Procurement must improve after 'slam dunk fail'

1 December 2021

The UK government must improve procurement scrutiny following an “underperforming” energy scheme, according to MPs.

In a report the Public Accounts Committee (PAC) accused the Green Homes Grant Voucher scheme of “underperforming badly” and said the government should explain how it will improve the scrutiny of procurement bids.

The PAC said the Department for Business, Energy and Industrial Strategy (BEIS) initiative, which offered homeowners grants of up to £10,000 for energy efficiency improvements, said BEIS had appointed a contractor to implement it without properly understanding whether it could deliver. 

The scheme was implemented as an urgent response to the Covid-19 crisis, aiming to support jobs, and ran from September 2020 to March 2021. It was also part of the government’s plan to deliver net zero by 2050 by decarbonising home heating.

According to PAC, BEIS undertook a rapid procurement for a grant administrator to develop a digital voucher application system for the scheme, even though none of the bidders for the contract thought it was possible to fully implement a digital system in time for the launch.

The PAC said BEIS should set out how it would improve the technical scrutiny of bids during its procurements, to better assure the capability of suppliers and the practical feasibility of their proposals, particularly where a bidder is promising considerably more than others. 

The scheme’s IT platform had not been fully developed and tested and as a result the chosen grant administrator, ICF Consulting Services (ICF), struggled to implement the voucher application system, leading to greater amounts of manual processing being needed for applications, contributing to delays.

The report said: “Whereas other bidders thought fully implementing a system would take at least 15 weeks, ICF thought it could do it in six and a half weeks. It was unclear why the department did not challenge ICF further as to why it felt it could deliver substantially faster than the other bidders.”

The project upgraded only about 47,500 homes out of the 600,000 originally envisaged and accounted for just £314m of its original £1.5bn budget, of which £50m was administration costs.

Meg Hillier, PAC chair, said: “It cost the taxpayer £50 million just to administer the pointlessly rushed through Green Homes Grant scheme, which delivered a small fraction of its objectives, either in environmental benefits or the promised new jobs.

“We heard it can take 48 months – four years – to train the specialists required to implement key parts of a scheme that was dreamed up to be rolled out in 12 weeks. It was never going to work at this time, in this way, and that should have been blindingly obvious to the department. That it was not is a serious worry. I am afraid there is no escaping the conclusion that this scheme was a slam dunk fail.”

The National Audit Office produced a critical report on the scheme in September.

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