Examination of witnesses
(Questions 40 - 59)
WEDNESDAY 9 DECEMBER 1998
and MS PATRICIA
40. Do you think that the Green Ministers'
team is important from the Treasury's view?
(Mr Byers) I am sure it is.
41. Can you then explain why at the last
Green Ministers' meeting the Treasury virtually alone was represented
by an official and not by a Minister.
(Ms Hewitt) If I can respond to that. Unfortunately
I was out of the country, unable to attend. I was extremely sorry
that it was not possible for me to attend.
42. Would it not be better to send another
Minister rather than an official under those circumstances?
(Mr Byers) I do not know all of my colleagues'
diaries, I am afraid.
43. I would like to turn us on to the area
of the appraisal of spending proposals. Is it correct that you
have said that the spending plans, which have been approved in
the Comprehensive Spending Review, are now agreed Government policy?
(Mr Byers) Yes.
44. Following on from that, would I be correct
to say that these policies are now fixed and they are not going
to be appraised again and that if so far in the process they have
not had an environmental appraisal, then they are going to be
an appraisal-free zone and there is no imperative for them to
have an appraisal?
(Mr Byers) I think not because it is always worth
reminding ourselves that the publication of the White Paper in
July is not the end of the CSR process. By definition anything
that lasts over three years is not going to be decided effectively
nine months before when we have the publication of the White Paper
which is why the public service agreements which will show what
we will get for our money, to be blunt about it, in terms of how
the extra resources which have been allocated to individual departments
are to be spent, will be a very key set of documents. They will
be made public, as I say, in the near future in the form of a
White Paper so that people will be able to see very clearly the
extent to which the issues that this Committee has been concerned
about have been addressed by those individual departments and
also the Treasury because we will have our own public service
agreement and then the public and Committees like this will be
able to hold those individual departments to account.
45. Definitely? If they have not already
had an environmental appraisal we can take it from you that they
are going to have one and you will ensure that they will?
(Mr Byers) I think you will find that each department
in drawing up their public service agreements have been mindful
of that and where there are significant environmental matters
they will be referred to in the public service agreements.
46. Could I take you on to your own role
as policeman if you like. You have actually put on record that
you did not police individual departments' use of environmental
appraisal in the CSR process, you were not checking up on them
in that way and you state that the Treasury has not actually checked
that environmental appraisal has taken place in the project approval
process. Why is the policing of environmental appraisal not considered
to be a fundamental part of your own personal responsibility for
reviewing wider economic appraisal?
(Mr Byers) As I think I touched on earlier, we
have adopted a view that it is far better for individual departments
themselves to feel that they have prime responsibility, that they
have ownership of these matters and accordingly they will be the
ones with responsibility for the evaluation and monitoring of
those detailed areas.
47. Minister, are we not being terribly
trusting here and assuming that they will naturally do that and
that they are all such models of excellence? To take you back
a little bit, in a previous inquiry we looked at the role and
status of Green Ministers and actually found with the majority
of meetings, as my colleague mentioned beforehand, that they were
substituted for officials. This was not a one-off because of responsibilities
as your colleague has said, it was the norm. If they are behaving
like that in relation to one aspect of the environment, how can
we assume that they are going to be so good, so politically correct
and on message in other ways?
(Mr Byers) We have to change the climate as far
as these matters are concerned. I almost said change the environment!
48. Could I ask how you propose to do that
(Mr Byers) I think we are beginning to see it.
I do not think it will be done by Treasury diktat. It is going
to be convincing people that these are important issues that need
to be addressed. I am actually quite pleased with the way in which
the aims and objectives coming out of discussions we have had
with individual departments on the public service agreements now
show a growing number of departments recognising that for them
sustainable development should be within their aims and objectives
and that has been a process of debate and discussion with them
and that is better.
49. I find this discussion very interesting
because we were set up as an Environmental Audit Committee and
I think the implication behind it was that environmental audit
was taking a similar role to financial audit as being a key area
of government function which needs to be scrutinised by Parliament.
