Question

To ask the Secretary of State for Energy and Climate Change, what the reason is for the difference between the estimated cost of the Smart Metering Implementation Programme of £10.9 billion included in her Department's Third Annual Report on the roll-out of Smart Meters, December 2014 and the whole life costs of £19.25 billion included in the Major Project Authority's Portfolio data for her Department of June 2015.

The Annual Report on the roll-out of Smart Meters and the Major Project Authority’s report use the same underlying data, taken from the Programme’s Impact Assessment:

https://www.gov.uk/government/publications/smart-meter-roll-out-for-the-domestic-and-small-and-medium-non-domestic-sectors-gb-impact-assessment.

The difference between the estimated costs is due to the two reports using different methodologies to present the same cost information of the Programme.

The Annual Report on the roll-out of Smart Meters expresses information in real prices and present values. This follows Treasury guidance for policy appraisal and is aimed at providing future cost and benefit information in a way that is most meaningful for decision making.

The cost figures in the Major Project Authority’s report are expressed in nominal terms and are not discounted to present value terms. This is aimed at achieving comparability across Government projects but can result in different figures between Impact Assessments and the data reported by the Major Project Authority.