Budget 2015 - Departmental spending reductions could halve DECC’s budget and reduce staffing by 90 per cent

Friday 3 July 2015
Dustin Benton Dustin BentonActing deputy director020 7630 4522dbenton@green-alliance.org.uk
Senior academics have written to the government to express their concern that reductions will threaten DECC’s ability to reform the UK’s energy market and deliver on climate policy 

Departmental expenditure reductions, expected to be confirmed in next week’s Budget, could threaten the government’s ability to deliver its planned energy reforms and climate policy, according to new analysis by the think tank Green Alliance. [1] 

What new spending reductions could mean for DECC shows how large historic liabilities from the nuclear and coal industries, a commitment to protect capital expenditure and the 'roller coaster' effect of applying spending reductions early on in the parliament could reduce DECC's budget by half by 2017-18; and its resource budget, which pays for programmes and staff, could fall 90 per cent by 2018-19. 

These reductions would have a major impact on DECC staffing, innovation research and energy efficiency spending. Although they would not affect the consumer levies that pay for low carbon generation, reducing spending on staffing and innovation could raise energy costs to consumers,  by making it harder for government to negotiate good deals for back up capacity, low carbon generation and other energy services.

Matthew Spencer, director of Green Alliance, said:

“Less than a fifth of DECC’s budget is spent on its core mission of reducing energy costs and accelerating low carbon energy investment. Spending reductions will focus on these areas because the department is lumbered with huge historic liabilities from the nuclear and coal industries. The government’s ability to get a good deal for current consumers and future citizens will decline rapidly unless DECC gets a much better settlement than predicted in next week’s Budget.” 

Eight senior academics have written to Rt Hon Oliver Letwin MP, minister for government policy, to raise their concern about the impact of the budget reductions on UK energy policy and climate action. Paul Ekins OBE, professor of Resources and Environmental Policy at University College London, said:

“The prime minister went into the general election with an admirable commitment to deliver a low carbon energy system for the UK. DECC civil servants are already very stretched in delivering this historic imperative. We are concerned that the next round of budget reductions could inadvertently undermine the government’s ability to complete its important energy market reforms and deliver climate policy. We have written to Oliver Letwin to ask him to intervene because he is there to protect the prime minister’s policy agenda and, therefore, DECC’s ability to deliver it.”

ENDS

Notes
[1] Green Alliance is a charity and independent think tank focused on ambitious leadership for the environment. Founded in 1979 “to inject an environmental perspective into the political life of Britain” we have been inspiring and influencing change for over 35 years. www.green-alliance.org.uk