In the land of the quangocrats

Spent the morning at a Regen SW workshop on the Heat and Energy Saving consultation. Before we got to the main course (a presentation by the DECC civil servant responsible for the consultation), we were treated to an hors d'oeuvre from another DECC civil servant on the Community Energy Saving Programme (CESP).

For those not familiar with CESP, it is the successor to CERT (the Carbon Emission Reduction Target), which itself was the successor to EEC (the Energy-Efficiency Commitment). All of these mechanisms place obligations on energy suppliers (and now, under CESP, on generators too, as though generators have any influence on the following) to improve the theoretical energy-efficiency of a (small) defined proportion of their customers' properties, with particular emphasis on social housing. The VILE companies' main response to this obligation under the current scheme (CERT) has been to give away 120 million low-energy lightbulbs to no one in particular. This is the effect of trying to encourage people to use less of something while keeping its cost low, through supply push (rather than demand pull) intermediated by companies who have vested interests in preserving the status quo.

But CERT, we learnt today, is not dumb enough. The government set themselves the difficult task, with CESP, of devising something even dumber. It seems that under CERT, people have ignorantly been choosing the cheapest options to meet their obligations. This does not suit the Government, for whom a job is never done until it has encouraged us to do it as expensively as possible. So, under CESP, the incentive will be weighted to encourage people to implement expensive and ineffective options, and to discourage people from implementing cheap, efficient options.

The example that was given was that loft insulation, which is a relatively cheap and effective way of making homes efficient, would be credited with only half the carbon that it is assumed to save (i.e. half the contribution towards the obligation). On the other hand, air-source heat pumps, which the Government's figures (correctly) suggest don't contribute much to carbon savings relative to their cost, will be attributed three times their potential savings for the purpose of calculating their contribution to meeting the obligation.The Government hopes in this way to encourage the VILE companies to put in as many air-source heat pumps and as little loft-insulation as possible, thereby ensuring that we save as little carbon for our money as possible.

But this is not complicated enough for them. The Government has decided that it makes most sense to install multiple technologies at once, regardless of whether the same teams would install (say) insulation, a new boiler and photovoltaic panels on the roof. They wouldn't, of course, but when has the Government ever let reality stand in the way of opportunities to complicate things to perverse effect and increased cost? They have therefore devised a mechanism whereby the contribution of a simultaneous installation of multiple technologies will be assumed to be worth more than the sum of its parts. A new boiler may contribute X (nominal carbon-savings according to the warped scale described above, and accordingly to the obligation) and cavity-wall insulation may contribute Y, but putting them both in at the same time will be deemed to contribute (say) 120% of X + Y.

These rules were introduced, the civil servant explained, because the previous versions of the obligation had failed to deliver what the (all-seeing, all-knowing) government had intended, and had produced unintended consequences (such as the stocking of many people's cupboards with free lightbulbs). With this new, more complex version, they believe it will be sufficiently well micro-managed that unintended consequences will be minimized. And what sort of cynic, indeed, would suggest that there is just a hint of a possibility of perverse outcomes in such a scheme?

At the end of the presentation, the Chief Executive of Regen SW (the "sustainability" arm of the Regional Development Agency) invited questions. Not any old questions, though, such as those areas that the audience might have decided for themselves were of concern. The audience clearly were not capable of identifying the key points. So he set out the two areas that he thought might be open to question (woolly issues regarding the relationship between the "community", i.e. local authorities and voluntary bodies, and the VILE companies in the implementation of this scheme), and invited questions on those topics. Only with a couple of minutes to go before the next session did he allow people to ask their own questions.

Despite this effort at control, one of the participants managed to question what value there was in encouraging improved insulation (which is covered by the mechanism) if doors and windows (which are not covered) were not also to be improved (analogous in its effectiveness to fixing one of three leaks in a boat). The civil servant explained patiently, to what he obviously regarded as a rather ignorant question, that doors and windows were covered by Building Regulations, and would therefore be improved anyway. The questioner raised the frivolous point that a homeowner could avoid the effect of Building Regs by the cunning expedient of not applying to modify his doors and windows, but the civil servant swatted this objection away. Clearly the questioner did not understand the system. Could he not see that black was white?

Following the main presentation (also utterly irrational, but that should be taken as read by now), we went on to group discussion sessions. Employees of Regen SW kept notes of the points and presented conclusions at the end. By the time I had finished with them, I believe that my group was broadly persuaded that the British approach was back-to-front and irrational: that instead of micro-management and price-suppression, we should use rational price signals (i.e. a carbon tax) and leave the rest to the market. You wouldn't know it from the quangocrats' summaries, though. These listed dozens of abortive suggestions for how the complexity could be increased to little or negative effect.

It was a perfect snapshot of the roles and relationship of the Government's bloated bureaucracy and the supportive superstructure of the quangocracy. They exist to reinforce and protect each other's delusions.

There is clearly only one solution: sack them and scrap them.