If you take out the word "environment" and substitute
the word "finance" from the comments you just made,
I do not think in a month of Sundays you would be coming before
the Audit Committee or any other committee to say that good housekeeping
would be internal by the departments themselves. This actually
goes to the heart of our anxiety, that here is an issue that is
apparently at the heart of the government's agenda for good reasons,
we are being told continuously especially by the Environment Minister
that the problem is a very serious one and needs to be addressed
at the heart of government and yet the systems which are being
set up actually suggest that the housekeeping and all the thrust
can be done departmentally with no central control. Central control
is not coming from the Deputy Prime Minister as far as we can
see. Where is control coming from? It is not being treated with
the seriousness which the Government in its initial statements
was implying it should be because I do not see how you can have
an auditing system, whether it is by this Committee, forget about
that, or by government, which does not have a single department
which is controlling it.
(Mr Byers) It is being taken seriously and I think
there is a distinction that can be drawn between the Treasury's
role in allocating finance to individual departments which is
what we do and the Treasury's possible role as being the monitor
across Whitehall in an environmental audit sense. As it happens,
in terms of financial derogation we do look to individual departments
to carry out the audit process within their own departments. Obviously
the Treasury has a supervisory role, if I can put it that way,
and we are also the body that departments have to come to if there
is a need for any additional spending. That is the role the Treasury
plays. I do think as far as the environmental issues are concerned
the prime responsibility has to rest with individual departments
and we have to engage them in the debate and hold them to account
for the decisions that they take and I think that is probably
a far more productive way of looking at these matters.
50. Do you think in a sense perhaps the
Treasury is not the best department to deal with this although
the fact that you are ultimately in control of finances does mean
historically and in practice this is the key department in this?
Do you think there should be some other subsidiary department
set up dealing with the environment other than the DETR to provide
(Mr Byers) I do not think that would be the best
way to go forward but I think there is a responsibility on the
Treasury in terms of our responsibilities in the context, for
example, of promoting value for money and best value to show how
that can be done in a way that is environmentally friendly and
supportive and I think that would be a proper role for the Treasury
to play. Certainly in some of the areas we have been looking at
we would be in a position to demonstrate best practice in the
context of the good work which is already going on in some parts
of government and some parts of local authorities, agencies and
indeed in the private sector as well, so that is a role we could
51. It is certainly the case that somebody
needs to take an overview of how the environment is integrated
into policy and of course the Treasury is the department that
decides on spending and spending has implications for the environment
obviously. The DETR figures in this, does it not? We were very
pleased actually in the Government's response to our report on
"greening government" to see that Cabinet guidance would
now entail DETR having a stronger position in relation to consultation
and that they ought to have the right to consult. We asked you
about any additional expertise that you drew upon to review the
sustainable development implications of departments' proposals
and in your response you said that "DETR staff were involved
in or saw papers for those other reviews whose environmental implications
were most significant." That sounds alright but then DETR
themselves say "it did not routinely receive detailed information
of other departments' reviews or spending plans" except where
it related to services provided by local authorities, so that
is a limited role. That makes us think that DETR were not really
in a position to identify policies being reviewed which had a
significant impact on the environment and therefore the ball was
entirely in the Treasury's court to ask about the costs and benefits
in environmental terms of spending plans. Would you agree that
that is the case then?
(Mr Byers) I understood that the Department of
Environment, Transport and the Regions was involved actually in
a far wider set of reviews than just those in relation to local
government. They were certainly involved closely in work done
by MAFF in terms of developing a rural policy and countryside
policy and also in discussions with the Department for Social
Security on housing matters where they may have an environmental
impact, so I think they were involved in a variety of other areas
52. But this is about spending plans. Spending
plans of course are subject to the approval of Treasury and if
the Treasury itself abrogates responsibility in a sense for considering
the environmental implications of spending plans and checking
on it and insisting that departments do it then obviously DETR
ought to be brought in in a far more proactive role. The DETR
actually say they did not routinely receive detailed information
on other departments' reviews or spending plans. Something needs
to be put right there, does it not, and if the Treasury is not
accepting responsibility for this there has to be a process in
DETR to make sure the environmental implications of spending plans
are thoroughly addressed, checked, monitored and followed up.
