Responding to the Chancellor’s changes to the CRC Energy Efficiency schemein yesterday’s Comprehensive Spending Review announcement, John Maddocks, CIPFA's Technical Manager, said:
‘Changes to the scheme announced yesterday are fundamental. Removing the complex revenue recycling process will increase the cost for public bodies of lowering their carbon emissions. The scheme has now clarified the price attached to carbon emissions, although it does add an additional financial burden for public and private sector organisations.’
‘Further policy decisions in respect of carbon allowance sales will determine how the scheme develops. CIPFA will monitor the developments to the scheme and will contribute to the debate that will take place.’
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1. On Wednesday the Chancellor announced as part of the CSR that revenue raised from the CRC Energy Efficiency Scheme will now be used to support the public finances (including spending on the environment), rather than recycled to participants.
The CRC Energy Efficiency Scheme allowance revenue recycling process was designed to return the April allowances sale money received by the government back to the participants, in October of the same year. CRC Energy Efficiency Scheme participants would get more or less than they had paid for allowances, based on a complex calculation which sought to factor in their relative performance in reducing energy use. While the exact amount recycled back to any one participant was difficult to forecast the idea was to recycle all monies received back, with a view to making the scheme 'revenue neutral'.
The change means that money paid for allowances in April will not be recycled back to participants, so the cost of the CRC allowances will no longer be reduced by any monies that would have been received through the recycling process.
2. About CIPFA
CIPFA, the Chartered Institute of Public Finance and Accountancy, is the professional body for people in public finance. Our 14,000 members work throughout the public services, in national audit agencies, in major accountancy firms, and in other bodies where public money needs to be effectively and efficiently managed. As the world’s only professional accountancy body to specialise in public services, CIPFA’s portfolio of qualifications are the foundation for a career in public finance. They include the benchmark professional qualification for public sector accountants as well as a postgraduate diploma for people already working in leadership positions. They are taught by our in-house CIPFA Education and Training Centre as well as other places of learning around the world. We also champion high performance in public services, translating our experience and insight into clear advice and practical services. They include information and guidance, courses and conferences, property and asset management solutions, consultancy and interim people for a range of public sector clients. Globally, CIPFA shows the way in public finance by standing up for sound public financial management and good governance. We work with donors, partner governments, accountancy bodies and the public sector around the world to advance public finance and support better public services.