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Quangos should be burnt to fuel a green revolution, Tory report recommends

The new Government should conduct a bonfire of nine low-carbon quangos and instead hand them to a planned green investment bank if Britain is to fulfill its commitments to create a low-carbon economy and catch up with its European partners, a report yesterday urged.

The Green Investment Bank Commission also recommended the sale of "green ISAs and bonds" as a way of helping to provide financing for more renewable energy projects in the United Kingdom.

And it said the new bank should be commercially independent and thus not accountable to ministers or to Parliament for its investment or lending decisions. This would, it said, be "a prerequisite for building credibility with the markets. It also should limit direct public liabilities by placing GIB liabilities off the Government balance sheet."

The commission estimates that £550bn is needed for infrastructure and supply chains to allow the UK to meet climate change targets that call on the country to cut greenhouse gas emissions and boost renewable energy by 2020.

The scale of the investment required to meet UK climate change and renewable energy targets is unprecedented," it warned.

Headed by Yell's chairman, Bob Wigley, the Commission was set up by the Conservative Party while in opposition. It criticised what it described as a string of "ad hoc" initiatives and quangos that have been set up over the past decade and collectively spend £185m while providing funds of £2bn.

In that respect, the Commission agreed with last week's report from the Work Foundation, which was sharply critical of the way moves towards a low-carbon economy are being handled. It attacked what it described as a "tangle of red tape and bureaucracy" which it claimed was putting job creation in low-carbon industries at risk.

Mr Wigley said: "I believe our report has produced some radical and substantive policy recommendations and financing ideas.

"I was very much encouraged when the Prime Minister reiterated his commitment to a low-carbon economy in his speech the day after the recent general election and was further encouraged by the terms of the coalition agreement, containing as it did specific references to a green investment bank and a low-carbon economy."

Although the coalition document promised the creation of a green investment bank, and the pledge was reiterated in the Queen's speech, decisions on implementing the plan have been deferred until the public spending review later this year. The Treasury said the scheme would need to show value for money.

Global investment in clean energy was as much as $150bn last year, but the financial crisis has put many decisions on hold and caused a number of projects to be scrapped. Europe's sovereign debt crisis has only exacerbated the trend.

After a dip in electricity demand, utilities have also been weakened. And some business lobbies have cautioned against introducing tougher green support policies in the aftermath of the recession while the economic outlook remains uncertain in many parts of the world and confidence is still wafer thin.