The Demise of DECC: Some thoughts on moving the furniture.
15th July 2016

Goodbye, DECC. I’ve known you for eight years. In that time, you created a world-leading system of national carbon budgeting, and oversaw an impressive growth of renewable energy. It wasn’t always easy – you were a minnow in the Whitehall ocean, and the site of many a pitched battle during the Coalition years. But you fought hard to demonstrate the benefits of a low-carbon transition for the UK.

And now, minnow that you were, you’ve been gobbled up by a bigger fish: the Department for Business, Energy and Industrial Strategy.

So, once we’ve decided how to pronounce the acronym BEIS, what are the prospects for climate and energy? Here are seven things to bear in mind as we watch the removals vans reversing.

1) With few exceptions, restructures are driven by egos, not evidence. We can endlessly speculate about the reasoning, but political expediency was the main driver. The UK’s tradition of chopping up departments at a moment’s notice, to achieve the required political balance round the Cabinet table, is really quite reckless. What other major changes to government would be done by with absolutely no preparation, evidence-gathering or consultation?

2) Names matter. Losing ‘climate’ from the Department’s title is a symbolic downgrading. Names matter to other politicians, whose status antennae are finely tuned. And they matter to stakeholders, like the renewables and cleantech sectors, who are already feeling bruised, and will now worry that they don’t have a champion in government. But names might not matter quite so much if other things work out:

3) Power is everything. DECC’s big problem was that it was responsible for meeting carbon targets, but the main sources of those carbon emissions (transport, industry, land use) were elsewhere. As a small Department, it had very little influence over energy demand. BEIS now has direct control of industrial strategy, which is an opportunity to drive low-carbon growth. And as a bigger department, it may have more clout in fighting those battles round the Cabinet table. Which makes leadership all the more important:

4) It’s all down to you, Greg. Despair would have been deep if the wrong person had been appointed to set the direction of the new Department. But Greg Clark’s record on energy and climate (as documented in this useful account by CarbonBrief) is good. Like all politicians, he will need to pick his fights; the Carbon Plan to be launched in the Autumn will be the first test of his mettle round the Cabinet table.

5) Joint working is harder than it looks. In newly formed Departments, different units keep their own identity, and creating a shared culture is difficult. As Ed Miliband has candidly admitted, when DECC was formed “the people who’d worked in energy thought that the people who were from the environment department were a bunch of muesli-eating sandal-wearers, and the people who’d come from the environment part of the department thought the energy people were a bunch of petrol-headed technocrats.” So again, the role of the Secretary of State in setting the agenda for the Department is crucial.

 6) Don’t underestimate the disruption. New Departments tend to turn inward, with staff restructures, office moves, pay negotiations and communications challenges all reducing the ability of officials to get on with the job in hand. This may sound trivial, but it isn’t. The Institute for Government estimates that costs of a merger are around £15 million – money that isn’t there. (Their 2010 report on making and breaking Whitehall Departments is a sobering read.) Combined with the administrative challenges of extricating ourselves from the European Union, the burden on civil servants will be huge.

7) And finally: the Treasury’s always in charge, anyway. The big story of DECC’s final years was the Treasury’s iron grip on energy, whether or not public money was being spent. The Levy Control Framework, established in the Coalition years, was essentially a Treasury coup, wresting control of renewables policy from a Department it believed had gone native. BEIS’ relationship with the Treasury will be a big influence in its success or failure.

We have an international agreement on climate change, and a strong national framework, in the form of the Climate Change Act and carbon budgets. But our record on implementation is ambivalent at best. We’ll be watching you, BEIS.

About author

Rebecca Willis

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