Examination of Witnesses (Questions 239-259)
16 MARCH 2005
MS JILL
RUTTER, MR
BOB ANDREW
AND DR
ANDY DAVEY
Q239 Chairman: Welcome. Thank you very
much for coming and may I apologise to you all for the delay in
the beginning of the session. We had extra business to conduct.
I understand you may have an opening remark or two you would like
to make to us?
Ms Rutter: If it would be helpful
to the Committee, I will introduce my colleagues and update because
the Defra memo that you had predated the sustainable development
strategy which the Prime Minister and our Secretary of State launched
last week. It might be helpful to tell you where things have moved
to. I am Jill Rutter, director of strategy and sustainable development
at Defra. On my left is Andy Davey who is the programme manager
for the sustainable consumption and production programme, a strategic
priority within Defra. He sits in the environment, business and
consumer division. On my right is Bob Andrew, who is the principal
procurement adviser in Defra's procurement and contracts division.
You picked a very timely theme, as you will have seen from our
sustainable development strategy. One of the things that emerged
very clearly from our consultation was that, particularly for
the business community, sustainable procurement, the ability to
embed sustainability into government procurement, was a litmus
test of the government's seriousness on sustainable development.
In the memorandum we submitted, we said that the new strategy
would chart the way forward. Over the past months we have been
working with colleagues in the Office of Government Commerce,
colleagues in the Treasury, colleagues in the Sustainable Development
Commission and with other government departments through the Interdepartmental
Programme Board for the development strategy to do that. There
are some very specific commitments in the strategy. The first
is a clear commitment to leadership. The strategy sets out our
commitment to be a leader in the EU on sustainable procurement
by 2009. There is a process of benchmarking going on at the moment
within the EU. What does that mean? The UK is taking a lead on
that. That is going to crystallise at a conference in October
under the UK presidency. At the moment, a lot of work is going
on in assembling the evidence base. When we assemble that evidence
base, we will look to convert it into more targets. We are working
with suppliers on embedding sustainability with the Office of
Government Commerce and the NHS Purchasing and Supply Agency.
We are working with the Chartered Institute of Purchasing and
Supply on the skills agenda. There is a lot of good work going
on under business as usual. What our Secretary of State was very
keen to deliver through the new strategy was a step change in
performance. That is why she has asked Sir Neville Simms, the
retiring chairman of Carillion plc and the chairman of International
Power, to head up a task force on sustainable procurement with
a view to drawing up what we are calling a draft national action
plan to be available by April next year. We are in the process
of landing the terms of reference and the membership of that task
force with Sir Neville. Obviously, as you come to conclusions
from your study, it would be very useful to us to be able to feed
those findings into Sir Neville's task force. That is a very important
way of taking this agenda forward and accelerating delivery. One
other theme that is very clear through our new sustainable development
strategy is that of better departmental accountability. There
is already a commitment in the framework for sustainable development
on the government estate on procurement that every department
will have its own sustainable procurement strategy by the end
of the year. There is also a commitment in the new sustainable
development strategy that every department will produce its own
departmental action plan at the end of the year. In addition to
the work done in this committee, we are also proposing to expand
the remit of the Sustainable Development Commission to report
to the Prime Minister on progress on delivery. One of the things
that is very important to us is that this becomes something the
departments feel genuine ownership for in how they are taking
it forward.
Q240 Chairman: Could you elaborate a
little more on your relationship with the Office of Government
Commerce? They said to us that they see you as the lead policy
department in sustainable procurement and they are only there
in an advisory capacity. Is that still the position?
Ms Rutter: Defra leads for the
government on sustainable development but Defra does not deliver
sustainable development on its own. Part of what we are doing
is putting in place new delivery arrangements to make clear that
where we lead others are embedding and delivering. We see ourselves,
along with other interested government departments, as helping
to define the policy. For example, on the new task force, Defra
will be funding the secretariat for the new task force but we
look to OGC to provide expert advice on procurement—vitally
important is how our policy ambitions are reconcilable with constraints
that may come out of the EU procurement framework etc—and
also in their role as giving guidance to all departments on procurement
they have a very important part in the delivery role. We have
been working very closely with OGC and we seem to have spent many
of the last few months in meetings with the OGC. We have presented
on this to their managers at senior and middle manager level.
My permanent secretary presented to the OGC supervisory board
last week to get buy-in at all levels on this agenda from OGC.
I think that relationship is working very well.
Q241 Chairman: Did you have any sense
at any time that they thought this was all rather a bore?
Ms Rutter: No. You have Peter
Fanning giving evidence later so ask him.
