Memorandum submitted by the Environmental
Industries Commission (EIC)
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 275 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
As noted in our response to the Environmental
Audit Committee's earlier inquiry into this issue a wide range
of Government and stakeholder reports have set out the huge potential
of public procurement to play a leading role in sustainable development.
Government has slowly responded with new policies,
including those set out in the Framework for Sustainable Development
on the Government Estate.
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.
This conclusion was born out by the conclusions
of the recent National Audit Office study into procurement which
discovered the practical difficulties budget holders are having
in procuring sustainably. This is a huge wasted opportunity. The
Government cannot lead the world on climate change whilst failing
to purchase basic energy efficiency equipment for its own offices.
EIC therefore considers that the Government
must provide detailed guidance to staff supported by a training
programme on implementing sustainable procurement.
EIC also believes Departments should be required
to report any occasions where they have not purchased products
that comply with the "Quick Wins" specifications published
in 2003.
3. LARGE PUBLIC
SECTOR BUILDING
PROJECTS
One procurement area that stands out as failing
on environmental considerations—and particularly on energy
efficiency, is the Private Finance Initiative.
EIC's Members who supply technology such as
boilers and ventilation equipment report that in most cases public
sector projects procure the cheapest, most polluting option, even
where whole-life costs are higher than with more efficient alternatives.
For example one Member company found that just
two out of 70 public sector projects they tendered for earlier
this year had specific energy efficiency requirements in the tender
documentation.
Major public building projects such as schools
and hospitals will be in operation for many years and the failure
to ensure they are energy efficient is a huge wasted opportunity.
Our Members experience is in line with the findings
of a survey by Construction News in February which asked 50 English
local authorities for details of building and civil engineering
contracts let. For contracts worth more than £3 million almost
two thirds were won by lowest bidders. For contracts worth less
than £3 million 9 out of 10 were won by the lowest bid.
And the Combined Heat and Power Association
has written to us to confirm that their Members suffer from the
same problems in selling technology to public sector projects.
In September 2004 the Prime Minister pledged
all new schools and City Academies should be models for sustainable
development. The experience of our Members suggests this is still
very far from the case. We have recently written to Elliot Morley
MP, Environment Minister, to raise our concerns.
One potential mechanism to tackle this problem
is through the Code for Sustainable Buildings now being developed
which the Government has pledged to implement in public sector
buildings. However this currently only applies to dwellings.
EIC believes the Government should conduct an
urgent review of the energy efficiency requirements in recently
awarded large public sector building projects to provide a clear
picture of what is currently being achieved. If this confirms
that high standards of energy efficiency are not being achieved
then the Government should act urgently to set out clear mandatory
requirements for energy efficiency in all large public sector
building projects—and to audit compliance with them. This
could be achieved through the widening of the Code for Sustainable
Buildings to cover commercial buildings rather than just dwellings.
1 November 2005
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