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The time is right to merge the bodies delivering energy efficiency

ImageNow we have one Government department for energy supply and demand the time is right to merge the Carbon Trust and Energy Saving Trust, two bodies with the same overall objectives

“Why do we need two ways of telling the time? That was the evocative phrase used in a recent House of Lords committee report which examined how the UK delivers its energy efficiency objectives.

What prompted this horological comparison was not to do with divide between energy supply and energy demand policy in two different government departments. Although that would have been a very fair criticism up until last month, when after 16 years of separation the Prime Minster reinvented the Department of Energy, abolished after the 1992 election.

Rather it refers to the fact that two separate agencies exist, both funded by government, both intended to make us all aware of the enormous potential to stop wasting so much fuel.

As it happens, the first of the “two ways to tell the time” was created at precisely the same time as the original Department of Energy disappeared. The winning Conservative manifesto of 1992 promised to create an Energy Saving Trust (EST) as a partnership with British Gas (who owned the Trust’s name), the then twelve regional electricity companies, and the two vertically integrated Scottish electricity companies.

Prime Minister John Major did so. He put his former Cabinet colleague, John Moore, in charge. The Trust’s remit was simply stated. It was to make households aware of the benefits of saving kilowatt hours of energy.

Government demarcation line

The EST hit a demarcation line within government when it came to the business sector. Ever since the 1970s, each government region had employed a regional Energy Conservation Officer, plus a support team, aimed at getting mainly heavy energy users to invest in energy efficiency measures in their processes. They didn’t concentrate much on the services sector, occupying commercial buildings; nor much of the public sector; nor many of the 4m smaller companies.

During the 1990s the UK economy changed. Put starkly, work became much less blue collar, far more white collar. That had major repercussions regarding where energy was being used. Yes of course a steel or paper works, however efficient, would always use far more energy per unit of GDP than the most profligate department store or insurance broker’s offices. But there were fewer and fewer of the former, more and more of the latter.

It was acknowledged that more policy attention needed to be paid to these consumers. The option was available to extend the remit of the EST to cover non-household energy use. Instead in 2000 the Prime Minister, Tony Blair, decided to create a new quango. Called the Carbon Trust (CT), it was designed to be “business led”. Its chairman was not to be a former Cabinet Minister. But a Captain of Industry, a former head of Ford Motors.

The argument was that as the target audiences were different, the messages would need to be different. And so it required two different entities to deliver. This was a completely different approach from that of any other European country, where in each case a single government agency undertakes the outreach energy saving role.

Initially there were talks of providing common backroom services, (human resources, payroll etc). That never happened. The two Trust chairmen do sit on each other’s boards as non-executives. The chief executives do meet up from time to time.

Straying onto each other’s territory

The demarcation lines between the staff, jealously guarded, occasionally become fluid. There is a certain judicious straying onto each other’s territory. Two examples: in Scotland the EST handle a zero interest loan scheme for energy efficiency measures for businesses. Meanwhile the Carbon Trust sets out detailed policy prescriptions for delivering more microgeneration – in the residential sector.

For local government, the division of responsibilities is potentially particularly irksome. For buildings where councils pay the bills, they must turn to the CT for help; when the local authority has tenants, to the EST.

Very different cultures have developed between the two Trusts. Both manage to irritate with “unfair competition” those providing energy saving services in the private sector, either by running business advice schemes and conferences (CT), or by bidding successfully to run other government programmes (EST). Such gripes are familiar territory to those running similar agencies throughout Europe.

But what happens nowhere else is this curious doubling up of bureaucracy. With Treasury grants this year of £m and £m,these are now sizable entities by any standards. But they are entities with what are ultimately very similar overall objectives. For years, every objective commentator has argued for bringing the two parts of energy policy into one Department. This autumn at last this happened. The department was given a very specific role, by including in its name the phrase “Climate Change”, the first European government to do so. The same kind of rationalisation needs to occur with the agencies funded to deliver. They need to merge into one. We do not need two ways of telling the time.

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