Select Committee on Environmental Audit Minutes of Evidence



Examination of witnesses (Questions 40 - 59)

WEDNESDAY 9 DECEMBER 1998

THE RT HON STEPHEN BYERS, MP and MS PATRICIA HEWITT, MP

  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.

Mrs Brinton

  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 then.
  (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.

Mr Grieve

  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 that input?
  (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 play.

Mr Dafis

  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 as well.

  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.

Mr Baker

  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 departments?
  (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—


 
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