Select Committee on Environmental Audit Third Report


Memorandum from the Department of the Environment, Transport and the Regions

  1. This memorandum responds to the request for information from the Environmental Audit Committee. The Committee's questions and requests are repeated or summarised here in italics.


  Please summarise the main stages, outputs and decision processes involved in the Department's CSRs and how sustainable development implications were addressed. The Committee would also welcome DETR's view on the addressing of sustainable development issues in the CSR process as a whole.

  2. The Department's approach to the CSR followed the central guidance and timetable laid down by Treasury. Within this framework, early work concentrated on the structure the review should take and on drawing up terms of reference. Given the wide range of responsibilities within DETR's remit, it was decided that efforts needed to be directed to six key areas:

    —  transport;

    —  housing (considered jointly with the Department of Social Security);

    —  regeneration;

    —  environment;

    —  countryside and rural policy (considered jointly with the Ministry of Agriculture, Fisheries and Food); and

    —  land-use planning.

  3. A review of the local government finance system was also undertaken with older departments in parallel with the work on these six policy areas.

  4. The Department was conscious of the need for integration of policy across these areas and so developed overarching terms of reference, as well as terms of reference for the six individual review areas. The DETR news release of 24 July, contained all the terms of reference for the CSR.

  5. Work was taken forward through steering groups of officials for each of the six reviews and a further group looking across all the six areas. The Treasury, No. 10 Policy Unit and the Efficiency Unit were represented in each case and other departments involved—either through membership of steering groups or ad hoc consultation—as policy interest dictated Ministers were consulted regularly and kept informed of progress by the steering groups throughout the process. The Deputy Prime Minister and other DETR Ministers agreed the main issues to be addressed at the outset, the conclusions to be reached from the reviews and the detailed contents of the reports.

  6. Progress reports were made to PX Cabinet Committee in October 1997 and the subsequent feedback from the Committee taken into account. A final report covering all DETR's CSR work was put to PX in March 1998 and the outcome was summarised in Chapter 8 of the Government's CSR White Paper issued in July 1998 (Cm 4011). The outcome involved detailed negotiations between the Department and the Treasury over key issues such as the resources to be made available to the Department and key targets to be delivered.

  7. Sustainable development was identified as a key element of DETR's CSR work from the outset. It is referred to in the first paragraph of the overarching terms of reference and was a basic consideration of each of the six policy reviews.

  8. The transport spending review was conducted in tandem with the development of the integrated transport White Paper, and the review of the trunk road programme, both of which explicitly took as a central theme the importance of sustainable development. Achieving a sustainable transport system is the core aim of the new integrated transport policy as set out in the White Paper. It aims to extend choice in transport and secure mobility in a way that at all times supports sustainable development.

  9. The review of trunk roads assessed proposals against a range of criteria, including impact on the environment, the economy and the social dimension. The results of the Roads Review have been published in A New Deal for Trunk Roads in England. Chapter 8 of that document provides an overview of the environmental and other benefits and costs.

  10. In the case of the environment review, sustainable development considerations were at the heart of the review and permeated the whole debate. As a result of the CSR, an extra £174 million has been allocated for spending on energy efficiency, and spending on other environmental protection programmes is being increased by £80 million over the next three years. This includes £50 million to enable the new contaminated land regime to be implemented and £15 million for the Environment Agency.

  11. The countryside and rural review brought together the diverse streams of economic and social development; protection and enhancement of all aspects of biodiversity; and recreation and access to the countryside. Accordingly, sustainable development was a key feature of this review. This can be illustrated by two examples.

  12. First, is the decision to merge the Countryside Commission with part of the Rural Development Commission to create a new body to champion rural England and the English countryside. The new merged agency will play a central role in delivering the Government's vision for the countryside. It will integrate:

    —  economic and social development policies;

    —  policies for protecting and enhancing the beauty and diversity of the countryside;


    —  policies for promoting access to the countryside.

