Examination of Witnesses (Questions 320-339)
BARONESS YOUNG
OF OLD
SCONE AND
SIR JOHN
HARMAN
25 JANUARY 2006
Q320 Mr Reed: Related to that in
many ways would be the resources at the Agency's disposal. Do
you believe that you are sufficiently resourced to do what is
asked of you by Government, by Defra? How do you feel you measure
up with your desire to "do more, better, faster, with less"?
Sir John Harman: It is a question
to which I am tempted to give the same answer as the Minister.
He was absolutely right of course, every body with a responsibility
like ours would always like some more funding, but let us put
that rather obvious comment to one side. To answer your question,
I would give two somewhat different answers. One as regards expenditure
on flood risk management and one as regards, if you like, the
rest, but which is mainly environmental protection funding. As
Mr Taylor was pointing out, our budget for the year we are presently
in is just over a billion, £1,027 million, of which 551 is
for flood risk management. That has seen a substantial increase
in recent years, particularly the year we are now in, that is
the year which has seen the biggest step up. I would only echo
on flood risk management perhaps two things that came out in Dr
Jones' discussion with the Minister. First of all, we believe
that this level of spending on flood risk is a step on a longer
journey which was described quite closely by the Foresight recommendations
that in the long-term the UK ought to be aiming for approximately
a billion pounds a year and at the moment it is 551 in this present
year through the Agency (there are other operators too). We see
this as an upward trend, it will need to be. The second observation
I would make is we are now at a level where I think it is reasonable
to say, as Miss Nason was indicating, that we are at a level of
expenditure where we can probably say the condition of assets
can be held, it is no longer deteriorating, and we are putting
more emphasis in that area. On flood risk management, we would
like more, we think the kind of change pressures indicate an increasing
path of need and we think the present level of expenditure, level
of investment, is correct for the present time. As the Minister
was indicating, there is a challenge to us to make sure we have
got the resources to deliver that programme with competition for
engineers and so forth. On the other side of the Agency's expenditure,
the Minister said, and Members have quoted, nearly £650 million
comes in Grant-in-Aid; but a lot of that is flood defence Grant-in-Aid,
448 from Mr Morley's Department and 21 from Wales. This is a rough
approximation. The remainder has stayed more or less static in
real terms over the period of the Agency's existence. I have been
with the board since 1996 so I can speak from experience. This
is the area where new duties come along and are absorbed by the
Agency and eventually create new charging schemes, but there is
always that pressure. Just to give you an indication of the size
of that, we currently administer for UK Government 120 regulations.
54 of those have come in since 1996 and have had to be absorbed
as we have gone along in what in real terms is a relatively static
quantity of money. The danger is of being given new unfunded duties.
For instance, a lot of our activities on farms because of political
decisions come out of the GIA rather than by a charging mechanism
which means that GIA is being continually challenged and we are
continually having to—I am sure if Mr Taylor was here he
would quiz me on the efficiency—plough back efficiency savings
in order to maintain our level of service against this rising
demand, if you like, which is expressed through new regulations
and doing that within rather the same resources that we have always
had. We do feel the shoe is pinching there. We do argue annually,
as Mr Morley indicated, over resources but the board is an experienced
board, the executive is experienced, and we manage with what we
have got. I would clearly like a bit more because it means, for
instance, on enforcement of waste regulations, fly-tipping and
so forth, almost all of that money comes from Grant-in-Aid but
the more we have, the more we can do, it is as simple as that.
Q321 Mr Reed: There is a real danger
then that the expertise of the Agency is being spread too thinly.
Sir John Harman: There would be
a danger but I do not think we are at that stage at the moment.
One of the things we are charged with—there is a quote in
the ministerial guidance—is we are expected to maintain
ourselves as a centre of expertise and excellence in a range of
functions, and we do that. Part of the advantage of being rather
big is we have resources to maintain expertise but—I will
defer to the Chief Executive on this—I think it is at the
operational end rather than the policy expertise where just covering
the number of things we have to do makes the job feel most stretched,
but we are doing it well within the resources we have.
Baroness Young of Old Scone: Could
I come in on a couple of points. I think the Chairman is right
in saying in terms of flood risk management we have had a major
increase and the big stretch for us is to spend it well. We are
rising well to that challenge but we will soon have got that under
our belt and be ready for another growth spurt. The thing we have
got to always remember is the more flood defences we create, the
more maintenance money we need to maintain them. I think the maintenance
issue is an issue for the future without a doubt. On the business
of the remainder of the funding, the non-flood risk management
stuff generally speaking, under the cost recovery provisions where
we have got a charge for a particular activity once we have set
that activity up, and there may well be an unfunded process at
the beginning of it, we are able to recover the costs and that
should maintain a balance. We should be getting back what we spend,
that is part of the rules. The areas that most tax us are those
areas which are not charge funded, for example some of our navigation
functions or some of the regulatory regimes that are regarded
as not being appropriate for charging, for example in some of
the agricultural regimes where we have got a large range of people
who we regulate and no visible forms of support to do it with,
so we have to cut and paste, as it were, our Grant-in-Aid to make
sure that we focus on the highest priorities. I think those are
the areas that I would be most concerned about in terms of funding
pressures for the future.
