House of Commons - Environmental Audit

Select Committee on Environmental Audit Third Report

THIRD REPORT

The Environmental Audit Committee agreed to the following report:

ANNUAL REPORT FOR 2002

"Talking about sustainable development is not enough. We have to know what it is, to see how our policies are working on the ground. We must hold ourselves to account — as a Government but also as a country" — The Prime Minister, UK Sustainable Development Strategy.

"Sustainable development is vital to ensure a better quality of life, consistent with higher and stable levels of economic growth and employment ... Sustainable development is a global challenge, and there can be no relaxation in efforts to achieve it. Action is needed globally, nationally and locally"—Pre-Budget Report 2001, November 2001.

Remit

1. The Environmental Audit Committee (EAC) is appointed under Standing Order No. 152A. Its remit is:

"to consider to what extent the policies and programmes of Government departments and non-departmental public bodies contribute to environmental protection and sustainable development:

to audit their performance against such targets as may be set for them by Her Majesty's Minister's; and

to report thereon to the House".

2. Sustainable development is often said to be the pursuit of synergies or win/win approaches across the three strands of economic growth, social progress and environmental protection. The economic impacts of policy may become apparent with months and social impacts within years but the impact of policy on the environment can take decades or generations to become apparent. Thus it is not difficult to understand why the environment has often lost out to more immediate concerns when policy is made by a system vulnerable to frequent opinion polls, immediate media judgement and to a major test of public opinion only every four or five years. For this reason the environmental, rather than the economic or social, aspects of policy have been a priority for the Committee since it was established. Nevertheless, there is much work to be done in other areas. We said in our last annual report that it was our intention to examine how we could expand our activities to encompass more broadly the sustainable development and audit elements of our remit. This report reflects on our activities on both fronts throughout 2002.

Strategic Planning and Select Committee Core Tasks

Planning seminar

3. In January 2002 the Committee held a strategic planning seminar at Cumberland Lodge, Windsor. It was the first time that the EAC had undertaken such an exercise. Over the course of the day, we considered a variety of issues including future work, internal working practices, public and media relations and improving the Committee's effectiveness.

4. One of the results of the seminar was agreement on the issues that the Committee should examine on a regular basis. These are:

(a) The Sustainable Development Headline Indicators and the Government's annual report on sustainable development

(b) Greening Government

5. While we recognised that there may be years when the Committee is not able to examine each of these topics in detail, either because of other emerging priorities or because of the constraints of parliamentary sittings, our intention is to create the expectation within Government that each will be scrutinised on a regular basis. In practice our predecessor Committee had gone some way towards this goal through the thematic nature of its work, upon which we have sought to build by establishing a strong core pattern of activities around which our other work will take place. We aim to add further rigour to our own activities and to aid those regular witnesses who support our work by adding an element of predictability.

6. We also acknowledged the need for greater effort in identifying emerging issues early on thereby allowing the Committee adequate time for research before deciding on the shape of an inquiry and for preparation before its launch. Throughout the year, we have on occasion set time aside to conduct such "horizon-spotting", supported not only by our own staff but also by all those who take the time to draw issues to our attention.

7. Giving consideration to how we might increase our own effectiveness was one of the main reasons for holding the seminar. We considered how changes in working practices might increase efficiency. The main thrust of our deliberations was to examine how we might increase the likelihood of the Government implementing a greater proportion of our recommendations. The Committee has recognised that Parliament, the public and the media have a strong role in the application of pressure on the Government to accede. "The more exposure that the Committee's work receives, the more likely it will attract Parliamentary and public attention. This, in turn, increases the likelihood the Government will have to respond or be seen to respond to it".[1] As one of our advisers put it, if a Committee has no purchase on the Government, it has no purchase on the media and if it has no purchase on the media, it has no purchase on the Government. The Committee has subsequently developed the practice of considering an appropriate media strategy to accompany the publication of each Report.

8. We also considered how we might further the audit elements of our work in particular. We reaffirmed the overall goal of the creation of an Environmental Auditor General within the National Audit Office[2] and agreed an interim procedure which would enable us to broaden our reach in the short-term. Details of these arrangements are set out in paras 19-23 below.

Liaison Committee objectives

9. In February 2002, the Modernisation Committee published a Report which advocated common objectives for Departmental Select Committees and setting out an illustrative model.[3] The Modernisation Committee's Report was approved by the House on 14 May 2002 and the Liaison Committee was invited to develop guidance on objectives for Departmental Select Committees. Four overall objectives were agreed in June 2002, encompassing 10 core tasks. Departmental Select Committees were urged to act with due regard to the House's Resolution of 14 May 2002 and to the common objectives and core tasks.