(Mr Byers) I think environmental impacts coming
out of the CSR were discussed with individual departments and
where they were significant then DETR were involved. It is true
to say across the whole of the CSR process they did not routinely
receive documents because many would not have been relevant to
the specific work or responsibilities of the DETR, but where they
were relevant then they would have been involved in discussions
arising from them. That would be the role it would play.
53. Who makes the decision about whether
a department's spending plans are significant and should be referred
to the DETR for consideration?
(Mr Byers) Guidance has been given by both the
DETR and the Treasury to individual departments about significant
environmental impacts that their proposals might bring up. It
was very much for the individual departments themselves to identify
whether this was an issue that should be discussed involving the
DETR as well as the Treasury.
54. Would you agree that there is a need
for clarification here and a need to ensure that somebody or other
at least takes a very very rigorous look at the environmental
implications of individual spending departments besides the individual
spending departments themselves in order to ensure that there
is integration and overview?
(Mr Byers) I wonder whether it is possible to
break it down into different programmes. For example, if there
is a programme which is specifically related to energy efficiency
for example, clearly if money is being allocated for that particular
purpose then there will need to be, and the Treasury will do this,
a monitoring against that particular application.
55. If I may say so, you are falling into
the trap of considering spending plans on those items that are
identifiable as environmental spending. The whole point is to
consider the environmental implications of spending in a whole
range of other areas which have enormous environmental implications.
(Mr Byers) I understand that. I was going to come
on to address that point because I think in terms of how we monitor
how individual departments are implementing those particular policies
it may be that there is no one monitoring system. It may be that
we need two systems, one of which is the Treasury monitoring those
areas where there is a specific financial allocation for a very
specific environmentally-friendly project or programme, and then
there may need to be another process looking at how individual
departments in the round are addressing these issues in a way
that is not then specifically linked to a programme that is environmentally-friendly
but which is built into the work that the department does as a
matter of course.
56. It is also a question of course of deciding
allocations as between departments and whether allocating more
to a particular department might be advantageous because it is
more likely to be sustainable rather than allocating it to another
department. That is something that only the Treasury can do.
(Mr Byers) It is and I think as we go through
the three-year CSR process, bearing in mind this is the first
time we have operated under this system, it may well be that when
we come to beginning the process of preparing CSR II which we
will begin to do in the year 2000, which is not too far away,
there will be a number of issues that we will need to reflect
upon in terms of how we reorder priorities because we will need
to update and reorder the priorities of government spending.
57. Can I follow up on that very interesting
point that Mr Dafis has raised just to be clear about how this
works. Let's say for example the Ministry of Defence wants to
get some new ships and it wants to use tropical hard wood or some
other content which might be regarded as environmentally unsustainable.
Who actually determines what happens in that particular case?
Is it left to the Ministry of Defence to say we will apply standards
and look after the environment ourselves and they simply put in
a bid to the Treasury and the Treasury evaluates the financial
bid or is it down to the Treasury to say we will evaluate the
environmental implications of that as well and yes it is going
to be more expensive if you use a different kind of wood and therefore
we will allow you more money or no you cannot have that and you
must use this wood? Down to the nitty-gritty of individual applications
how is it dealt with?
(Mr Byers) It will be the responsibility of the
individual department operating within the procurement guidelines
set down by government.
58. So the Treasury will have no role in
that other than determining the financial allocations between
(Mr Byers) And achieving value for money. That
would be the role we would play.
59. And value for money is as loose a term,
coming back to the question I asked earlier on, which has very
strict financial criteria and loose fluffy environmental bits
round the edge?
(Mr Byers) Those are words that you might choose
to use but the agreement makes it clear that they can take into
account those matters where it is not easy to put a financial