Environmental appraisal of new spending proposals
28. The Comprehensive Spending Review showed no evidence
that environmental appraisals of the new spending plans and programmes
had been carried out and contained no overall assessment of its
impact on the environment. The Treasury told us that where environmental
implications were judged to be significant departments were expected
to be able to provide data to inform discussion. They said that
valuations of environmental costs and benefits were subject to
discussion and scrutiny.
29. We asked three selected departments whether they
had undertaken environmental appraisals of their proposals and
asked for copies of the reports of the results. None of the departments
supplied us with an environmental appraisal report, and we presume
this reflects the fact that they had not undertaken formal environmental
appraisals. The departments' explanations for how far they considered
environmental issues are set out below.
30. We asked the Department for Education and Employment
whether they had undertaken environmental appraisals of their
plans to increase capital spending on schools and for extra resources
for further and higher education infrastructure and expansion
in the number of places. They told us that in the Comprehensive
Spending Review none of their initial screenings of their policies
indicated they would have a significant impact and so no full
environmental appraisals had been carried out. This was despite
their response identifying policies where there were environmental
impacts for example energy efficiency and rationalisation
of further and higher education accommodation releasing brown-field
We consider these potential impacts are significant and should
have been appraised within the policy appraisal, given that different
policy options may create different incentives and results. In
fact the Department of the Environment, Transport and the Regions'
own guidance actually lists the building of new schools on
green-field sites as an example of a policy with
significant impacts which should be subject to an appraisal.
31. The Department for Education and Employment stressed
that delivery of spending programmes within their purview is principally
the responsibility of others and that their own responsibility
is limited to the issuing of guidance and to seeking to influence
the Further Education and Higher Education Funding Councils.
For schools the Department pointed to energy efficiency grants
for Local Education Authority schools; their architects' role
in scrutinising plans for building projects at other schools;
energy efficiency and environmental performance requirements for
grants for building projects under the New Deal for Schools; and
examples of public/private partnership projects which addressed
In the Further Education sector the Funding Council has included
energy efficiency in its criteria for assessing capital projects.
32. We welcome the signs that the Department are
proposing to build on this approach, for example by including
a reference to environmental issues in its grant letters to the
However we would urge the Department to go further and recognise
environmental issues within their responsibilities. They should
use policy appraisal to assess how their policies can best be
framed to maximise their impact: for example looking at whether
delegation will achieve the desired results or whether extra technical
assistance or capacity training should be provided, in particular
to schools, to help them to draw up appropriate plans; and whether
environmental requirements are being addressed appropriately in
specifications for Public Private Partnerships. And the Department
should set targets and monitor performance against them.
33. We asked the Ministry for Agriculture, Fisheries
and Food whether they had undertaken environmental appraisals
of their plans to provide payments for farmers to improve the
attractiveness of the countryside and for hill farming; for extra
capital funding for flood defence work and for a new fishing research
vessel. They told us that environmental appraisals as such had
not been undertaken. They said that understanding of the environmental
effects of farming had informed their discussions; environmental
impact is a consideration built into the grant-aid assessment
process for coastal defence projects; and that the new marine
research vessel was justified to support the Department's work
on the sustainability of fisheries and the protection of the marine
We were particularly surprised that the Ministry of Agriculture
Fisheries and Food had not undertaken appraisals of these policies.
Whilst we recognise that in all these cases environmental concerns
are well known to the Department, we consider there would still
be a benefit from reviewing and articulating the impacts of a
policy in order to prompt consideration of alternatives to achieve
greater environmental improvement or reduced environmental harm,
the setting of targets and the monitoring of actual impacts.
34. We asked the Department of the Environment, Transport
and the Regions whether they had undertaken environmental appraisals
of their plans to invest additional money in improving council
housing. They replied that no formal environmental appraisals
were undertaken. They said that the focus of their work had been
on social aspects and that impacts on the environment had been
considered in other reviews. The Department also said that as
far as possible their policy is to devolve responsibility for
investment decisions to local authorities, whilst issuing them
with guidance on best practice for example on energy efficiency.
The Department told us that their guidance on how authorities'
performance will be assessed by the Government Offices for the
Regions for the purpose of the annual approval of their Housing
Investment Programmes emphasises the importance of sustainability
and energy efficiency issues.
Once again we feel that this response misses the point of environmental
appraisal at the policy level, which is to see what impacts the
policy has and how best to address them, positive or negative.
35. We also asked the Treasury what consideration
had been given to the environment in relation to these departments'
policies. Their response was encouraging in the sense that it
did seem to indicate that some of the relevant matters had been
discussed - for example energy use in schools, hospitals and council
housing and the global environmental impact of further and higher
education in terms of the total number of students, teachers,
other workers, buildings and energy and other resources used.
However, we remain concerned regarding the validity of such discussions
given the lack of formal environmental appraisal by the departments
36. We understand that once approved at Cabinet level
and where it falls within the departments' delegation of authority,
expenditure requires no further Treasury approval, unless for
example it sets an expensive precedent or contains elements which
are novel and contentious.
The Treasury confirmed that the plans set out in the Comprehensive
Spending Review represented agreed government policy.
We therefore asked whether that meant that the policies in the
Review were now fixed and so would not be subject to further appraisal.
In reply the Chief Secretary pointed to the importance of the
Public Service Agreements, setting out how the extra resources
allocated to departments will be spent. He stated that in drawing
up these agreements departments would have been mindful of the
need for environmental appraisal and would refer to significant
environmental matters in them.
We note that these answers do not give a clear picture as to whether
departments will need to appraise further policies which were
set out in their Review settlement. The Review resulted in expenditure
limits representing new expenditure levels for existing programmes
and new funding for new policies. The Department of the Environment,
Transport and the Regions gave no indication that there would
be need for further appraisal of their housing expenditure.
By contrast the Ministry of Agriculture, Fisheries and Food's
memorandum stated that evaluation of new policy proposals will
include an appraisal of the environmental impact and that the
timing of such evaluations would depend on a variety of factors.
We would conclude from this that there are some policies referred
to in the Comprehensive Spending Review, perhaps particularly
those representing an increase in funding to existing programmes,
where there will be no further requirement for environmental appraisal,
but that others might be further appraised.
37. We consider that the Comprehensive Spending Review
should have involved formal environmental appraisals as set out
in the Government's own guidance,
because as a fundamental review of public expenditure the Review
amounted to a policy review of all areas. We base this on our
view that once a decision is taken to fund a programme the key
policy decision has been taken, and therefore the possibility
that there will subsequently be further appraisal, including environmental
appraisal, does not meet the need to consider these impacts fully
at the outset where they are significant.
38. Overall we have found that some consideration
has been given to environmental impacts in the Comprehensive Spending
Review. However, we have been disappointed by the answers to our
questions on the environmental appraisal of policies and we conclude
that the Government has not been meeting its commitments in this
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Government Accounting, Chapter 2 Back
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March 1998 Back