A leading group of MPs has criticised the Whitehall department responsible for the sale of the Green Investment Bank (GIB), and warned its original ambitions have not been properly protected.
In a report out today, the public accounts committee said the sale of the GIB took far longer than originally planned and the Department of Business, Energy and Industrial Strategy (BEIS) made a number of compromises in order to complete the sale.
The GIB was created in 2012 in order to encourage investment in offshore wind farms and other aspects of the green economy.
But the bank was sold to a group of investors led by Macquarie in August last year for £1.6 billion.
The deal was criticised at the time by some opposition politicians, including the co-leader of the Green Party, Jonathan Bartley, who said last year it was “bad news for everyone who cares about the future of renewable energy”.
The GIB was subsequently rebranded as the Green Investment Group.
According to the public accounts committee report, BEIS had two main objectives for the sale of the GIB – to remove it from the public sector balance sheet and therefore reduce public debt and also to achieve value for money.
But the report also notes the standard auction process took nearly 18 months, which was more than double the time expected.
In addition, the report warns the measures put in place by the Whitehall department to protect the GIB’s green purposes are ‘not sufficient’ to ensure it will be an ‘enduring institution’.
And the MPs claim it remains unclear whether the GIG will continue to support the Government’s own energy policies or have an impact on the UK’s climate change goals.
The deputy chair of the public accounts committee, Sir Geoffrey Clifton-Brown, said the manner in which the GIB was sold off was ‘deeply regrettable’.
‘The protracted sale process put Government on the back foot; had it been shrewder, it could have secured a better return for taxpayers,’ added Sir Geoffrey.
‘It was a mistake to repeal legislation protecting GIB’s green investment obligations without securing firmer commitments from potential buyers.
‘Macquarie told us such commitments did not affect the price it was prepared to pay, indicating the Government could and should have strengthened these commitments contractually,’ said Sir Geoffrey.
‘We expect the Government to keep us updated on the GIG’s future activities in the UK but there are broader lessons here – not least for how Government evaluates public assets and, when relevant, prepares them for sale.’
Responding to the report, a government spokesman said:
‘The UK leads the world in green finance and the Green Investment Bank (GIB) has lead investments of more than £12bn in the green economy over four years. It has made substantial green investments since its sale and plays a key role in the Government’s Green Finance Taskforce, as part of our Clean Growth Strategy.’
To read the full report by the public accounts committee, click here.