Q322 Lynne Jones: There was some
discussion with the Minister about the ring-fencing of budgets
and he did say there was flexibility but we have had other evidence
suggesting that there are a high number of funding streams that
are ring-fenced which leads to the Agency having to develop highly
complex accountancy and budgetary regimes to reflect this inflexibility.
Who is right, this witness or the Minister who says you do have
flexibility? Are you wasting money on accountancy because of the
inflexibility which would be better spent elsewhere?
Sir John Harman: I am sure our
finance director would say we do not always agree with the accountants.
I think they are both right. I am sorry to answer in that way.
When the last Committee did its inquiry, I think our evidence
at the time was there were 80 something different ring-fences.
I remember my grandmother's mantelpiece which had a jam jar for
the gas and a jam jar for the electric and so forth; we had 86
jam jars on the mantelpiece and you could not transfer half a
crown from one to the other. That has got better. One way it has
got better is that flood defence now comes under national Grant-in-Aid,
it is not regionally split as it was. For every major charging
scheme, for instance for pollution prevention control, which is
a major regime for us, there is a ring-fence because clearly the
people putting into that scheme want to ensure they are paying
costs that are relevant to their own regulation and not to something
else. There is still a large number of ring-fences. Grant-in-Aid
is largely unhypothecated. There are bits of the rest of it—flood
defence clearly is there for flood defence—which are hypothecated,
but not very many. Largely the Agency can move funds around, the
other 140 million or so, which is non-flood defence Grant-in-Aid.
For instance, in this last year we shifted a substantial sum of
money in light of the state of our navigation assets into improving
the navigation assets. There is a degree of flexibility but if
you have the wide range of functions we do have, short of stopping
something, although we have discretion, it is rather limited.
The truth is there is discretion but it is not wide.
Q323 Lynne Jones: Are you calling
for any change in this or are you saying you are at an optimum
point of flexibility coupled with transparency in terms of your
re-charging?
Sir John Harman: I will pass this
to the Chief Executive. The only thing I would say by way of introduction
is personally I do not see that we should be asking merge the
charging schemes for different regulations but what we would like
to see is a simplification of the regulatory process so that more
of these regimes come into common vehicles, say waste licensing
and IPPC, and the more that happens the more flexibility you get
with the funding. I would like to see fewer ring-fences but I
do not advocate the abandoning of the polluter pays and the cost
for that particular regime being transparent for the payer.
Q324 Chairman: Can I just be clear,
when you talked about transparency for the person who is being
charged, if anybody who has a charge says to you "how is
this calculated", do you provide them with a detailed explanation?
Sir John Harman: Every charge
payer gets an explanation of the system and the charges with the
bill.
Baroness Young of Old Scone: In
terms of the flexibility of the ring-fencing there is a real tension
because obviously if people want maximum transparency that must
mean there has to be a clear ring-fencing of money coming in,
money going out and visibility of what happens in the intervening
process. We are pretty transparent in the way that we determine
our charges and consult on them. There is a Charges Review Group,
which you heard about, which involves the Government, the trade
associations and some of the bigger charging partners and representatives
of SMEs. We have got our own regional committee structure that
also has industry reps. We consult every year on charges but we
have also got an overarching policy statement which describes
how our charges are set up. When we charge anybody we send them
a leaflet that shows how the charge is made up. About 18 months
ago now there was a joint Defra/Agency review of charging principles
that the Treasury, the DTI, the Cabinet Office and Welsh Assembly
Government also took part in and agreed the principles by which
we charge. Our charges are agreed each year in detail by the Secretary
of State. We have managed to keep them below inflation levels
for the last three years as a result of our efficiency programmes.
If industries do not like our charges, in many cases they can
take a risk-based approach and by improving their performance
get a lower charge on our OPRA risk-based charging programme.
That can make quite a bit of difference to them, £7,000 difference
in the fee for example. I think we are doing quite a lot. We can
let the Committee have the huge amounts of documentation we have.
This is our consultation on next year's charging scheme which
I think is pretty transparent even if it is rather huge. There
cannot be many stones left unturned by this document.
