Examination of witnesses
(Questions 60 - 79)
WEDNESDAY 9 DECEMBER 1998
and MS PATRICIA
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.
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
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.
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.
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
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.
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
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.
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
(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
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.
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 clearto meet a very
clear manifesto pledge that we made. We had to do that because
we do believe in meeting those budgets.