Is abolishing DECC a nuclear option?

In many ways Osborne has already got rid of the Department for Energy and Climate Change (DECC) by gutting it of most of its responsibilities. As the article points out, two thirds of its budget now goes on nuclear decommissioning, but it doesn't have much left to spend the rest on. 

Over the summer Osborne pulled all responsibilities for housing and energy efficiency into the Treasury, whilst scrapping the Code for Sustainable Homes (the main policy driver for sustainability and the only driver for more energy efficient new homes beyond the Building Regulations), scrapping the Green Deal (not that it was any good but it is not being replaced), and severely restricting the Energy Companies Obligation (ECO), which is supposed to help fuel poor households. 

Responsibility for climate change is now perhaps best described as uncertain. Osborne clearly wants to pull it from DECC but at the only obvious place for DECC's role is to expand the remit of the Committee on Climate Change - but there he risks running into SNP troublemakers.

Any remaining responsibility for developing renewable energy is being completely undermined by the National Grid's determination to redevelop the grid for new nuclear - thereby also holding many proposed new Scottish wind farms to ransom, at least until Holyrood can gain control of its own devolved energy policy (Holyrood currently drives energy policy through planning).

Osborne wants nuclear so badly he shamelessly appointed a minister, Amber Rudd(erless), whose partner is a lobbyist for the industry, and what's left of DECC's responsibilities can be near-enough summed up with word - fracking.

Osborne should beware nuclear option over the DECC

In Whitehall parlance it is known as “mogging” — slamming together or scrapping departments to save cash. Speculation about machinery of government changes is set to reach a fever pitch this week as MPs debate a private member’s bill on the abolition of the Department of Energy and Climate Change.

The bill, introduced by the maverick Tory MP Peter Bone, is unlikely to pass — in its current form at least. Nevertheless, for the hundreds of civil servants at DECC, the debate will not be much fun because its dissolution remains a distinct possibility.

With George Osborne asking for departments to prepare for budget cuts of as much as 40 per cent, winding up one or two would help to ease the burden on those that are considered indispensable. Ministers are urgently running the rule over possible savings in advance of the chancellor’s autumn spending review on November 25.

DECC has always been an unwieldy beast, tossed together from bits of the Department for Environment, Food and Rural Affairs and the old DTI in a shake-up led by Gordon Brown in 2008.

It remains relatively small and could simply be broken up, with the energy policy parts rolled into the Department for Business, Innovation and Skills, the DTI’s successor, and climate policy folded back into Defra. After all, that is the structure that existed only seven years ago.

Best of all for Mr Osborne, unlike most other departments, DECC’s abolition would have no direct impact on public services. Outside Whitehall, few people would notice. Mr Osborne is not known for his sentimentality towards such changes, especially when the political risks are so low. His hunt for cost savings makes DECC a prime target.

However, there are risks here. Machinery of government changes can be blunt. The disruption can last for years, as experienced Whitehall mandarins get bogged down by the logistics and the need to forge relationships with new colleagues and permanent secretaries.

“If you want change fast then work with what you’ve got,” is the advice of one old Whitehall hand.

Although DECC’s £5.7 billion budget is not ringfenced and there is certainly scope for cuts, the potential is limited. Two thirds of that money is spent on nuclear decommissioning — the clean-up of toxic sites such as Sellafield, which present a significant threat to public safety. Wielding the axe too recklessly here would be dangerous and counterproductive in the long run.

The timing of the autumn spending review also poses a tricky challenge for Mr Osborne, coming only a week before the start of the UN climate policy conference in Paris.

Scrapping DECC then would hardly send an encouraging message on British leadership on the problem of climate change. Nor would it chime well with David Cameron’s dubious pledge to lead the “greenest government ever”.

It would also deal an extremely awkward hand to Amber Rudd, DECC’s well-respected secretary of state, who was appointed only six months ago. If Mr Osborne does choose to wind up DECC, he might wait until the new year to do so — but I certainly wouldn’t rule out his doing so before then.

Robin Pagnamenta is Energy Editor of The Times. Twitter@Robin_Pag