BEIS chief official had value fears over bills support

The BEIS (business, energy and industrial strategy) department’s former chief civil servant has revealed that she didn’t sign off the government’s massive energy bills support package because of concerns that it risked breaching Whitehall rules on propriety and value for money.

During a hearing of the House of Commons’ Public Accounts Committee (PAC) yesterday (Monday 27 February), it emerged that BEIS permanent secretary Sarah Munby had sought ministerial directions to proceed with the package of energy costs support, drawn up rapidly by the government last autumn in response to soaring bills.

Ministerial directions are used to enable ministers to over-rule objections about spending by permanent secretaries, who are accountable to Parliament for how their departments’ budgets are spent.

According to the Institute of Government thinktank, fewer than 100 ministerial directives were issued between 2000 and 2017 across the whole of Whitehall.

Munby, who is moving to become permanent secretary at the new Department for Science, Innovation and Technology, told the PAC that she had sought ministerial directions on both the domestic and non-domestic energy support schemes.

She said the expense of the domestic Energy Price Guarantee, which was initially estimated at £97bn when the scheme was being drawn up last autumn, was a “heavy item for any accounting officer” to bear.

Munby said other blocks to signing off the scheme were that anti-fraud measures had not been fully developed and the underpinning energy legislation had not yet been passed.

However she defended the broad brush nature of the EPG, which has been criticised on the grounds for being poorly targeted because it capped the energy bills of many richer households who didn’t require the support.

Even if the scheme’s introduction had been less rushed last autumn, it would still have been difficult to target support because of the way the energy system is designed, Munby said: “Except where targeting the very, very most vulnerable through the Warm Homes Discount, broader targeting was never something that the energy system would have successfully delivered even if we had more time to prepare.”

But looking forward, the civil servant said she is “not lying awake” worrying about a repeat of last year’s surge in energy costs. “The trajectory of energy prices is downward so we would expect the costs of these schemes to be pointing downward,” she said.

Jeremy Pocklington, in his first public appearance since being appointed permanent secretary at the recently established Department of Energy Security and Net Zero, told the committee that switching between suppliers is likely to return as wholesale prices continue to ease.

He said: “Switching will start to return as the year progresses and price cap returns close to £2,000 after the summer, we may see more switching coming back and more new tariffs coming into the market which will enable more switching.”