Q242 Chairman: I am interested in whether
they have said, "Wow, yes. We are really up for this and
keen on it" or whether it was regarded as a bit of a chore,
something that they had to be coerced into doing, or coaxed rather
than coerced perhaps.
Ms Rutter: I do not think so.
What was very noticeable last week when my permanent secretary
presented to his permanent secretary colleagues at the OGC supervisory
board was the degree of instant buy-in. This was something that
they wanted to do, were very up for doing, and saw it as a very
helpful way of delivering their own objectives rather than as
an add-on. I have some sympathy for OGC because there is a great
temptation to regard procurement as a magic bullet that can solve
lots of departmental policy problems. If only you can get it through
procurement, that is going to be the answer and it is great because
it is not a tax or a charge or more government money, in a sense.
I can see that OGC are concerned that they have to turn the policy
advice coming from a number of government departments into guidance
that is usable by procurement officials at the front line for
delivery. One of the conclusions we have come up with is there
is no shortage of guidance on how to do things. There is a danger
of overload. If you try to deliver too many policy objectives
through procurement, you end up delivering none because there
is too much noise around.
Mr Andrew: We have had a very
close relationship with OGC on the timber procurement policy and
on the food procurement initiative. They have always helped and
given advice, attended conferences and meetings. It has been very
useful and a good working relationship.
Ms Rutter: Clare Poulter chaired
the sustainable procurement group and that drove the input into
the framework and developed the quick wins and the joint note
on environmental issues in purchasing. The collaboration has been
very good. If anything, Defra is slightly under-resourced rather
than OGC.
Q243 Joan Walley: Can I press you further
about timber procurement in respect of the way that you are working
with OGC and ask what links there were with the Foreign and Commonwealth
Office in respect of the concerns that were displayed on News
Night last night about the way in which there has not been
full US support for the stance that the government is taking,
which is largely being able to take a leading role in the G8 precisely
because of making progress on the timber procurement issue.
Mr Andrew: OGC was not directly
involved in that particular issue. I was, along with the Department
for International Development and the FCO. I am a member of an
international forestry group in Whitehall and we meet regularly
and exchange information and collaborate or cooperate on all those
sorts of issues. I have been quite involved in the G8 process
and the lead up to the briefing on the policy being developed
for that. I was aware of that News Night programme.
Q244 Joan Walley: Were you aware of the
US position on it?
Mr Andrew: We were advised by
the journalist involved of the US position and we expressed surprise.
Q245 Joan Walley: You were advised of
the US position through the News Night reporter?
Mr Andrew: Yes. I had been to
a previous briefing session of officials where the US had made
their position clear: they did not think that the timber procurement
policy would be appropriate for the US because they were a net
producer and they did not see that there was any need to interfere
with the market mechanisms in that respect. There was no indication
from that meeting that they were planning to scupper the initiative.
Q246 Chairman: The Sustainable Development
Commission told us in evidence, which you probably have seen,
that there was a lack of leadership throughout government in the
area of procurement. Do you think that was true, is true, is being
addressed now?
Ms Rutter: I think it is a lack
of initiative on procurement. Procurement remains a Department's
responsibility. This is one reason why permanent secretaries sit
on the OGC advisory board. Leadership and procurement are part
of every accounting officer's responsibility so in a sense should
there be some central government leadership as opposed to the
advice and support people get from the Office of Government Commerce—I
am not sure that is really what you are looking for. Jonathan
Porritt in his comments on the new strategy said that there is
a new seriousness about delivery. That is one reason why we are
very concerned to reinforce departmental accountability through
the new frameworks we have. It is why we are also very concerned
to try and galvanise action and why we are setting up the new
task force which the SDC will be represented on, to define where
the priority areas are, to make a real difference. We are very
keen to draw on work that Andy Davey's team have commissioned
on the evidence base to look at areas where government procurement
makes a significant impact on the environment in the first instance
and also bringing in potential social issues. Also, where government
purchasing has significant capacity to drive market transformation,
where we can use our purchasing clout to change a whole market.
Those are some of the things that the Simms task force will be
doing in setting out a plan which we will then hope to translate
through this theme of government leading by example, which was
one of the key themes our Secretary of State highlighted last
week and one of the reasons we have singled out sustainable procurement
as an area where we want to show what we are doing. We hope to
show more leadership in the future.
Q247 Chairman: That is interesting because
the report of the sustainable procurement group in January 2003
indicated that the SDU would be waving goodbye to the issue of
procurement at a fairly early opportunity on the basis that it
was all going to be mainstreamed and there would be no longer
any need for Defra to play such a hands on role. Has that situation
now changed?