Q325 Chairman: I am sure that is
probably true. I was reflecting on the fact that there was quite
a lot of criticism in the evidence we have had, particularly from
those in the waste field, that charges still seem to be on the
high side versus what you are talking about, which is supposedly
if they can see that they are fair and reasonable because it is
transparent those comments would not have arisen.
Baroness Young of Old Scone: Can
I just pick that up. In terms of some of the processes that are
currently underway with the waste industry, they do reflect a
number of things. They are quite time consuming, particularly
for PPC regimes because they are new, the waste industry are coming
into them for the first time, and we are continuously improving
the process on both sides, both improving their ability to give
us sensible information and our ability to streamline and reduce
the complexity and do faster the permitting process. I think there
is lots that can be done jointly with industry to reduce costs
by getting (a) more sensible permitting regimes and (b) better
performance from the industry in coming forward with their applications.
Q326 Mr Reed: A very final question
on resourcing and the sufficiency of it. In a previous life before
entering Parliament I used to work alongside the EA in the nuclear
industry and always found the Agency to be nothing but effective
and helpful, and that is undoubtedly the case. Not everybody sees
the role of the EA like that, however. For instance, the Port
of London Authority has said that the Agency tends to: "exceed
the purposes for which it was established and to be dismissive
of others' roles, even where duties and powers are complementary"
and it believes that this is a "tiresome and counterproductive"
trait.[23]
How would you respond to criticisms like that and other criticisms
which tend to drift along the line that the Agency exceeds the
purposes for which it was established?
Sir John Harman: I noticed that
in the PLA's evidence and, indeed, various comments from the waste
industry. We take them all quite seriously. In both examples you
have just mentioned, I have contact with people in those organisations
and generally I do expect to be told if they think we are getting
it badly wrong and I have not received such messages. Indeed,
some of the messages from the waste industry are contradictory
depending on who you talk to. I am a bit disappointed to read
them first in written evidence. On a serious point, our relationship
with industry is as a regulator, we are not there to do their
bidding but, on the other hand, we want it to be a positive and
workmanlike relationship and we do want to hear and react to these
criticisms, and sometimes we believe the criticism is ill-founded.
To answer your question how would I respond to the PLA, I would
quite like to go and have a discussion with the PLA on why they
think that because I had not been aware of that. Sometimes it
turns out that the evidence was written by somebody not wholly
connected to the leadership of the organisation, but we will find
out whether that is true or not.
Q327 Lynne Jones: Can I ask, were
you sent the PLA evidence by the PLA?
Sir John Harman: Most of your
written witnesses, if that is a thing you can be, have had the
courtesy—not all of them—to share their evidence with
us. Obviously we respect the confidence it is offered in but that
demonstrates the relationships we have. I have seen the PLA evidence,
yes, I hope the Committee does not mind that. I think it was the
decision of the PLA just to let us know what they were saying,
which is fair enough.[24]
Q328 Mrs Moon: I think you would agree
that part of your remit is also driving up standards and it is
part of regulation to start raising standards. Two areas that
have come out of the evidence we have had are people have welcomed
the risk-based approach and largely the people who responded to
us have also taken on board the issue of the polluter pays, but
there is still a feeling from many of those who have come to us
that there is a level of grievance, if you like, that they do
not feel they have had the regulatory dividend they hoped for
from the risk-based approach, that the Agency's primary target
is still not those who are poor performers, that those who are
not playing the game are not having a disproportionate degree
of regulation, there is still far too much regulation on those
who are complying and who are, in fact, meeting regulations.
Sir John Harman: Personally, I
am quite pleased you are getting that response because in a sense
it demonstrates an appetite for a deepening of, I was going to
say in UK policy terms but anywhere in the world policy terms,
this regime of having some calculable basis for establishing regulatory
risk and then applying it to variations in the charges, which
is very new. We are at the forefront of this and we anticipated
when it came in that there might be more opposition than there
has been from industry. It is good to hear people say, "Let's
see a bigger gradient". Let us take the waste industry, where
I suspect some of those comments may have come from. Whatever
you do to a waste site in terms of the public protection role
you cannot decline the regulatory effort to zero, there has got
to be a regulatory effort. I would agree with them that there
is not as much gradient perhaps between the lowest and highest
performing operators as there might be, and we are trying to extend
this the whole time. There was a suggestion some years ago around
the time of the last Committee inquiry into the Agency of a policy
called incentive charging where the charging would be used as
an incentive on the company to promote good environmental performance.
But if you do it within cost recovery you can never really escalate
the charges to a level which is going to incentivise a boardroom
because it is always going to be within the envelope of costs.
The more dramatic versions of incentivised charging not really
being available to us, we are doing it within the cost envelope.
We would like to see more differential, and I am glad that people
have said that to you. I think this is an area of policy that
is moving. Barbara was referring—it was a sort of Sir Humphrey
remark—to the policy of implementation. That is the sort
of thing we mean by the policy of implementation, what can we
do about how regulations are applied. The more discretion we have
over that the smarter the job we can do.
