No time to waste? NAO report questions Government’s Net Zero R&I investment

By Georgina O’Reilly,Consultant
25/05/2023

In yet another roadblock (or rather cycleblock?) in the race to achieve net zero by 2050 - the National Audit Office (NAO) has cast doubt over the value for money in the Government’s research and innovation (R&I) investment to deliver on its target.

Against a backdrop of cost-of-living pressures, an energy crisis, and EU neighbours increasingly shying away from climate-friendly issues and obligations – the Government has stood firm in its net zero 2050 commitment and concomitant obligations.

However a report released this week by the NAO has called into question the lack of long-term public sector investment planning, and the complexities of navigating a busy R&I funding landscape.

Whilst the report recognised the significant progress made since the UK became the first country in the G7 to legislate for net zero emissions by 2050 in 2019 - including the release of the government’s Net Zero Research and Innovation Framework (the Framework), the establishment of the Net Zero Innovation Board, and the more recent Delivery Plan - the report called for greater clarity and oversight of government responsibility and progress measurement to keep the R&I investment on track. Many stakeholders in the sector have also called for independent tracking of financial flows in order to deliver clarity and ensure impact, but this as yet has not been picked up by the Government.

Perhaps most concerningly, the report called out the lack of defined outcomes in the Framework. Across every industry, from policy-making to wedding planning, it is critical to have a clear and well-defined outcome(s). Whether it be getting major legislative reform over the line, or getting through a wedding without a cousin butchering Bohemian Rhapsody at the reception, every undertaking must have a desired outcome. In this instance – the report acknowledged that in early 2023, the Department for Energy Security and Net Zero (DESNZ) was developing an Innovation Delivery Dashboard, including a set of indicators for measuring progress. However, the concern lay in the weight given to output-focused rather than outcome-focused in the proposed indicators. That means deliverables would be measured against the number of projects and organisations supported, rather than their potential for carbon emission reduction. Without clear outcomes there can be no effective progress and success monitoring.

One target the Government has set for itself in the name of net zero 2050, however, is the commitment to installing 600,000 heat pumps a year by 2028 to replace gas boilers. The roadmap for this is one of a number, including offshore wind, carbon capture, utilisation and storage, and hydrogen, with more roadmaps planned in the following months – all of which are seen as important routes to net zero. But progress on heat pumps could still struggle, as the government is already feeling the heat over the rapid increase required from current levels of 50,000 installations a year to 600,000. Additional issues have also risen this week by the announcement this week that the government is launching a review into the noise levels of heat pumps, following concerns over the potential combined noise impact of heat pumps on communities.

Another Government initiative coming under pressure is the Great British Insulation scheme. Home insulation is one of the most effective ways to reduce greenhouse gas emissions – but in a country of old, draughty houses – massed insulation is no small feat. Previous schemes introduced by the Government have been considered poorly implemented, and this scheme is, in reality, just a rebadged version of ECO+, with the main substantive change being that the Government has (metaphorically) slapped a Union Jack on it. The UK Business Council for Sustainable Development has calculated that the Government’s initiative of insulating 300,000 homes a year over the next three years would take 300 years to achieve and does not go far enough to heat the 19 million houses that need it.

At a time when scrutiny on R&I funding towards net zero initiatives is critical for their success and business confidence, the report has laid out a series of recommendations for improvement of oversight and successful delivery of outcomes. Recommendations include setting out responsibility for overseeing cross-government delivery in each of the seven categories within the Framework, determining what level of public investment is needed right through to 2050, and the articulation of clear and measurable outcomes against the Framework. If adopted, the recommendations can only strengthen the Government’s steadfast resolve to achieving net zero 2050. At present, it is debatable whether the private investment needed alongside public investment will be forthcoming, unless more is done to ensure businesses are confident in the Government’s plans, secondary issues such as collective heat pump noise are quickly addressed, and clear outcomes are outlined and delivered on.