Select Committee on Environmental Audit Minutes of Evidence



Examination of witnesses (Questions 60 - 79)

WEDNESDAY 9 DECEMBER 1998

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

  60.  Can or must?
  (Mr Byers)  That they take them into account.

  61.  That they must take them into account?
  (Mr Byers)  They must operate within the guidelines laid down in the Green Book. That is their responsibility.

Joan Walley

  62.  If I could follow that up, often in order to make savings in the long term and get best value for money on environmental grounds as well there is a need for a transitional period where there are additional costs which arise out of that environmental long-term sustainable agenda. How are you able to include that in your assessment of what is going through to individual departments at the time the spending decisions are being made?
  (Mr Byers)  The Treasury is prepared to support projects which cost money in the short term if there is a longer term saving.

  63.  There cannot be additional money in the short term?
  (Mr Byers)  Within the Comprehensive Spending Review the monies have now been allocated and departments will have to operate within the allocations which have been made to them and there will be no extra money allocated to individual departments during the three years of the Comprehensive Spending Review. Within that if a department for example can achieve savings because of the way in which they allocate resources then the Treasury has agreed, and this is a new development for the Treasury, whether those savings come from adopting environmentally friendly policies (thus savings on the revenue side) or because they have achieved greater efficiency, then all of that money saved by the department will be retained within the department and not a penny of it will be clawed back by the Treasury because then there is a real incentive on individual departments to maximise the savings if at all possible.

  64.  When the Treasury is looking at whether or not savings have or have not been made, is it looking strictly at the financial definition of what has been saved or is it looking at the wider objectives which for example the DETR announced several weeks ago about environmental practice? You could have a spending department that was saving money which in the long term has been harmful to the environment and not on the sustainability agenda.
  (Mr Byers)  It is now for individual departments within the money they have been allocated from the Comprehensive Spending Review to determine their priorities in the light of the public service agreements which will be published and have been agreed with those departments.

  65.  Really it is about how best value is defined and whether or not this environmental definition is included in that best value assessment?
  (Mr Byers)  That is clearly an element to it and the view that I take very strongly, and it is the view of the Treasury, is that after the Comprehensive Spending Review White Paper has been published and now we have agreed individual public service agreements it is very much the responsibility of the individual departments to deliver on this particular agenda and on other proposals as well. That is where the responsibility lies.

Chairman

  66.  In one of your answers just now you referred to some sort of central guidance on what is environmentally significant. I was wondering what you had in mind other than the Deputy Prime Minister's letter?
  (Mr Byers)  Appraisal guidance has been given to departments by the DETR to help them take account of environmental effects where significant.

  67.  That is what you are referring to?
  (Mr Byers)  Yes.

Mr Loughton

  68.  Minister, you will forgive us for being a bit cynical but I think we are going round in circles in this discussion. I have noted very carefully the phrases you have used like "having dialogue with individual departments", "forefront of people's minds", "environmental considerations", and perhaps acknowledging just now "environment is clearly an element to it." There is nothing concrete there. There is nothing in black and white. You must forgive us for getting the impression that in the Education Department CSR How you are going to spend your money? there might be Item 1: what money do we need to reduce class sizes? Item 2: how are we going to improve exam passes. Any other business: how do we make this environmentally friendly? and it is latched on to the end. As an example of that we asked the DETR, MAFF and DfEE explicitly to identify environmental appraisals which have been undertaken as part of the CSR process and copy them to this committee. We have received none although MAFF did make some mention of hill livestock considerations and flood defence programmes. Is it a misunderstanding by us of the whole process for us to expect the application of policy appraisal on the environment to result in identifiable environmental appraisals on spending programmes where environmental impacts can be judged to be significant or are we wasting our time?
  (Mr Byers)  Of course it might be the case that those departments have judged that they did not have any significant environmental impacts.

