The troubled £2bn privatisation of the Green Investment Bank has already cost at least £1m of taxpayer money in consultancy fees, official documents have revealed.
Ministers have promised that the sale of the bank, which has invested in green projects from offshore windfarms to energy-saving street lights, will deliver value for taxpayers’ money. An announcement on the sale to Australian investment bank Macquarie was expected in January but has yet to materialise amid strong political opposition.
Now it has emerged in newly published documents that last September officials authorised £1m in consultancy fees for the sale.
Although the Department of Business, Energy and Industrial Strategy (BEIS) has not confirmed who the money was paid to, the government’s financial adviser for the deal is Bank of America Merrill Lynch. Its legal adviser is Herbert Smith Freehills.
MPs condemned what they called an unnecessary waste of public money. Caroline Lucas, co-leader of the Green party said: “It’s outrageous that the government has ploughed a million pounds of taxpayers’ money into consultancy for a privatisation that simply shouldn’t be happening in the first place.”
The total figure spent on the sale so far is likely to be higher, given the bidding process began last March. The £1m consultancy cost is included in a disclosure of BEIS’s “exceptions to spending controls for July – September 2016”.
Vince Cable, who launched the bank in 2012, said: “I’m sure they will justify it on the basis that they got competitive quotes for their consultants. It does seem rather a lot of money.”
But, he added: “I’m less concerned about the value of the money of the sale than actually stopping it taking place in conditions where the green purposes of the bank is lost. It’s the issues of policy and principle, rather than these consultant’s fees.”
The BEIS said: “As with any asset sale, government has engaged external advisers through a competitive process to provide us with access to additional expertise, in line with [National Audit Office] recommendations on best practice.”
Earlier this month, rival bidder Sustainable Development Capital (SDCL) launched a legal challenge against the government, claiming it had complied with its own bidding criteria. A high court hearing on the London-based investment fund’s application for a judicial review is due later in March.