and

£130m (02-03)

[Net "saving" over previous forecasts of £30m in 01-02 and £10m in 02-03]

£70m (01-02) and

£130m (02-03)

Energy Efficiency Fund [Climate Change Levy recycled money]

- mutates into the Carbon Trust

£50m a year energy efficiency fund

[This fund was announced in Budget 1999. See 1999 Budget Report, table 1.3 line 39]

£50m a year energy efficiency fund

£100m over 3 years to fund Carbon Trust for promotion of energy efficiency

£50m over 3 years to promote development of new sources of renewable energy

[NB: text states that "the 2000 SR announced a new £50m a year energy efficiency providing £100m over 3 years for promotion and £50m over 3 years for development of new renewables"]

£100m over 3 years to fund a Carbon Trust

[The document is silent on the remaining £50m over 3 years, but the Treasury have subsequently clarified that this is allocated as follows: £39m DTI money for offshore wind, and £12m Maff money for energy crops. See next column, below; and Treasury supplementary memorandum (EAC Minutes of Evidence, HC 333-i, 2000-01, page 18)]

£50m a year for Carbon Trust

Energy Efficiency Best Practice Programme

[£22.5m a year.

DETR 2000 Annual Report, p45]

[£22.5m a year]

[£22.5m a year]

[Transferred to Carbon Trust]

[Transferred to Carbon Trust]

Promotion of new sources of renewable energy

[No specific mention of renewable funding amounts or sources]

£100m [over 3 years] from SR2000 and New Opportunities Fund (Lottery)

£50m over 3 years National Lottery money mainly for offshore wind and energy crops

£39m over 3 years DTI funding for offshore wind announced by PM in Oct 2000

£12m over 3 years for energy crops (announced Oct 2000)

[£50m over 3 years]

[£39m over 3 years]

[£12m over 3 years]

Prime Minister's "new" fund to promote renewables

A new £100m fund [over 3 years] to promote renewables [announced in PM's speech the preceeding day]

£100m over 3 years for green energy (announced in 6/3/01 PM speech at WWF). Details to be decided once the PIU report is produced

£100m over 3 years

DTI funding for renewable energy R&D

[£18m a year. DTI 2000 Annual Report, Cm 4611, p113]

[£18m a year]

[£18m a year]

[£18m a year]

£55.5m over 3 years for industry renewable energy R&D

[£55.5m over 3 years]

Funding available for 2001-02

  £190 million

  £190 million

  £190 million

  £188 million

  £205 million

Funding available for 2002-03

  £190 million

  £230 million

  £230 million

  £248 million

  £265 million


67   HC 333-i, 2000-01, QQ. 35-46; 87-91. Back

68   HC 333­i, 2000-01, pp. 18-19. Back

69   The memorandum is at Appendix 3. In responding, for example, to our question on funding (question 3), the Treasury omitted the main part of our question thereby failing to address the issue.  Back

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