I know most readers of this blog will have come across the debate around performance and the difference between inputs, outputs and outcomes. For those that haven’t, a quick summary:-

Inputs are the resources you invest: money, staff time, equipment, legislation or policy effort. Outputs are the immediate products of those inputs: activities completed, homes upgraded, schemes launched, guidance issued. Outcomes are the real-world changes that result: lower bills, improved energy security, reduced emissions, better consumer behaviour.

The issue I have with many of Whitehall’s announcements is that they often measure inputs to judge success or otherwise. Let’s take the Boiler Upgrade Scheme (BUS) as an example. The target for success is how much of the budget allocated to the scheme is actually spent, i.e. the input. Officials do not set the number of heat pumps subsidised (the outputs) as their target, nor do they set carbon emission reductions (outcomes) but judge themselves on whether they have been able to spend all they could.

Recent changes to the scheme just illustrate the problem. To make a heat pump’s running costs economically viable, the BUS can now include extra subsidies for solar PV and batteries. This will make it easier to spend their budget allocation, without even increasing the outputs, let alone outcomes. The Whitehall mandarins, keen to spend their resource allocation to show the Treasury how important it is that their budgets are kept intact, are missing the central purpose of their policy objectives. Greater focus on outcomes might be uncomfortable for them but setting a target to spend money on subsidies is frankly a recipe for disaster. You end up with a Boiler Upgrade Scheme subsidising self-builders to install a heat pump where there is no boiler to replace or paying well-off households to lower their energy bills because they can afford to chip in a few grand to pay for all the new kit the government buys for them.