Select Committee on Environmental Audit Third Report


2. The Environmental Audit Committee is appointed to consider to what extent the policies and programmes of government departments and non-departmental public bodies contribute to environmental protection and sustainable development. In 1998, in its inquiry into the Greening Government Initiative,[1] the Committee learned that all departments had been reminded to address sustainable development in their reviews which made up the Government's Comprehensive Spending Review. The Committee reported its disappointment that this reminder was issued after the Review had started and departments had established the terms of reference for their reviews. However the Committee considered that the Comprehensive Spending Review, being a fundamental review of spending, was an excellent starting point for reorienting government towards a sustainable development agenda.[2] This report looks at the evidence of how far the Government took up this opportunity.

3. The Comprehensive Spending Review was launched on 24 July 1997 as a review "to allow the Government to bring public spending programmes into line with its priorities and objectives". It would be "truly comprehensive, embracing all items of public expenditure" and would be focussed on the long-term. The Review encompassed reviews by all government departments of their spending programmes and several cross­departmental reviews. Its conclusions were to form the basis for the Government's spending plans for the future.[3]

4. Modern Public Services for Britain, Investing in Reform[4], set out the results of the Comprehensive Spending Review and public spending plans for the three years 1999-2002. It set out three key new elements to the public expenditure process:

— firm three year public spending plans, involving separate limited current and capital budgets for each department and some cross­departmental budgets, with the provision that budgetholders could reinvest any money saved from within these budgets;

— a focus on the principle of "money for modernisation", with the requirement for departments to set and deliver against output and efficiency targets, to be set in new Public Service Agreements, which were published in December 1998;[5] and to produce Departmental Investment Strategies, which are expected to be completed in the Spring of 1999. Performance would be monitored by a Cabinet Committee, known as the Committee on Public Services and Public Expenditure (PSX);

— new central funds to be allocated on a competitive basis: the Capital Modernisation Fund which would provide for "additional innovative projects" and the Invest to Save Budget, to help develop projects which would deliver innovative services bringing together two or more public service bodies.

5. This report examines how far the Government pursued its commitment to environmental protection and sustainable development within the Comprehensive Spending Review and the Public Service Agreements. In particular it addresses:

 — the procedures employed to ensure that environmental and sustainable development considerations were taken into account in the Review;

 — progress in tackling subsidies which have a detrimental impact on the environment;

 — support for environmental programmes;

 — environmental appraisal of new spending proposals; and

 — the new public expenditure framework.

The report then sets out recommendations for the next Comprehensive Review of public expenditure which the Government expects to launch in 2000 to roll forward the spending limits for the three year period 2001 - 04.

6. The Committee received memoranda from HM Treasury on the Comprehensive Spending Review process, from the Department of the Environment, Transport and the Regions on its role in the overall Review and its own review of its housing activities, and from two other departments, the Ministry for Agriculture, Fisheries and Food and the Department for Education and Employment, to provide further examples of how the reviews were carried out in practice. The Committee also received memoranda from the Council for the Protection of Rural England, the Council for the National Parks, Friends of the Earth, the Royal Society for the Protection of Birds, and the Woodland Trust providing their views of the Review and its results. A full list of memoranda received is published at the end of this report. The Committee completed its inquiry by taking oral evidence from the then Chief Secretary to the Treasury, Rt Hon Stephen Byers MP. His evidence is published on pages 7 to 21.

7. We are grateful to everyone who provided written or oral evidence to our inquiry and to Mr Derek Osborn, CB, Chairman of the European Environment Agency, for his advice.

1   Environmental Audit Committee, Second Report 1997-98, HC 517  Back

2   Op. Cit. paragraphs 77 & 78 Back

3   HMTreasury News Release 89/97 Back

4   Modern Public Services for Britain, Investing in reform Cm 4011 Back

5   Public Services for the future: modernisation, reform, accountability Cm 4181 Back

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Prepared 16 February 1999