10. Other select committees, including the Environmental Audit Committee, were asked to reflect on how far these objectives and tasks could be applied to make their work more systematic and comprehensive. While many of the objectives and core tasks are not appropriate to our remit, the broad thrust of the objectives and core tasks are entirely in keeping with the working patterns and overall goals we set at our seminar. Under objective B, for instance, Departmental Select Committees are urged to examine the expenditure plans and out-turns of the Departments they shadow and their agencies and non-departmental public bodies. We have agreed a systematic plan to examine the Government's expenditure and revenue. Departmental Select Committees are expected to examine major reports and policy documents published by their Departments; our strategic plan includes examination of major reports and policy documents published by Government relating to sustainable development.

The Work of the Committee

11. We have published eight Reports during the year:

(a) Departmental Responsibilities for Sustainable Development

(b) Pre-Budget Report 2001: a new agenda?

(d) Measuring the Quality of Life: The Sustainable Development Headline Indicators

(e) A Sustainable Energy Strategy? Renewables and the PIU Review

(f) Buying Time for Forests: Timber Trade and Public Procurement

(g) Pesticides: The Voluntary Initiative; and

(h) Johannesburg and Back: The World Summit on Sustainable Development — Committee Delegation Report on Proceedings.

12. We have also published two special reports during the year, both containing Government responses to reports.[4] The Government has published replies to three of our Reports as command papers.

13. A thematic pattern runs through much of our work, and that of our predecessor Committee. This pattern is set out in table one which illustrates how the Committee continually seeks to build upon its previous work.

Budget & Financial

Greening Government

Climate Change

International Issues

Specific Policy Areas

Energy

Audit

Inquiries, Reports and oral evidence sessions

1^st Report 97-98: Pre-Budget Report

3^rd Report 97-98:

The Pre-Budget Report, Government Response and Follow-up

3^rd Report 98-99:

The Comprehensive Spending Review and Public Service Agreements

4^th Report 98-99:

The Pre-Budget Report 1998

8^th Report 98-99

The Budget 1999: Environmental Implications

3^rd Report 99-00:

Comprehensive Spending Review: Government Response and follow-up

4^th Report 99-00:

The Pre-Budget Report 1999: Pesticides, Aggregates and the Climate Change Levy

6^th Report 99-00:

Budget 2000 and the Environment

2^nd Report 00-01:

The Pre-Budget Report 2000: Fuelling the Debate

2^nd Report 01-02:

Pre-Budget Report 2001: A New Agenda?

1^st Report 02-03: Pesticides: The Voluntary Initiative

2^nd Report 97-98:

The Greening Government Initiative

6^th Report 98-99:

The Greening Government Initiative.

5^th Report 99-00:

The Greening Government Initiative: First Annual Report from the Green Ministers

4^th Report 97-98:

Climate Change: UK Emission Reduction Targets and Audit Arrangements

2^nd Report 98-99:

Climate Change: Government Response & Follow-up

1^st Report 98-99:

The Multilateral Agreement on Investments

1^st Report 99-00:

EU Policy & and the Environment: An Agenda for the Helsinki Summit

2^nd Report 99-00:

World Trade and Sustainable Development: An Agenda for the Seattle Summit

3^rd Report 01-02:

UK Preparations for the World Summit on Sustainable Development

2^nd Report 02-03: Johannesburg and Back: The World Summit on Sustainable Development — Committee Delegation Report on Proceedings

5^th Report 98-99:

GMOs & the Environment: Co-ordination of Government Policy

7^th Report 99-00:

Water Prices and the Environment

6^th Report 01-02:

Buying Time for Forests: Timber Trade and Public Procurement

7^th Report 98-99:

Energy Efficiency

5^th Report: 01-02:

A Sustainable Energy Strategy: Renewables and the PIU Review

1^st Report 00-01:

Environmental Audit: The First Parliament

1^st Report 01-02:

Departmental Responsibilities for Sustainable Development

4^th Report 01-02:

Measuring the Quality of Life: The Sustainable Development Headline Indicators

Follow-up¹

Evidence session with Treasury Minister on Budget 2001 in May 2001

Hearing with Minister on 11^th December, following the Pre-Budget Report 2002

Through other inquiries (eg DRSD, Timber)

Consideration of Greening Government Reports

Through other inquiries (Budget work re Climate Change Levy)

Consideration of Sustainable Development Headline Indicators

Oral evidence session 10 May 2001 with the Deputy Prime Minister and the Minister for the Environment

Evidence session in Sept 98 on European Environmental Policy

Evidence session in May 2000 on EU Policy and the Environment Follow up with officials

Delegation attendance at the World Summit on Sustainable Development, Aug/Sept 2002

Evidence session in Sept 98 on Water Issues (no report)

Evidence session in Nov 98 on Trees (no report)

Water - evidence session in April 2001 with the Director-General of Ofwat

Evidence session in Sept 98 on Energy issues.

