The majority of the £70 million of savings the Department of Energy and Climate Change (DECC) was ordered to find by Chancellor George Osborne will be sourced from cuts to energy efficiency subsidies, the department’s annual report has revealed.
DECC published its annual report for the 2014/15 financial year this afternoon and within its budgetary plan for the coming year disclosed a breakdown of the £70 million in departmental savings it will make.
And energy efficiency subsidies will bear the brunt of the savings, with the department aiming to save £40 million from the programme while it “considers the right long-term framework for the home-energy-efficiency market”.
The news comes just a week after the government confirmed it would not be proceeding with the proposed zero carbon Allowable Solutions scheme or the increase in on-site energy efficiency standards which was proposed for 2016, prompting an angry backlash from the opposition Labour party and the efficiency sector.
The remaining £30 million in savings will be sourced by driving out underspends from existing contracts (£10 million) – in particular where inflation was forecast to be higher than it currently is – and through underspends within DECC’s Arms Length Bodies (£20 million), which include the Coal Authority and Ofgem.
It had been feared that the budgetary restrictions would result in job losses at a department which is already said to be one of the trimmest and most efficient at Whitehall following numerous other budget cuts in previous years.
Speaking to the Guardian earlier this month, former energy and climate change secretary Ed Davey warned that DECC’s staff budget faced cuts of up to 90% over the next three years – measures which, Davey said, would threaten the department’s ability to carry out its duties and adequately tackle climate change.