  13. The second example is the announcement that closer strategic planning arrangements will be developed between DETR and MAFF on countryside matters (see also the response—paragraphs 36 and 37 below-to the Committee's question on a joint DETR-MAFF Public Service Agreement). This necessitates an integrated approach that gives equal consideration to environmental, social and economic objectives.

  14. This regeneration review resulted in agreement on an overall regeneration and regional policy objective which is "to enhance economic and social cohesion throughout England through effective regional action and integrated local regeneration programmes". It has a number of sub-objectives which are relevant to sustainable development in its broadest sense but, in particular, they include bringing derelict, contaminated and disused land and derelict buildings back into use, and preventing the deterioration of land and buildings.

  15. Sustainable development principles are fundamental to the planning system, which embraces a number of policy areas, including transport, housing, regeneration and environmental protection. The planning CSR focused on the effectiveness of the planning system, drawing on work that was already underway on improving efficiency, decentralising policies to a regional level, accommodating household growth and integrated transport.

  16. While Treasury were responsible for co-ordinating the handling of reviews across departments, the Deputy Prime Minister wrote to all his Cabinet colleagues at the commencement of the CSR, stressing to them the importance of sustainable development and the need for them to bear this in mind in carrying out their spending reviews.


  Were the sustainable development implications (positive and negative) from housing police identified?—at what stage in the process?—in what detail?—was the comprehensiveness of this work confirmed by reference to any outside source?

  17. The Housing CSR concentrated on the major housing and welfare consequences of Government expenditure programmes, such as capital expenditure by local authorities on the housing stock. The overall aim of the review was to ensure that housing policies contributed to the Government's objective of offering everyone the opportunity of a decent home, and so promoting social cohesion, well-being and self-dependence. In terms of sustainable development, the review addressed the positive and negative implications of housing policy in respect of social and economic progress and, to a lesser extent, environmental protection.

  18. In looking at the implications for social and economic progress, the review included some very detailed analysis of the links between housing policy and social exclusion. This was backed up by extensive research, including the findings of the 1996 English House Condition Survey, published earlier this year.

  19. The review considered environmental protection in less detail because it was conducted in parallel with a number of other reviews which were considering in more detail the impact of housing on the environment. These included:

    —  the Government's consideration of its policies for accommodating the demand for new housing arising from the projected growth in the number of households in England (where, for example, a 60 per cent. target has been introduced for the proportion of new housing development which must take place on previously developed sites);

    —  the Environment CSR, particularly in respect of the Government's programmes for promoting energy efficiency and tackling fuel poverty;

    —  a review of the climate change programme, including the part played by the domestic sector;

    —  a review to establish the maximum possible contribution that could be made to achieving the Government's carbon dioxide targets through the Building Regulations;

    —  consultation on revising the UK Sustainable Development Strategy which, amongst other things, is addressing action to help build sustainable communities;

    —  consultation, linked to the revision of the Sustainable Development Strategy, on sustainable construction; and

    —  the work of the Construction Task Force which has presented recommendations to Government on the scope for improving quality and efficiency in UK construction, including the house building industry.

  20. The Housing CSR sought to take account of these other reviews but not to duplicate them.

  21. Ministers determined the main issues to be addressed in the Housing CSR without formal reference to outside bodies. However, the terms of reference for the Housing CSR were widely publicised and were sent to a number of non-governmental organisations. This process elicited a significant number of contributions to the review—including contributions from organisations and individuals with specific interests in sustainable development—which were taken into account.

  22. The reviews of household growth policy, the climate change programme, the achievement of carbon dioxide targets through the Building Regulations and the UK Sustainable Development Strategy (including sustainable construction) have all been founded on comprehensive public consultation. The Construction Task Force members were drawn from outside Government.

  Did the review identify housing policies and/or subsidies which have an adverse environmental impact; run contrary to sustainable development objectives; and/or could be considered to be "unjustified"? If so, please briefly describe each one and your plans for addressing the matter.

