Select Committee on Environmental Audit Third Report

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.[40]

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 sites.[41] 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.[42]

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.[43] 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 energy efficiency.[44] In the Further Education sector the Funding Council has included energy efficiency in its criteria for assessing capital projects.[45]

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 Funding Councils.[46] 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 environment.[47] 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.[48] 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.[49] However, we remain concerned regarding the validity of such discussions given the lack of formal environmental appraisal by the departments concerned.

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.[50] The Treasury confirmed that the plans set out in the Comprehensive Spending Review represented agreed government policy.[51] 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.[52] 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.[53] 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.[54] 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,[55] 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 regard.

40   Ev pp 4 & 5 Back

41   Ev p32 Back

42   Policy Appraisal and the Environment, Policy guidance DETR. 1998 Back

43   Ev p32 Back

44   Ev pp 35&36 Back

45   Ev p32 Back

46   Ev p32 Back

47   Ev pp 28&29  Back

48   Ev p26 Back

49   Ev p4 Back

50   Government Accounting, Chapter 2 Back

51   Ev p5  Back

52   Q44 Back

53   Ev p26 Back

54   Ev p29 Back

55   DETR. Policy Appraisal and the Environment - Policy Guidance, March 1998 Back

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