Quangos jostle for position at Green Investment Bank

Two of the largest government-backed bodies earmarked for the axe in today's report from the Green Investment Bank Commission have hinted they could continue to play a major role in the new Green Investment Bank (GIB), even if they are disbanded by the coalition government.

The GIB Commission report recommended that more than £2bn of funding could be freed up for the new bank by axing three green quangos and six funds, including the Carbon Trust, Energy Technologies Institute (ETI), Technology Strategy Board and Environmental Transformation Fund.

Citing evidence from a recent National Audit Office report that argued that several of the government's green bodies have overlapping roles, the report said the rapid rationalisation of low-carbon quangos should "ensure value for the taxpayer, while improving service delivery and simultaneously freeing up money to support Britain’s transition to a low-carbon economy".

It added that a dedicated green bank could draw on some of the people and skills at the existing quangos, while providing a better forum for raising private sector investment for low-carbon projects.

However, both the Carbon Trust and the ETI this afternoon released statements arguing that the bodies already had a good track record at generating private sector investment for green projects.

"Our offshore wind and other Carbon Trust work successfully leverages eight times as much private sector investment as we receive in public funding, resulting in hundreds of millions of pounds for the low-carbon economy," said Carbon Trust chief executive Tom Delay, noting that the organisation today announced that it has secured additional private sector backing for its Offshore Wind Accelerator scheme.

His comments were echoed by ETI chief executive Dr David Clarke, who suggested that the implied criticism of the body in the commission report was based on a misconception over its role.

"It is important to recognise that the ETI is a private-public partnership involving major global industries – BP, Caterpillar, EDF, E.ON, Rolls-Royce and Shell – working with the UK government as a limited liability partnership and as such is not a quango," he said. "We invest in large-scale engineering projects on a commercial basis and are not a grant-giving body."

He added that the ETI had already invested £60m in 24 technology development and demonstration projects over the past 18 months, and had a further £100m of projects in pipeline, with much of the funding provided by the private sector.

"The ETI investment approach is very much in line with the proposals in the report," he argued, pointing out that the commission's recommendation that the GIB should provide commercially structured investments that "double or treble the private sector leverage, while doubling the pace of development" largely mirrors the approach already taken by the ETI.

Meanwhile, a spokesman for the Technology Strategy Board downplayed reports suggesting the quango is facing the axe.

"Among [the GIB Commission's] proposals are that approximately £30m per year of Technology Strategy Board funding, which is allocated to low carbon, could be brought into the Green Investment Bank," he said. "The report does not propose, as some media have implied, that the whole organisation should become part of the bank… We already work closely in partnership with other bodies concerned with energy and low-carbon technologies to ensure that our activities are complementary, and we would take a similar approach to the Green Investment Bank as and when it is established."