The now-privatised Green Investment Bank (GIB) failed to live up to original ambitions, according to the Parliamentary watchdog, the Public Accounts Committee (PAC), which says its objectives have not been sufficiently protected.
In a PAC report which also looks at the wider issue of how governments sell off assets, MPs said the GIB attracted substantial private investment into some sectors of the green economy, but the Department for Business, Energy & Industrial Strategy (Beis) did not know whether it achieved its objectives.
The Government sold the GIB to Macquarie in August 2017 for £1.6bn. The report said the sale process took far longer than planned, and the approach of Beis was reactive and it had to make a number of compromises to complete the sale.
“The Government chose to sell the GIB before fully assessing its impact. In making decisions about [the bank’s] future, the department prioritised reducing public debt and how much money could be gained from the sale over the continued delivery of the GIB’s green objective,” the report said.
“It is unclear whether Green Investment Group (the former GIB) will continue to support the Government’s energy policy or continue to have an impact on the UK’s climate change goals.”
PAC deputy chair Sir Geoffrey Clifton-Brown said the manner in which the bank was sold, which followed concerted opposition in Parliament, was “deeply regrettable”.
”The Government did not carry out a full assessment of the bank’s impact before deciding to sell, nor did it secure adequate assurance over its future role,” he said.
“This was a UK initiative but the rebranded Green Investment Group is not bound to invest in the UK’s energy policy at all, nor to invest in the kind of technologies that support its climate objectives.
“The protracted sale process put the Government on the back foot; had it been shrewder, it could have secured a better return for taxpayers.
“It was a mistake to repeal legislation protecting the 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 that the Government could and should have strengthened these commitments contractually.”