Consideration of Memoranda published May 2001 (no report, but followed up post election).

Oral evidence session on energy efficiency response and follow-up in March 2001 (no report)

Oral evidence session with the Energy Minister planned for February 2003

Two oral evidence sessions on the sustainable development strategy in May and June 1999 (no report)

Consideration of Memoranda on the Sustainable Development Strategy published in Jan 2000 (no report)

Oral evidence session on the sustainable development strategy in Feb 2000 with the Deputy Prime Minister

Note:

¹ The Committee has established a pattern of requesting memoranda and supplementary memoranda from the Treasury and other Government Departments in response to detailed questions as an aspect of its audit work.

The structure of Government and sustainable development

14. The general election in 2001 brought significant changes in the structure of Whitehall and in the allocation of Ministerial responsibilities in relation to sustainable development. What had been the huge Department of Environment, Transport and the Regions was broken up, with the bulk of its responsibilities passing to a Department of Transport, Local Government and the Regions and its Environment Directorate joining with the former Ministry of Agriculture, Fisheries and Food to form the Department of the Environment, Food and Rural Affairs (DEFRA). These changes were the focus of our first report of the new Parliament in which we pointed out that the Government as a whole needed to underline a belief in a new consensus, one which put sustainable development at the top of the political agenda both nationally and regionally and to counter the impression that the creation of DEFRA was unplanned. We also pointed out, working on the basis that a major reorganisation can take up to two years to complete, that those parts of Government with lead responsibility for delivering sustainable development would have spent four out of the last six years in transition. One of our central recommendations was that "significant changes to the machinery of government are in future accompanied by a memorandum to the relevant select committee(s) providing a robust reasoning for the changes and detailed information on their nature". The Government flatly rejected this recommendation. Thus, when further substantial Government restructuring took place in the summer of 2001 — abolishing the infant Department of Transport, Local Government and the Regions and splitting its policy responsibilities between two new departments — it was left to the initiative of individual select committees to pursue the implications of the changes. We consider that there would be merit in the Liaison Committee calling for changes in departments to be explicitly announced to select committees with full justification.

Budgetary and financial work

15. Financial and budgetary processes and the ways in which they do or do not contribute to environmental protection and sustainable development have remained a persistent theme of our work. We examined and reported on the 2001 Pre-Budget Report and more recently undertook a specific inquiry into the operation and effectiveness on the Voluntary Initiative on Pesticides which the Government introduced in place of a pesticides tax. We also examined the Economic Secretary to the Treasury, John Healey MP, in December 2002 on the Pre-Budget Report 2002. This session had a specific focus on environmental taxation, following the Treasury's own review, and the implications of the Spending Review 2002 for sustainable development. A Report is in preparation and we intend to Report to the House early in 2003.

16. Each department was required by the Treasury to complement its spending review bid with a Sustainable Development Report. In our February 2002 Report on Pre-Budget 2001 we made the point that we expected these reports to made available to us after the completion of the spending review process. In its response, the Government stated that this would be matter for individual departments.[5] Once the outcome of the spending review had been announced in July 2002, we asked each department for a copy of its sustainable development report. None have been forthcoming. We pursued the matter with the Economic Secretary in December who told us that the Treasury regarded them as internal policy documents and as such not suitable for publication. We do not consider that submitting the reports to us would necessarily equate to publication. As an audit committee, the analysis of process, rather than just outcomes, is central to our work. The Treasury's refusal to provide Department's sustainable development reports has denied us the opportunity to assess how effective these reports were or to what extent the Treasury took their contents on board during the spending review process.

1 First Report from the Environmental Audit Committee, Session 2000-01, on Environmental Audit,: The First Parliament, HC 67-II, p. 5. Back

2 First Report from the Environmental Audit Committee, Session 2000-01, on Environmental Audit,: The First Parliament, HC 67-II. Back

3 First Report from the Modernisation Committee, Session 2001-02, on Select Committees, HC 224. Back

4 First Special Report, Government Response to the Second Report from the Committee in the last Parliament, Session 2000-01, on The Pre-Budget Report 2000: Fuelling the Debate (EIC 71); Second Special Report, Government Response to the Committee's Second Report, Session 2001-02, on the Pre-Budget Report 2001: A new agenda? (HC1000) Back

5 Second Special Report, Government Response to the Committee's Second Report, Session 2001-02, on The Pre-Budget Report 2001: A new agenda (HC1000), Annex, para 21. Back