  69.  How will we know that?
  (Mr Byers)  That is a question you are going to need to put to those departments. I do not think it is going round in circles, it may be there is a disagreement about the role of the Treasury here, but I think the key issue has got to be whether individual departments take responsibility for this particular area of work or whether people expect it to be imposed upon them by the Treasury. I happen to take the view and the Treasury takes the view that it is far better for individual departments to take that responsibility because in practice bearing in mind that individual departments themselves will often be working with other organisations and other bodies, whether they be schools, hospital trusts or health authorities, it will be for that department to monitor and evaluate the progress which is being made by those other organisations. It will not be the Treasury that is able to do that.

  70.  We are 19 months on now. The purpose of this Committee, the thing we were most concerned with at the beginning is that we have a government who wants to put environment at the heart of policy making, fine, we all agree with that, but what we want to be able to put in place is a way of bench-marking and auditing and assessing whether that can happen. What you have just said is there is no big policeman with an overview on it. Despite what your colleague the Financial Secretary to the Treasury said about environmental concern being at the heart of taxation policy (which is where the majority of money for your spending reviews comes from) the Treasury is not taking on that role and you said just now that it is up to individual departments if they choose to bother with it. I thought that self-regulation was an outdated concept particularly in many of the things that the Treasury itself is doing. Who is responsible? If it is not the Treasury with its big stick of "he who pays the piper calls the tune" where is it actually happening?
  (Mr Byers)  That is a desperately old-fashioned view of government. We have moved on from that I am pleased to say. The Treasury is not there with a big stick. The Treasury is there to support and be assertive where it needs to be but also to get departments to recognise that they have responsibilities of their own and in fact the Comprehensive Spending Review is an excellent example of that because individual department have been given over a three-year period responsibility for working within that financial envelope and in reality the way in which we will get the issues this Committee is concerned about to be addressed effectively by departments and the organisations that they have responsibility for is if we get those departments to treat this issue seriously. I believe that they do. If anybody is the policeman it is going to have to be those individual departments. For example, in education who is going to deal with the individual local education authorities or the 24,000 schools? It is not going to be the Treasury; it is actually going to be the Department of Education and Employment. As far as hospitals are concerned, it is the Department of Health that has that relationship, not the Treasury. I think we are getting to a situation where we are devolving responsibility to individual departments. It is far better that they take responsibility for the particular issues that this Committee is concerned about. We may disagree on that but I think that is far better practical way.

Mr Grieve

  71.  I am interested in the example you have taken and that is why I was going to come to it, particularly with your experience, Minister, in the Education Department. There is a problem here, is there not? Let's just look at the PSAs. There is a government strategy about the climate change programme and about the contributions that can be made to it within government departments because government departments do generate a lot of energy or maybe hot air. I am not sure that hot air is the right expression but at least they are energy users. If I understand correctly, getting down to the particular PSAs, the targets and the question of whether they are meeting those targets will be entirely for those departments themselves. I know we were set up as a "terrier to bite the government's heels" to use the Deputy Prime Minister's expression, but is it really going to be left entirely to us to do that monitoring as to whether or not those targets are met and is there going to be no central government organisation to monitor it?
  (Mr Byers)  As far as the performance targets that are produced in the public service agreements are concerned, it will be the PSX Committee which will be responsible for monitoring and evaluating progress against those targets in the public service agreements and when the White Paper is published we will disclose there that we intend to report on an annual basis on the progress being made towards achieving those targets and report to Parliament on that, but I am sure there will be other organisations, and it may well be that this Committee will play a role here, who will also want to take departments through their public service agreements to see what progress they are making as far as environmental matters are concerned. Over and above the public service agreement there will be other work going on in departments which will affect the interests of this Committee as well and those issues need to be addressed because it may well be the case and in fact there are some targets which will be of specific interest to the Committee but there will be other areas of work which are not addressed in the public service agreements which you will still have an interest in.

