20 December 2013: The Mayor today published for consultation his budget for the GLA group for 2014-15 (press release).
The budget document states that a “new look GLA business plan has been published which includes a set of key performance indicators (KPIs) covering all main Mayoral policy and programme activities to be delivered by the GLA.” It’s welcome to see that amongst the 10 “major GLA programmes supporting the Mayor’s ambitions” [p7] a key deliverable will be “retrofitting more of London’s homes and public workplaces, saving carbon and cutting bills” – referring to the RE:NEW and RE:FIT programmes respectively.
Page 14 of the document also states that:
“The Mayor is continuing to work towards improving London’s environment.
Energy supply and master planning is key to delivering sustainable development for London’s economy. Investment will continue through a Decentralised Energy programme to help bring decentralised energy projects to the market.”
At the same time however, it appears from the draft budget that the ‘Development, Enterprise & Environment’ Directorate is facing a massive reduction in its funding from the Mayor. No separate breakdown for the ‘Environment’ section is provided, but the data (table below) indicates that:
- The draft 2013/14 budget for this Directorate seems to be have massively overestimated – the current forecast outturn being 25% lower than predicted. It’s not clear however what is contributing to this huge underspend.
- The level of underspend must have contributed to a significantly reduced future budget for the department – from a forecasted £31.2m just over a year ago, down to £19.9m for the forthcoming year (a 36% reduction)
- And the 15/16 plan for the ‘Development, Enterprise & Environment’ Directorate is down to just £10.7m – a 66% reduction from the forecasted 13/14 budget
- The planned reduction in budget for this Directorate far exceeds all others, some of which – like the Mayor’s Office – will remain static over the three year period.
There’s unfortunately to detail whatsoever within the budget document on the specific environment-team spend, or of future funding going to individual programmes. No further information is provided on the KPIs for the 10 ‘key deliverables’ (as mentioned in para 1 above) – however – future RE:NEW and RE:FIT programme targets to 2016 were recently set out in the Mayor’s draft Housing Strategy. Additionally, an interesting exchange on the Mayor’s retrofit programme RE:NEW was recorded in a November 2013 evidence session on the draft budget to the London Assembly Budget & Performance Committee (see page 17 of transcript) – also copied below:
Darren Johnson (AM): Moving on to the Mayor’s environmental priorities, can you just outline, to start off with, how the budget is going to support delivery of those objectives?
Fiona Fletcher-Smith (Executive Director – Development, Enterprise and Environment): The draft budget is proposing that we carry on with the steady state in the environment sector, so we will continue to support the development of parks, the planting of trees and key environmental programmes about the reduction of CO2 emissions, both through David’s [Lunts] work on housing and property but also through decentralised energy and through the waste strategy.
Darren Johnson (AM): Looking at the delivery on targets so far for CO2 emissions, you have seriously underperformed in recent years. If funding for the energy efficiency and the energy supply programmes falls, is the situation simply going to get worse?
Fiona Fletcher-Smith (Executive Director – Development, Enterprise and Environment): Obviously, funding for – particularly, decentralised – energy is essential and we are working with European colleagues and we have a meeting with a European Investment Bank this week to seek to provide additional funding to go into this area. We do recognise we have a lot more work to do, but we also recognise that we need some funding to do that. We are getting very positive noises from our colleagues in the European team about the European Structural Funds strategy for 2014-2020, which should be available to help with these programmes.
Darren Johnson (AM): Are you looking at revising the targets in any way or are you still committed to delivering on those? I am just looking at the figures for, say, 2013/14 on home retrofit. Your target was a reduction of 29,416 tonnes and so far you have delivered 996 tonnes. That is some way off.
Fiona Fletcher-Smith (Executive Director – Development, Enterprise and Environment): Generally on the carbon targets, the Mayor is not moving away from the target he has set. Yes, it is difficult, but he is going to achieve it.
David Lunts (Executive Director of Housing and Land): On the RE:NEW programme for domestic retrofit, as I think we have perhaps discussed in other places, the way that we are looking to gear up and deliver a more efficient programme is to move away slightly from the individual property door-knocking exercises towards a much more strategic engagement with the major landlords. We are now working with London boroughs, the major housing associations and other landlords to gear that programme up. Whereas we have been able to retrofit just around 100,000 homes after the last four years, we think that with the move to a more strategic engagement we can increase that to about 230,000 homes over three years. It is a more efficient way to leverage our funding. It is also the case, as you know, that the new eco programme is more geared towards the kinds of retrofitting that that strategic engagement delivers, so sidewall insulation, [sic – should be external wall insulation] for instance, which is quite a difficult thing to deliver on individual properties but actually is quite possible if you are working on a block basis.
Darren Johnson (AM): Is that an admission that it was perhaps a mistake then, to go for the door-to-door approach on retrofit? Why the change in direction?
David Lunts (Executive Director of Housing and Land): I do not think it is an admission that it was wrong. What we have done is we have covered London pretty effectively and delivered some early wins because it is much more straightforward to launch a domestic retrofit programme on an individual home basis. That can be done very quickly. You can supply the kit – low-energy light bulbs, water-saving devices, insulation – very easily. To take your point, that becomes more difficult to continue and if we are going to get more bang for our buck, if you like, then operating through things like the Decent Homes Programme to add environmental retrofit to that, to work with the major landlords when they are undertaking major repairs and cyclical improvement work. That just means that we can do more with less, if you like.
Darren Johnson (AM): You are committed to delivering on these targets without revising the targets, even in spite of the difficulties?
David Lunts (Executive Director of Housing and Land): That is certainly the intention.
Darren Johnson (AM): Can I just ask about your KPIs and annual targets? The model used in the Climate Change Strategy sets out cumulative targets, so it is a bit difficult to be able to make direct comparisons. Could you send the Committee a note setting out how the KPI targets match up to the model in the Strategy so we can actually monitor like with like?
Fiona Fletcher-Smith (Executive Director – Development, Enterprise and Environment): Yes.