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NAO reports published in May/June 2022

Author: ICAEW Insights

Published: 12 Jul 2022

The National Audit Office publishes a wide range of reports. Below is a selection that are especially topical and of interest to ICAEW members and the wider profession.

The energy supplier market, 22 June 2022: Since the energy market was opened to competition from the 1990s, domestic energy consumers have been free to choose their domestic energy supplier. The total number of domestic suppliers went from 12 in December 2010 to 23 in May 2022, with a peak of 70 suppliers in mid-2018. By September 2021, the new entrants held around 40% of the market share.

This report aims to set out the facts regarding the recent exit of energy suppliers and to evaluate Ofgem’s and the Department’s roles in the events leading to the exits and how well they handled them. It covers:

  • the nature and regulation of the energy supplier market (Part One);
  • how supplier exits have been handled and what they have cost (Part Two); and
  • the regulation of the energy supplier market and how this contributed to the exits (Part Three)

Tackling local breaches of air quality, 17 June 2022: The UK has legal air quality limits for major pollutants at a local and national level, covering pollution from ammonia, particulate matter, nitrogen oxides, non-methane volatile organic compounds, sulphur dioxide, and more. Most of these legal limits were met between 2010 and 2019, with the exception of the nitrogen dioxide (NO2) annual mean concentration limit, for which there have been long-standing breaches. 

Government published a Clean Air Strategy in January 2019 outlining its approach to air quality more broadly. Government expects to publish an update of its National Air Pollution Control Programme in September 2022 to set out the measures that will be required for the UK to meet its 2030 national emissions limits.

NO2 is only one source of air pollution, and there is particular concern about the health risks from particulate matter and ammonia. Government is not yet clear how it will meet existing 2030 ceiling limits, and expects to set new long-term targets for particulate matter by October 2022. It will need to move quickly with robust plans to meet these targets if it is to put itself in a good position to meet them and secure value for money from its work on air quality.

Measuring and reporting on public sector greenhouse gas emissions, 10 June 2022: In June 2019, Parliament passed an amendment to the Climate Change Act 2008 committing the UK to achieving ‘net zero’ greenhouse gas emissions (emissions) by 2050. This means reducing emissions substantially from current levels, with residual emissions in 2050 being equal to or less than what is removed from the atmosphere by either the natural environment or carbon capture technologies, such as tree planting or engineered removals. The government estimates that emissions from public sector buildings account for around 2% of total UK emissions.

This report examines the extent to which the government measures and reports public sector emissions in line with its ambition for the public sector to be a leader in decarbonising its activities. It examines:

  • the landscape of public sector emissions measurement and reporting (Part One);
  • the completeness of current measurement and reporting requirements for public sector bodies and progress in improving the transparency of reporting across central government (Part Two); and
  • whether government and public sector organisations are using emissions data to inform future planning (Part Three).

All public sector bodies need to understand the likely costs of delivering their decarbonisation targets so that they can effectively prioritise action and investment. And with better, more consistent data, central government departments could improve cost estimation and inform priorities for reducing emissions. This will require active leadership from the centre of government to strengthen its management of the measurement and reporting regime.

 Audit and Risk Assurance Committee effectiveness tool, 13 May 2022: Audit and Risk Assurance Committees (ARACs) play a crucial role in supporting the effective governance of central government departments, their agencies and arm’s-length bodies.

ARACs are operating in a highly challenging context. Government organisations are managing many short- and long-term risks and are required to be resilient to a number of pressures. This has created an environment where ARACs need to be dynamic and responsive to the changing risk profiles and demands of their organisations. ARACs can see this as an opportunity to work out how they can most proactively work with the Board and accounting officer.

Against this background, NAO’s effectiveness tool provides a way for ARACs to assess their effectiveness against more than just the basic requirements. It provides aspects of good practice to give ARACs greater confidence and the opportunity to meet the requirements of their role.

The effectiveness tool is a comprehensive way for ARACs in central government to assess their effectiveness on a regular basis.

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