Joan Walley

  72.  Can I follow that up. If you have got the new PSX Committee which is going to be measuring and monitoring how agreements for each department are being met, how is that new committee which does not have the Deputy Prime Minister actually on it, going to square with the ENV Cabinet Committee which has got the remit to actually address environmental issues. Really my question is we have got these two committees now which still do not seem to be integrated with each other. If we are going to be successful in getting green issues at the heart of all government decisions, either spending decisions or decisions about taxation and so on and so forth, does there not need to be some mechanism at a formal level at the very heart of government, deep down somewhere inside government, to link those two together and how are we going to arrive before the second Comprehensive Review comes on board at the means of being able to deliver on that commitment which the Government has made?
  (Mr Byers)  The PSX Committee will look specifically at the proposals contained within the public service agreement and that will be the remit of that particular body, but I would make the point that we do talk to each other and the Cabinet does meet and there is an opportunity for issues to be raised across the whole of government. I think as far as the committee structure is concerned I do not see that there has to be a conflict between the responsibilities of the two. They should complement each other and provided there is communication and dialogue between the two Cabinet committees I think we can work productively together in different directions but not in conflict with each other.

Mr Baker

  73.  Will the public service agreements for each department taken as a whole within each department require the programme set out therein to be environmentally neutral or beneficial?
  (Mr Byers)  There is no such requirement.

  74.  There is no such requirement? Are there any requirements at all in the public service agreements relating to integrating the environment other than ones that clearly have environmental implications directly such as energy efficiency?
  (Mr Byers)  As I said earlier, I think members will find when public service agreements are published in the near future that we have got to a situation where a significant number of departments are now including within their aims and objectives sustainable development and I think that is a step forward. I cannot go into details because it would be a discourtesy to the House at this stage about what will be in individual departments' PSAs but I can say that there is now an increased number of departments which have revised their aims and objectives to reflect sustainable development.

  75.  But you will be monitoring the financial outcome of the PSAs for each department? If they overshoot you will know about that?
  (Mr Byers)  It is a separate exercise to do with the financial audit of the Comprehensive Spending Review. Public service agreements are significant because for the first time individual departments will be saying publicly what they intend to deliver in terms of improved standards and a better quality service for the additional money so we will be monitoring the performance in terms of what is achieved against the money which has been allocated.

  76.  You mentioned that there is a separate financial audit but there is no environmental audit?
  (Mr Byers)  Not by the Treasury.

  77.  Or by anybody except this Committee.
  (Mr Byers)  That is a good reason for this Committee being set up.

Mr Thomas

  78.  Could I look at the issue of the timescale of the CSR in the context of the preparation of the sustainable development strategy. If that strategy identifies that more resources are needed bearing in mind that each department has already set its financial plans in process, what procedure is going to be used to identify the additional resources necessary?
  (Mr Byers)  The consequence of the Comprehensive Spending Review is that each department and indeed each agency like the Forestry Commission has now had its budget allocated for a three-year period and they have to operate within the budget which has been allocated to them. They can reorder their priorities within the three-year period but there will be no additional resources provided by the Treasury. This is the new regime of the Comprehensive Spending Review. They will not be able to, for example, make a claim on the reserves because they have hit something they need to address. They will need to accommodate any new pressures or reorder priorities within the financial envelope which has been allocated to them as part of the CSR process.

  79.  With hindsight therefore do you think it is unfortunate that the CSR has taken place before the sustainable development strategy has been prepared?
  (Mr Byers)  I do not because the CSR was a key part of the pledge that we made in the run-up to the last general election where we said that for two years we would operate within the previous government's overall spending totals. We have done that and that finishes in April of next year and the CSR three-year period provides us with the opportunity to demonstrate how we can reorder our priorities to reflect the people's priorities in areas like schools and hospitals. That is what the CSR does and the reason for the timing was very clear—to meet a very clear manifesto pledge that we made. We had to do that because we do believe in meeting those budgets.


 
previous page contents next page

House of Commons home page Parliament home page House of Lords home page search page enquiries

© Parliamentary copyright 1999
Prepared 16 February 1999