  23. The Deputy Prime Minister's statement on Housing and Regeneration Policy, published on 22 July, set out the main conclusions of the Housing CSR. For the reasons outlined above, the issues addressed were mainly—but not exclusively—related to social and economic progress. The issues, and the policies set in place to address them, included.

    —  the need to increase investment in social infrastructure;

        In local authority housing alone, a £10 billion backlog of renovation work was identified, contributing to rundown local environments, poor energy efficiency and social exclusion. The Government has provided an additional £3.9 billion for housing over the next three years to begin to redress this under-investment. This will lead to improvements in the condition of the housing stock. In addition to the social benefits that this will bring, the investment will also deliver improvements to local environments and to the energy efficiency of the stock. The improvements delivered through this investment will be complemented by an extra £174 million being provided specifically to improve the energy efficiency of the homes of people on low incomes and to help meet the UK's commitments on climate change.

    —  the need to link investment decisions to local circumstances;

        The review identified the need for local authority housing strategies to address problems in public and private housing sectors, based on proper local assessments of need, and to be delivered through more localised investment decisions. Of the additional £3.9 billion allocated for housing over the next three years, £3.6 billion will be allocated to local authorities. Combined with proposals to create a single pot for local authority housing capital, this will give them the scope to take a more strategic approach to housing, taking better account of local needs and priorities and improving the contribution that capital investment in housing makes to social, economic and environmental progress.

    —  the need to invest public resources efficiently;

        Inefficient use of public resources runs contrary to sustainable development objectives. With a significant increase in resources for housing being directed through local authorities, the Government concluded that policies should be developed to improve efficiency. This was supported by the Construction Task Force, which found that scope existed to reduce construction costs by 10 per cent. per annum. Improvements will be driven by the introduction of Best Value and a Housing Inspectorate. Further efficiency improvements will be delivered by proposals to encourage local authorities to separate their strategic and management functions for housing, and by introducing resource accounting for local authority housing.

    —  the need to involve tenants in housing management;

        The review identified a need to increase tenant involvement in housing management, both to ensure better service delivery and to reduce social exclusion. This finding was supported by responses to consultation on the Sustainable Development Strategy, where a significant number of respondents pointed to the importance of participation in helping to build sustainable communities. The Government has proposed Tenant Participation Compacts, to be established in all local authorities by April 2000. The Government's tenant participation grants programme has also been expanded.

    —  the need to tackle social exclusion;

        The review helped to identify the significant impact which housing policy has on social exclusion. Greater social cohesion is expected to be delivered through increased and more efficient investment in housing and increased tenant involvement, as outlined above. But action has also been identified to tackle the most extreme examples of social exclusion, as part of a cross-governmental programme. This includes an enhanced programme to tackle rough sleeping, and the development of a new strategy to address the problems of Britain's most deprived neighbourhoods.

  24. The Housing CSR also considered Housing Benefit and rent levels in social housing. However, because Housing Benefit is integral to the system of social welfare, it is being considered further in the context of the government's wider welfare reform process. The CSR also concluded that structural changes to Housing Benefit could not be considered in isolation from the level and structure of social sector rents. No decision was reached on rent policy in the longer term.

  Did the Department undertake environmental appraisals of new spending proposals in its CSR, in particular the proposal to invest additional money in improving council housing? If environmental appraisals were not carried out, please provide the reason for this. And please confirm whether the Department carried out initial screening exercises to determine whether environmental appraisal would be required. What were the conclusions?

  25. Because the emphasis of the Housing CSR was primarily on the social aspects of housing policy, with impacts on the environment considered more extensively in other reviews, no formal environmental appraisals of new spending proposals were undertaken.

  26. The review did recognise the significance for the environment of investment in housing. In considering the levels of resources necessary to begin to redress past under-investment in housing, the review examined evidence from the 1996 English House Condition Survey and identified, amongst other things, costs associated with improving the energy efficiency of the stock and improving rundown local environments in the most deprived areas.

