Select Committee on Environmental Audit Third Report

Taking the environment and sustainable development into account in the Review

8. The Committee's concern in considering the process for the Comprehensive Spending Review stemmed partly from its awareness that the Review was being carried out prior to the completion by the Department of the Environment, Transport and the Regions of the Government's Sustainable Development Strategy and its awareness of the "bolt-on" nature of the reminder to departments to consider this angle in their reviews.[6]

9. The Committee found that the Comprehensive Spending Review report did not give the impression that the environment had been considered at the heart of the decision­making on public expenditure nor did it highlight the Government's policy commitment to sustainable development. In the summary and overview the only related references were to the Government's key objective to increase sustainable growth and to the integrated transport strategy's contribution to the Government's strategy for promoting sustainable development. Further explanation of the Government's commitment to ensuring that growth is environmentally sustainable was not given until a small box in the supporting chapter.[7] The Chief Secretary to the Treasury considered that what was important was not whether there were a few warm words in the White Paper but whether sustainable development was taken into account.[8] And he expressed his confidence that it had been.[9]

10. The Chief Secretary stressed that the Review should be seen as part of the umbrella of policies determined by the Government as a whole and within the context of the Government's other policies and priorities within which sustainable development is seen as a priority.[10] He noted that the timing of the Comprehensive Spending Review was determined by the need to fulfil the Government's manifesto pledge to operate within the previous Government's overall spending totals and then to reorder priorities for the remainder of the Parliament.[11] He added that the Sustainable Development Strategy would be published early in 1999 and that the Government needed to get this Strategy right, to ensure that it had the broad support of the people concerned.[12]

11. The Treasury confirmed that other than the reminder, which was from the Deputy Prime Minister to his Cabinet colleagues, there had been no new guidance to departments on taking sustainable development into account in the Review. Departments were expected to follow existing guidance on the assessment of the environmental impacts of spending and other policy proposals.[13]

12. The Chief Secretary further underlined the point that it had been up to departments to build sustainable development into the programmes they put forward. He did not accept that the Treasury should have a policeman's function in this. He considered the Treasury's role was to support and be assertive where it needed to be but to get departments to recognise their own responsibilities.[14] In his view the better, and indeed the only, way that sustainable development would be at the heart of individual departments' work was if they felt they had ownership of it and it was not being imposed on them from above, with the Treasury wielding a big stick.[15] He pointed to the importance of departments themselves having the proper mechanisms in place for evaluation and monitoring, citing particularly the examples of schools, hospital trusts and health authorities where it was for the department to monitor progress and it was inappropriate for the Treasury to do so.[16]

13. In response to the Committee, the Chief Secretary also distinguished between the Treasury's role with respect to financial matters where, although there is financial derogation, the Treasury does have a supervisory role and departments have to come to Treasury if there is a need for additional expenditure; and environmental issues, where he saw the Treasury's role as engaging them in the debate and holding them to account for the decisions taken.[17] He added that in the context of promoting value for money and best value there was also a responsibility on the Treasury to show how that could be done in a way that is environmentally friendly and supportive.[18]

14. We also explored whether the Department of the Environment, Transport and the Regions had had a special role in ensuring that the Review was appropriately used as an opportunity to reorientate government spending towards more sustainable development and found that they had not. They told us that they had worked closely with other departments on cross-cutting reviews, for example with the Ministry of Agriculture Fisheries and Food on the countryside and rural policy, and had kept in touch with other reviews in so far as they concerned services delivered by local authorities. But they confirmed that they had not routinely received detailed information on other aspects of other departments' reviews or spending plan proposals during the Comprehensive Spending Review.[19] The Chief Secretary to the Treasury confirmed that in cases not formally involving the Department of the Environment, Transport and the Regions it would have been for the individual departments to identify whether the environment was an issue that should be discussed with them as well as the Treasury.[20]

15. There is no firm evidence as to whether departments instituted their own arrangements for ensuring and checking that environment and sustainable development issues were considered in their Comprehensive Spending Reviews. The Council for the Protection of Rural England's summaries of departments' answers to parliamentary questions on the subject showed that the Ministry of Defence said it had no such mechanism in place and eight other departments appeared to rely on having mentioned it in their terms of reference. Only the Scottish Office replied that its Green Minister had been asked to assist colleagues to ensure that sustainable development is properly reflected in all its reviews.[21]

16. We remain concerned that the Comprehensive Spending Review White Paper and the formal processes for preparing it did not put enough weight on the Government's commitment to sustainable development and identifying the environmental impacts of policies and implications for sustainable development. And we note the differences between the process involved in preparing the Comprehensive Spending Review and that for Cabinet policy papers which must identify significant costs and benefits to the environment and take account of views expressed by the Sustainable Development Unit in the Department of the Environment, Transport and the Regions before their submission to the Cabinet.[22]

17. We welcome the emphasis the Treasury rightly places on departments taking responsibility for their own affairs, but note also the Chief Secretary's descriptions of the limited role the Treasury have played. We have no reason to believe that departmental Ministers are not committed to the principle that to move towards sustainable development, all decisions need to be taken in the light of wide-ranging consideration of their immediate and long-term implications on the economy, social conditions and the environment. However we note that the discipline and methodologies for undertaking formal appraisals of environmental and social impacts of policies are not yet fully developed. We therefore believe that departments should have been provided with guidance and assistance; and they should not have been relied upon to take account of sustainable development with neither the Treasury nor the Department of the Environment, Transport and the Regions having a clear responsibility to check that they had done so. In particular we consider departments should have been required to report whether their policies had significant environmental implications and if so how they had been addressed as a basis for their discussions with the Treasury.

18. We would also stress the importance of fully reflecting the Government's commitment to sustainable development in the words of its key reports. We believe that to turn the ship of Government onto a sustainable course still requires some changes in hearts and minds and that the summarising of the proposed actions in published documents reinforces the message of the importance of the policy for those preparing the document as well as providing a better insight into government thinking for the reader of the document.

19. We accept the Chief Secretary's point that it is, of course, important to look beyond the rhetoric and the processes of the Comprehensive Spending Review.[23] In the remaining sections of this report we examine the evidence of sustainable development implications having been taken into account in practice.

6  Environmental Audit Committee Second Report Op. Cit., Re paragraphs 77 & 78 Back

7   Op.Cit. p25 Back

8   QQ4 to 6 & 25 to 27 Back

9   QQ2 & 26 Back

10   Q15 Back

11   Q79 Back

12   QQ80 & 81 Back

13   Ev p1, Treasury memorandum. Existing guidance is listed as the Treasury document "Economic Appraisal and Evaluation in Central Government" (revised 1997) and DETR's publication "Policy Appraisal and the Environment". Back

14   Q70 Back

15   QQ13 & 70 Back

16   QQ46 & 69 Back

17   Q49 Back

18   Q50 Back

19   Ev p 28  Back

20   Q53 Back

21   Ev p 43 Back

22   Cabinet Committee Business. A guide for Departments. November 1998 Back

23   Q4 Back

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Prepared 16 February 1999