The National Audit Office (NAO) has published its overview of the government approach to the environment, net zero and climate change. The NAO is the UK’s independent public spending watchdog and is responsible for scrutinising public spending for parliament.
This article highlights NAO’s findings from the audit regarding the government’s approach to environmental protection and its plans to deliver net zero.
The key findings from the NAO’s audit work on environmental protection include:
In December 2018 the government published Our Waste, Our Resources: A strategy for England. It set strategic long-term ambitions for reduce waste and make more efficient use of raw materials – key if it’s to decarbonise the waste sector. The NAO found, four years on, the Department for Environment, Food and Rural Affairs (Defra) was delivering on some projects and planning others, but it didn’t know what it needs to do to achieve its ambitions over the long term. The main reforms it had taken forward on collection and packaging had been delayed. A lack of clarity had made it hard for businesses and local authorities to prepare for the changes they will need to make.
Statutory biodiversity net gain (BNG) requires developers to leave habitats for wildlife in a measurably better state than they were before the development. Defra prioritised launching the policy, accepting some significant risks to its effectiveness. The NAO reports that for its market-led approach to work, Defra needs the market to scale up to meet demand, and for statutory biodiversity credits to deliver biodiversity when the market fails to do so. Local authorities manage many aspects of statutory BNG through the planning process, including ensuring compliance and enforcement. For now, there is doubt whether local authorities will be able to discharge these duties effectively.
The previous government set out its plan to reach net zero in the Net Zero Strategy (2021). In 2022, a High Court judgment required the previous government to set out in more detail how it aims to reach net zero, In 2023, the previous government published its Net Zero Growth Plan.
In May 2024, the High Court found that the previous government’s updated plan to meet carbon budget targets didn’t comply with certain duties under the Climate Change Act. The current government will publish a new report setting out its plans to meet carbon budget targets by 2025.
The NAO’s key findings on delivering net zero include:
Since 2002, the government has provided more than £20 billion of financial support for businesses and households using biomass for power and heat because of its potential to be a low-carbon alternative to fossil fuels. It’s relying on business, in combination with carbon capture, usage and storage (CCUS), to make a significant contribution to its net zero goals. The NAO reports that for biomass to fulfil this role the government needs to be confident that the industry is meeting high standards of sustainability.
The NAO found that current monitoring arrangements rely on a combination of information provided by generators, third party certification schemes and limited-assurance reports. The lack of an evaluation of how effective these arrangements have been means that, in the NAO’s view, the government cannot demonstrate that its current arrangements are adequate to give it confidence industry is meeting sustainability standards. The NAO notes that Ofgem and the Department for Energy Security & Net Zero (DESNZ) have recently commissioned reviews of the existing assurance process.
Decarbonising home heating represents one of the biggest challenges to achieving net zero. In October 2021, the previous government published its Heat and Buildings Strategy. The strategy made a range of commitments aimed at developing markets and consumer choices for heat pumps and heat networks, and stated the previous government’s ambition to end the installation of new fossil fuel boilers by 2025. The NAO’s findings include:
The Labour government has announced several new bills that are relevant to net zero. These include:
The government also announced it would pursue other policies that affect climate change mitigation and adaptation, including policies on home insulation, nature and biodiversity, land management, and the water sector.
For further information, please contact the business risk and regulation team.
We produce a range of insights and publications to help keep our clients up-to-date with legal and sector developments.
Sign up
