‘Ministers don’t have a clue’ says Steve McCabe MP following damning National Audit Office report on Smart Meters Programme

Steve McCabe MP has slammed the Government’s failing smart meters programme as a damning report from the National Audit Office published today shows the Government won’t meet its target of installing smart meters in every home by 2020, the cost of the programme is spiralling out of control putting up household energy bills, and ministers have no way of knowing whether any forecast industry savings will ever be passed on to the consumer.

Steve McCabe, who sat on the Bill Committee for the Smart Meters Act, has repeatedly raised concerns about delays to the roll out, technical problems with the programme and the ever increasing costs which are being passed on to the customer but the Government has responded by burying its head in the sand.


He tabled amendments to the Smart Meters Bill earlier this year to require the government to commission an independent review of the costs of the programme and to include the charge per household on energy bills so that customers can easily see what it is costing them but the Government claimed the amendments were unnecessary.


Key points from the NAO Report:

  • The government’s original ambition of installing smart meters1 in every home by 2020 will not be met
  • The costs of the programme have increased by at least £0.5 billion since the Department for Business, Energy and Industrial Strategy’s last forecast and could increase further
  • It is unclear whether industry cost savings forecast by the Department will materialise and the Department has no way of monitoring whether any cost savings are actually passed on to the consumer


The National Audit Office Report confirms an earlier report by the consumer organisation Which that claimed large suppliers would need to install 30 smart meters per minute, every day for the next 2 years in order to meet Government targets. There have also been reports of companies trying to pressure customers into accepting smart meters by telling them it’s compulsory rather than voluntary and many of the first generation smart meters don’t work once a customer changes supplier.


The Department for Business, Energy and Industrial Strategy forecast in 2013 and 2016 that the programme would require £11 billion of investment in installations, equipment and systems. These costs are met by energy companies rather than the Government, then recovered through a charge imposed on energy bills. The NAO have revealed that the costs of the programme have increased by at least £0.5 billion and since the consumer pays, that means higher bills.  


The costs are equivalent to £374 per dual fuel household. The Government says this will be offset by reduced energy consumption and operational cost savings for the industry but the rising costs of the programme have actually added at least £17 to average household bills.


Shockingly, the NAO reports that Ministers have no way of monitoring whether any industry cost savings, if ever realised, will be passed on to customers. The Treasury has not reviewed the programme since 2012.


Steve McCabe MP said:


“This is a Government inflicted disaster which will cost households up and down the country. The whole point of the smart meters programme is to save people money on their energy bills but Ministers are unable to contain the cost of the programme and have literally no way of knowing if any savings are passed on to customers. What we do know is that the ever increasing costs are being directly passed to households. I have been warning the Government about the failings of this programme for over a year but they continue to bury their head in the sand. Earlier this week the Energy Minister said in response to a question from me that the programme was going very well. I wonder what she thinks bad looks like.”


“Ministers need to get a grip and find out why costs are rising so dramatically and why something they claimed would save consumers money is putting extra pressure on household bills.”


Read the full report here https://www.nao.org.uk/report/rolling-out-smart-meters/


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Steve McCabe

Steve McCabe is the Labour MP for Birmingham, Selly Oak, and has been an MP continuously since 1 May 1997.

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