  Will the new policies in the housing CSR now be subject to further environmental appraisal? If so, please explain what the requirements are for this appraisal and any related approval processes, including the timing of the various stages and documents?

  27. The impacts of Government policies emerging from the Housing CSR are mainly on social and economic progress. Capital investment will deliver improvements to the physical environment and to the energy efficiency of the stock, but the Government's policy is to devolve responsibility for investment decisions as far as possible to local authorities. The Department issues guidance to local authorities to encourage good practice in this respect, including guidance on the Neighbourhood Renewal Assessment procedure, Circular 17/96 on private sector renewal, the joint DETR/Building Research Establishment energy efficiency best practice programme and guidance on energy services, the Home Energy Conservation Act. The more detailed procedures for investment in local authority housing are set out in answer to the following question.

  Please describe the funding arrangements for the investment in council housing improvements and DETR's role in approving plans and expenditure. Has the Department set any prerequisites regarding sustainable development implications or targets, for example in terms of reduced energy use; installation of water meters and water efficient appliances; using other environmentally preferred goods and services?

  28. Resources for housing capital expenditure by local authorities in England are allocated via the annual Housing Investment Programme (HIP) exercise. Allocations are made partly on the basis of Indices of housing need and partly on assessments, made by Government Offices for the Regions, of authorities' housing strategies and their relative performance in delivering housing services. This approach provides a strong incentive to authorities to use these resources efficiently and effectively and also directs resources to those authorities who have shown they can make the best use of them.

  29. The assessment process involves a scrutiny of authorities' proposed investment programmes but no attempt is made to agree the programme in detail or to be prescriptive about specific elements of the programme. This reflects the underlying principle that local authorities are best placed to take decisions, in conjunction with local partners, about the use of housing capital resources in their area. There is, however, a substantial amount of guidance about what is expected of a good housing strategy and how authorities' performance will be assessed. This emphasises the importance of sustainability and energy efficiency issues.

  30. The Department's guidance on Local Housing Strategies issued earlier this year explains that the strategy needs to be forward looking, covering at least three years, drawn up in consultation with other interested parties and set in the context of the Government's national housing policies. The guidance makes specific reference to the need for the strategy to promote balanced sustainable communities and the example in the section on objective setting refers to the improvement of existing stock lacking energy efficient heating systems.

  31. General guidance on the operation of the HIP exercise and the assessment process includes a number of references to energy efficiency considerations. In particular, there is a separate item on energy efficiency issues within the assessment framework. This ties in with the plans for improving the energy efficiency of the housing stock which are required under the Home Energy Conservation Act (HECA) 1995. The proposed programmes of work on authorities' own stock would be expected to say what impact the work would have on the energy efficiency of the stock and how this fits in with its HECA targets.


  Why has the Department not made a commitment in its statements on how it will deliver against its objectives to doing so in a way which addresses their environmental impacts and implications for sustainable development, alongside their commitments to operate efficiently and effectively and as good employers of staff?

  32. The Department's 1998 Annual Report (Cm 3906, page 4) sets out DETR's aim and main objectives and the principles and approach followed in achieving them. Sustainable development is a key element of the Department's overarching aim which is:

    —  to improve the quality of life by promoting sustainable development at home and abroad, fostering economic prosperity and supporting local democracy.

  33. DETR's first main objective is:

    —  to protect and improve the environment, and to integrate the environment with other policies across Government and in international fora.

  34. This clearly signals the priority given to ensuring that the environment is taken into account in all Government policies, both those of DETR and other departments. The Department's principles and approach rightly give a commitment to using resources efficiently while at the same time taking into account the costs and benefits of that usage. As the Department's aim and objectives indicate, environmental factors are very much a part of these considerations.