Ms Rutter: It has because we have
now decided that we want this task force to try and deliver a
step change in delivery. That came through very strongly in our
consultation.
Q248 Chairman: Is that because it has
not been mainstreamed?
Ms Rutter: The jury is out. We
do not have the evidence of what has happened so far. Every department
has until the end of the year to draw up a sustainable procurement
strategy. Having talked at the OGC directors' meeting, every department
can point to examples of good practice but whether it is systematically
applied across the piece is the area where as yet, because the
framework has only been in place since last October, we do not
have the evidence. Looking within departments, I do not think
yet we have managed to unleash the potential for procurement and
that is what I hope the Simms task force will be looking at, to
assist in this process of market transformation and make a big
leap forward. The other point about the Simms task force and why
we think this is very important is that it is going beyond the
£13 billion central, civil government expenditure into the
wider public sector. We are looking there to influence best practice
in local authorities and the NHS and set an example to business
there as well, which is why we attach such importance to clear
business and contractor supplier buy-in to it. We have concluded
that the easiest thing to do for this is to establish a secretariat
which will nominally for the time being be shared between SDU
and Defra's procurement contract division, drawing on PCD's expertise,
drawing on the work that is going on in EBC on market transformation
and the evidence base.
Q249 Chairman: Far from looking to reduce
your role, which is what the situation was in January 2003, you
are very hands on and involved and very much driving the whole
agenda.
Ms Rutter: We are going to provide
the support for the task force, yes.
Q250 Joan Walley: I am slightly confused
as to where the task force and the action plan sit together. You
mentioned earlier the issue about overload. It would help me enormously
if you could set out for the Committee why we need the action
plan and how the action plan is different from the task force
that you talk about.
Ms Rutter: The task force is asked
within a year to draw up the action plan. Once the action plan
has been drawn up, recommended to ministers and adopted by ministers,
the task force ceases to exist. It is a one year task force to
say what does the public sector need to do to deliver this step
change which is going to put us on a trajectory to deliver the
goal of being a leader within the EU by 2009. It is time limited.
We would ask them to look at some of the barriers to delivery
on sustainable procurement. It may be that overload is one of
those barriers in which case one of the things we would be seeking
to do is to say, "Where are the priorities? How do we do
that and where is it really important to do that?" I will
give you a very quick example on overload. We have had lots of
guidance in Defra about using recycled paper. When we did the
analysis of where we were in performing, we discovered Defra had
a pretty feeble track record on using recycled paper and only
43% of our paper was recycled. We said, "Okay. We are going
to take away the choice." Defra does not buy anything other
than recycled paper now. That is an area where we decided that
more guidance was not the answer but saying this is a policy decision
and this is the way we will go. It may be that is the sort of
thing that comes out of the task force. I am having my first meeting
with Sir Neville on Monday so I do not want to prejudge how he
wants to operate the task force and what he sees as the priorities.
One of the reasons we have gone to Sir Neville is that Carillion
is an established leader in embedding sustainability into its
operations.
Q251 Joan Walley: Was it your choice
to go to the private sector for that leadership role?
Ms Rutter: Yes.
Q252 Sue Doughty: On the subject of paper,
being one of these people who has regularly over the years put
in PQs to ask about use of recycled paper, every department has
been claiming that they are using recycled paper and it was more
or less the norm. Are you claiming a quick win here over paper
when you have already had that win some years back? I appreciate
you are trying to bench mark and get your house in order and I
applaud that but could I have a little more background as to why
we were told in the past that you were using recycled paper?
Ms Rutter: I am afraid I cannot
answer as to why you had the data in the past. We now have an
SDU government website where the departments load their own data
against the targets in the framework and the government estates
report their progress so that they are open access for people
to monitor progress. Defra was using recycled paper but was not
using 100% recycled paper which was the issue specifically.
Mr Andrew: It may be due to the
fragmented nature of the government estate, NDPBs and agencies.
There are hundreds of different procurement organisations and
it may be that in the past, despite central initiatives, the messages
have not percolated down to the grass roots level. There have
been in the past paper buying commodity groups that have been
set up to collaborate across government and Whitehall departments.
They have been successful in that a central contract could be
negotiated by two or three departments working together. Why some
smaller procurement organisations within the government estate
have not used those I cannot offer an explanation for.
Q253 Sue Doughty: 43% seems rather less
than half.
Ms Rutter: That was Defra's own
figure.
Q254 Joan Walley: I wanted to pursue
the action plan because we heard last week at our inquiry in the
evidence we received, including evidence about the national procurement
strategy for local government, that all the things you are saying
now are going to be done in this action plan under the auspices
of the task force should already have been done in any case. I
do not see why we have not been getting on and doing all of this,
rather than being about to start now for something that will not
be delivered until at least April 2006.
