Impact of Green Investment Bank ‘unclear’, say auditors

13 Dec 17

It is unclear whether the Green Investment Bank achieved its aim to boost the UK’s green economy, according to the National Audit Office.

The watchdog also criticised the government for failing to secure long-term commitments from the bank’s new owners.

The GIB was set up in 2012 by former business secretary Vince Cable in order to kick-start investment in a range of green infrastructure projects. As of March 2017, GIB had committed around £3.4bn to 100 projects.

It was sold in August this year to Australian business group Macquarie for £2.3bn after the government decided it was no longer affordable using public money. It was renamed the Green Investment Group.

Macquarie made a non-binding three-year public commitment to continue with GIB’s green objectives.

A report published today by the NAO found that, although the GIB had successfully boosted the offshore wind market, its impact in other sectors was “less certain”.

It also said that by failing to secure a legal obligation from Macquarie to continue with ‘green objectives’, the government could not guarantee the GIB would achieve value for money.

It criticised the former Department for Business, Energy and Industrial Strategy for lacking “clear criteria or evidence to show that the bank had achieved its intended green impact”.

The report also found that the sale of the GIB “took much longer than expected”, and that the final sale price was at the lower end of the government’s valuation.  

NAO head Amyas Morse said: “Ultimately the value for money of the GIB intervention will only be seen over time.

“A key test will be whether the government needs to intervene again in this way to stimulate growth in the green economy and to help it achieve its climate change commitments.”

Earlier this year, the GIB produced a series of reports examining its impact on the green economy.  The GIB said: “When we started work in 2012 there wasn’t a way of measuring green impact that was meaningful to us.”

When the GIB was sold, Cable criticised the government for undermining investment in the green economy, and said it risked setting the UK back years in its efforts to fight climate change.

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