APPENDIX TWO
Memorandum submitted by the Environmental
Industries Commission
1. THE ENVIRONMENTAL
INDUSTRIES COMMISSION
(EIC)
EIC was launched in 1995 to give the UK's environmental
technology and services industry a strong and effective voice
with Government.
With over 240 Member companies, EIC has grown
to be the largest trade association in Europe for the environmental
technology and services (ETS) industry. It enjoys the support
of leading politicians from all three major parties, as well as
industrialists, trade union leaders, environmentalists and academics.
2. PUBLIC PROCUREMENT
A wide range of Government and stakeholder reports,
not least by the Environmental Audit Committee itself, have set
out the huge potential of public procurement to play a leading
role in sustainable development.
Government policy has responded slowly to this
challenge. However, in 2003 the Government published the "Report
and Recommendations of the Sustainable Procurement Group"
and followed this with a revised "Joint Note on Environmental
Issues in Purchasing" and a list of "Quick Wins"
issued by the Office of Government Commerce (OGC). There has also
been a handbook developed by the European Commission to clarify
EU rules in this area.
EIC, therefore, considers most of the policy
drivers are in place to achieve Government policy objectives.
EIC's Members have, however, long reported that
there are major gaps between policy and practice in this area.
Most glaringly while it has been Government policy for at least
25 years to base decisions on the whole life cost of products
and services, rather than capital cost, our Members report that
capital cost is still the dominant factor in most public procurement
decisions.
EIC Members, have, therefore, been monitoring
the implementation of the policies set out in 2003. The overall
impression is that there has been a significant improvement since
then. However, progress is still very patchy and scrutiny of implementation
of policy too superficial. For example the "Sustainable Development
in Government: Third Annual Report" goes into some detail
on the purchasing of recycled paper, but the sections on energy
efficiency and implementation of the "Quick Wins" are
very vague.
This gap between policy and delivery reflects
a failure to give the necessary political momentum to integrating
sustainability considerations into public procurement. Whilst
there is clear commitment in Defra to this agenda, it is struggling
to get other Departments to take it sufficiently seriously.
EIC considers this is an area where the Government
must match its rhetoric with delivery. It cannot lead the world
on climate change whilst failing to purchase basic energy efficiency
equipment for its own offices.
3. PRIVATE FINANCE
INITIATIVE
One procurement area that stands out as failing
on environmental considerations—and particularly on energy
efficiency, is the Private Finance Initiative.
In a speech on Climate Change in September 2004
Tony Blair announced that "all new schools and City Academies
should be models of sustainable development."
In September 2003 an EIC Member, one of the
largest manufacturers of ventilation products in the UK supplying
products to several hundred Government construction/refurbishment
projects every year, carried out research on 16 Government projects
selected at random from all parts of the UK. These were mostly
schools and MoD projects and were all new build or major refurbishments;
in each case the building would have been expected to have a life
of 30 years plus. Most of them were PFI projects.
Whilst the company supplied ventilation plant
in all these projects, none of the projects were finally supplied
with the most energy efficient products/controls.
EIC has exchanged correspondence with Elliot
Morley MP on this issue. The Minister noted that new policy and
guidance has been issued since September 2003 which should be
improving the situation.
However, our Members indicate that lowest capital
cost is still the dominant factor in procurement decisions of
equipment for PFI projects.
EIC, therefore, believes that the Government
should urgently undertake an audit of energy efficiency in recent
PFI projects and issue clear instructions that all PFI projects
must meet high environmental and energy efficiency standards in
the future.
8 February 2005
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