Ms Rutter: We bench mark against
the EU. We have set an ambition of being a leader on sustainable
development in the EU. There is work going on to look behind the
EU figures but the figures suggest that the best performance is
that 40% of procurement is sustainable and is green procurement.
Those two things are not exactly the same, but it is the easiest
component to measure. The UK is at 22%, so there is a gap. If
the Simms task force looks at evidence and says there is no issue
here; everything set in train is going very well, it can efficiently
self-liquidate or whatever. We do not think that is going to happen
because we think there are still some quite significant barriers
to sustainable procurement. I can give you one example on measures
to promote energy efficiency. The government has targets for energy
efficiency in the government estate. We have been working with
our own estates operations people and with the Carbon Trust on
embracing the Carbon Trust's carbon management scheme. Quite a
lot of private companies are signed up to it. Local authorities
are signing up to it but Defra has now said that it wants to embrace
carbon management. One of the barriers to carbon management though
has been lack of ring fenced funding. We are going to work with
the Carbon Trust on ring fencing some money that will go into
delivering energy efficiency on the Defra estate. We will recycle
those savings back into further energy efficiency measures. That
has not happened to date so we think there is scope for some quite
significant improvements but I would be delighted to be proved
wrong. If I am told that this is not needed because everything
we have, the sustainable procurement strategies have come through
in December and they are all absolute paragons of best practice,
I would be delighted to be told that we have been gold plating
by having the task force. I do not think that is going to be the
case though. There are still some big wins we can bring in through
the task force.
Dr Davey: The European Commission
in its communication on integrated product policy 2003 encouraged
Member States to develop a national action plan for greener public
procurement by the end of 2006. A similar recommendation came
out of the OECD, recommending national action plans for greener
public procurement. The European Commission's Environment Technology
Action Plan, it also singles out progress on greener public procurement
to drive the market for environmental technologies. In terms of
taking forward our policy commitment on environment technologies,
we have to be proved wrong if the task force says that there is
not a need for a national action plan to deliver these agendas.
Q255 Joan Walley: Does that mean all
the recommendations of the sustainable procurement group's report
have been implemented?
Ms Rutter: They are being implemented.
If you look at the Defra memorandum, that listed how that was
being taken forward. OGC has developed the quick wins website
and is work in train to say that there were initially 27 products.
The government buys a huge number more than 27 products. Work
is now underway in Andy's division looking at agreeing the next
50. That is work in progress. Those recommendations have been
taken up and are being implemented. When you get proper monitoring
against delivery on the framework, we will know how much impact
those have had. Andy Davey has been commissioning a report from
the Green Alliance which we will get at the end of April on barriers
to sustainable procurement in the public sector.
Q256 Joan Walley: Looking again at this
action plan, you mentioned the task force. Who is going to be
putting the action plan together? Who is going to be responsible
for that?
Ms Rutter: Sir Neville Simms is
going to report to our Secretary of State and the Chief Secretary
to the Treasury. The Treasury, as you know, sponsors the Office
of Government Commerce, so the Chief Secretary is the minister
responsible for the Office of Government Commerce. It will be
a report to both of them and will contain recommendations on what
the government should do to achieve its aspirations. It will then
be for ministers to adopt the action plan and implement it. We
are very keen that it goes wider and gets buy-in through the process
of developing the action plan and that it goes wider than the
narrow central and civil procurement that is immediately under
the government purview.
Dr Davey: The sustainable procurement
group report focused on central civil government and the national
procurement strategy focused on local government and we envisage
the national action plan trying to draw all that together.
Q257 Joan Walley: How will public private
partnerships be included in all this?
Ms Rutter: They will be caught
up as they are a major way of procuring particularly buildings
and deliveries in key services. Those will be addressed through
that.
Q258 Joan Walley: That is part of the
remit, is it?
Ms Rutter: Yes. One of the reasons
the Treasury is very supportive of Neville Simms is that he has
been involved directly in a public private partnerships group,
so he is well versed in the minutiae of PFI, which is one reason
why he is a good candidate to do that and has credibility with
the Treasury and why we thought that was very important to have
someone who could bring that in.
Q259 Chairman: You mentioned a survey
that suggested that 22% of the UK's buying is green compared to
40% across the EU. Can you source that for us?
Dr Davey: It was a survey conducted
across the EU and my understanding is it was based on a sample
of local government responses.
Ms Rutter: There is work going
on now on benchmarking in Europe so we will get more robust figures
and those are the figures that will be produced in October 2005.
The UK is very heavily involved in that work programme.
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