The Department for Energy Security and Net Zero must work with the Treasury to outline a longer-term plan to fund net-zero innovation, MPs on the cross-party Public Accounts Committee (PAC) have said.
In a new report released today – Support for Innovation to Deliver Net Zero – the committee criticised the government for not considering the levels of long-term investment that will be needed to reach net zero. The PAC report points out that although the government has allocated £4.3bn of funding for net zero research and innovation up to 2025, it is “difficult for businesses to know what funding is available” and where they should go to find it. Support is currently being provided through 115 separate government funding programmes.
Indeed, as is often the case, short-termism from Whitehall also comes in for criticism from the committee’s MPs. The PAC’s report says that too often plans thought up by central government to support the development and transition to net-zero technologies are short-term, which “risks jeopardising efforts to attract the large amounts of private investment needed to reach net zero by 2050”. For example, the report points out Whitehall’s current delivery plan for net zero technology “only reflects funding for the spending review period from 2022-25”. “This provides little comfort for investors in the longer term,” the report adds.
In September Rishi Sunak announced a five year delay to the ban on selling new petrol and diesel cars – from 2030 to 2035 – thereby pushing back the UK’s phasing out of fossil fuels. This move was widely criticised as creating uncertainty for investors and businesses looking to develop electric vehicles. The PAC report highlights this as an example of the government’s short-term thinking and approach to the green transition.
The report is critical of the siloed nature of government action on reaching net zero. It points to the fact that several departments have responsibility for net zero innovation, yet do not work cohesively in partnership on the green transition. Departments working on this issue include the Department for Energy Security and Net Zero and the Department for Science, Innovation and Technology, but the PAC report points out that there is “no one person to oversee the government’s progress across each of the technology areas”.
[See also: Patrick Vallance’s seven rules for net zero]
Recognising that risk and failure will be essential to achieving successful net-zero innovation, the committee points out that it has “yet to define what level of failure… is tolerable”. Highlighting the uncertainty this creates for investors and businesses, the report adds: “therefore [the government’s] net-zero objectives overall are jeopardised”.
The PAC report recommends that the Department for Net Zero, in partnership with the Treasury, lays down a clear and concise plan, backed by adequate funding for supporting net zero technologies. The MPs are clear this plan should stretch “beyond the confines of the spending review”, so look further into the future.
Meg Hillier, the chair of the committee, and Labour MP for Hackney South and Shoreditch, told Spotlight that the Department for Net Zero must be “clear in its direction of travel and intent” ahead of the next spending review in asking the Treasury for longer-term funding for net zero innovation. She explained this would provide “long-term certainty for investors”, but added that in light of recent announcements by government, there may be a “bit of a hurdle” for the department in “convincing people it’s got a serious [net zero] agenda going forward”.
The report suggests the government – led by the Department for Net Zero – should identify clearer responsibilities across departments for net-zero technologies. This could be done by appointing a single accountable person to oversee the government’s progress on investing in, developing and supporting new sustainable technologies. The PAC also recommend that the Department for Net Zero should create a better public reporting system for progress towards net zero to increase transparency.
Hillier told Spotlight that better public reporting is essential. The PAC suggests the government establish a clear and accessible “dashboard of progress” so that the public can see where funding is being spent and which innovations are being invested in. This will allow the government to “have an honest discussion with the public about what’s working, what’s not and what it’s costing”, said Hillier. She added that overall, the government must see net zero as a prime opportunity. “If we do something well [in the UK] we can export our technology solutions,” she said.
In response to the report, a spokesperson for the Department for Net Zero said: “The UK is a global leader in clean energy, having attracted £200bn in low-carbon investment since 2010, with a further £100bn expected by 2030 – powering up Britain and supporting 480,000 jobs.” They said the UK was investing £4.2bn in long-term research and innovation. They added: “We lead the world in tackling climate change, cutting emissions by nearly 50 per cent since 1990 and decarbonising faster than any other major economy as we continue to drive forward our net zero ambitions.”