  Will the Department's public service agreement address its management of inputs and environmental impacts as well as outputs? Will it extend to services delivered by its agencies? Local authorities? Public-private partnerships in regeneration schemes?

  35. The Department's Public Service Agreement will restate DETR's aim, objectives, principles and approach which, as already indicated, have sustainable development at their core. In seeking to ensure that environmental factors are taken into account in all Government policies, the Department will expect this to be followed by its agencies, by local authorities and by public-private partnerships in regeneration schemes, and it will put the appropriate frameworks in place to allow that to happen.

  Will there be a joint public service agreement from DETR and MAFF in respect of their joint aim of enhancing opportunity in rural areas and strengthening countryside conservation?

  36. The CSR revealed that the overall aims and objectives of DETR and MAFF were consistent and generally accorded with each other. It did not, however, determine joint aims and objectives. Both departments want to move quickly to the establishment of a joint planning framework. Detailed work on the scope of such a framework is currently being undertaken and is looking, in particular, at sensible programme boundaries so that the arrangements can be as focused and meaningful as possible. It is important that proper consultation takes place with the Non-Departmental Public Bodies and agencies through whom most of the countryside programmes are delivered.

  37. Given the need to get these arrangements rights, the two Departments are proceeding with separate Public Service Agreements. But the two separate Public Service Agreements will include clear time targets for getting the improved joint planning arrangements in place. These arrangements will involve publication of joint objectives, a description of the programme needed to achieve those objectives and plans for measuring performance against the objectives.


  Does the Department consider it appropriate that it is the only Department whose revised aims and objectives refer to promoting sustainable development, although MAFF refers to having regard to the principles of sustainable development?

  38. The Government's commitment to put the environment at the heart of decision making applies to all departments. It is supported by a framework which includes Green Ministers in each department and requirements for policies with significant environmental effects to be subject to environmental appraisal. The extent to which departments' aims and objectives specifically refer to sustainable development is a matter for the individual departments concerned, rather than for DETR.

  39. The Government's memorandum to the Environmental Audit Committee, in response to its report on the Greening Government initiative, commits the Government to consider the case for incorporating sustainable development into the remit of all new bodies as they are created. Green Ministers have also been asked to consider and report to the Cabinet Committee on the Environment on how far sustainable development should be incorporated into the remit of existing departments and Non-Departmental Public Bodies.

  Was any provision made within the CSR process for the Department to obtain information on other departments' CSRs and new spending proposals so that it could consider their implications for sustainable development?

  40. DETR was keen to see sustainable development reflected in the CSR process and encouraged other departments to integrate consideration of the environment into their reviews. The Department worked closely with other departments on cross-cutting reviews, for example with MAFF on the countryside and rural policy review and with the DSS on housing. The Department also kept in close touch with other departments' reviews in so far as they concerned services delivered by local authorities, because DETR has overall responsibility for sponsorship and finance of local government. DETR did not, however, routinely receive detailed information on other aspects of other departments' reviews or spending plan proposals during the CSR. It is the responsibility of each individual department to take account of sustainable development in its activities.

  Should the Deputy Prime Minister have a role in the Cabinet Committee responsible for reviewing departmental spending to ensure that wherever possible departments have taken opportunities to develop services and facilities consistent with the Government's commitment to sustainable development?

  41. The Committee on public spending will be chaired by the Chancellor of the Exchequer and its membership will consist largely of Ministers from departments with relatively small levels of public expenditure. It would not be appropriate for the Deputy Prime Minister, in charge of one of the largest spending departments, to be on a Cabinet Committee responsible for making recommendations on expenditure plans. In any representations he makes to the Committee, however, the Deputy Prime Minister will have the wider commitment to sustainable development in mind. There will also be many other channels open to the Department to encourage other departments to develop services and facilities consistent with the Government's commitment to sustainable development. Principal amongst these will be DETR Ministers' membership of various Cabinet Committees, supported by the network of Green Ministers.

November 1998

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