The Carbon Trust has confirmed it is facing a cut to its government funding of around 40 per cent, resulting in 35 redundancies and raising the prospect of a major overhaul to the business advisory body.
In a statement released on Friday, Carbon Trust chief executive Tom Delay announced the government-backed company would receive around £50m from the government for 2011-12, a cut of around 40 per cent compared to this financial year.
Delay said the company would continue to provide support to the low-carbon economy and would now seek to generate higher levels of funding from the private sector to help cover the funding shortfall.
"Constrained public funding and expanding investment from the private sector into the low-carbon economy means the Carbon Trust is also changing and developing to maximise our impact and deliver at scale on our mission," he said. "At the heart of this change will be a significant increase in our engagement with the private sector that will enable us to play an even more influential role over the next ten years of our development."
However, a spokesman for the Carbon Trust confirmed that it anticipates 35 redundancies from its current headcount of 216 staff.
The announcement follows confirmation in last year's Comprehensive Spending Review that the Carbon Trust budget would be subjected to review.
It remains to be seen how the organisation plans to raise funding from the private sector, but Delay insisted the company was "actively pursuing significant partnership opportunities" and would make a number of announcements in the coming weeks.
It is also uncertain whether the cut to central government funding will result in reduced services from the Carbon Trust.
There has been speculation that the Carbon Trust could be merged with the Energy Saving Trust, which similarly confirmed last month that it has had its funding for next year halved, or could be integrated with the proposed Green Investment Bank. However, it now appears that the organisation will, at least in the medium term, remain independent.
The Carbon Trust has become as a major player in the emerging low-carbon economy, providing funding and advice to a wide range of green business projects and operating schemes designed to promote sustainable business models such as its popular Carbon Trust standard, which last week secured its 500th member.