Q329 Mrs Moon: Are you happy that
the Agency is moving towards targeting those who are seen as poor
environmental performers?
Sir John Harman: Yes.
Baroness Young of Old Scone: For
example, we have reduced our routine inspections which used to
be applied uniformly across all waste sites from 120,000 to 80,000
and we are going down even further in the following year, and
targeting much more those sites which would benefit from in-depth
audits where we can take a team in for a number of days and do
a full-scale analysis of a site where there are particular difficulties.
That is on a risk-based approach where the reduction in inspections
comes to those companies who are either low-risk intrinsically
or have a good environmental performance record through our OPRA
system which very carefully rates those sites and companies. Also,
the issue of the way in which we focus on the big, bad and ugly,
the illegal end, the companies or individuals who quite frankly
flout environmental regulation has increased considerably. We
have been focusing on larger scale criminal activity, particularly
in the waste field. We have now got special enforcement teams
in every region. We have concentrated the experience of our investigation
officers, and there was a recent television programme that some
of you may have seen that highlighted that. We have been lucky
to get additional money from the Landfill Tax fund, BREW, to help
increase our work on waste dumping jointly with local authorities
and, of course, we have set up the Flycatcher database which helps
all local authorities and ourselves to get good intelligence to
help with enforcement of waste offences. We have done a major
exercise in the last year on waste exports through the ports.
There is a much greater focus now on the illegal and nasty end,
a much more risk-based and proportionate approach to legitimate
business, if I can say it like that. We must not lose sight of
the fact that legitimate business still has to get prosecuted
fairly regularly, that we are still prosecuting company directors
of quite major companies. Not all big legitimate businesses have
got a completely unsullied record. We do have to keep our focus
on the total spectrum.
Q330 Mrs Moon: In terms of your policing
role and prosecutory role, one of the issues that was raised,
and it was raised with the Minister, was the issue of the fact
that nowhere in your income does it demonstrate the costs of prosecutions
and your targeting of those illegal operators who do make large
sums of money from their illegal operations is being used to offset
the costs to those who are operating legally. Would you agree
that those who are regulated, those who are paying for regulation,
who are registering and are appropriately licensed, are in fact
within that licence fee having to pay for your policing role of
those who are not? You said you are demonstrating what your costs
are covering when people apply for a licence but within that are
you able to demonstrate that they are not paying for your policing
of the illegal operators?
Baroness Young of Old Scone: It
depends very much on the regime. In the regimes there is a specific
mention regime by regime of what enforcement role will be included
within the charges. Some regimes do not include any enforcement
even for legal operators and others include an element of enforcement
for legal operators but not illegal operators. It is a mixed picture.
The majority of our enforcement work on illegal operators comes
from Grant-in-Aid, not from charges.
Q331 Mrs Moon: Do you know how much
you generate each year from prosecutions?
Baroness Young of Old Scone: We
are not permitted to keep our fines at all.
Sir John Harman: The figure we
keep is zero, but about three million for the last year that I
have is the total of all prosecution fees.
Baroness Young of Old Scone: We
have explored with Treasury whether we could keep our fines but,
to be honest, they were monumentally not keen and £3 million
quite frankly, until fines get a lot bigger, is not worth making
too much heat and steam about, it is not going to solve all of
our enforcement issues.
Q332 Mrs Moon: Would you comment
on whether the Environment Agency is constrained by its lack of
funding from Government? What areas would you see the Agency neglecting
because of lack of funding? From my own perspective, can I ask
you to comment on the fact that in terms of conservation you have
six million to fund your work in that area as opposed to, say,
fisheries of 30 million. Are you finding you are neglecting some
areas because of funding constraints? Should you use those flexibilities
that the Minister talked about?
Sir John Harman: To come straight
to the point of your question, I do not believe that we are neglecting
any area of our brief. In answer to an earlier question I said
that at the moment we believe we are able to do a reasonable job
but, of course, it is resource constrained and of course we could
always do a bit more. It is natural that people with interests
in particularly, say, water recreation or navigation will always
say we should spend a bit more on that function. The issue you
raised, the conservation issue, is very important and it has been
a matter for the board to discuss on numerous occasions. The six
million that is quoted there is the cost, for instance, of our
specialist conservation officers and I think for some of the work
we do on SSSIs. The work that the Agency does on conservation
goes right across a lot of other cost centres. For instance, the
biggest one is flood risk management. When a flood risk capital
scheme is done it is a design requirement that any opportunity
that that spend represents for enhancing conservation is taken.
Therefore, if one were to add up all the expenditure that the
Agency makes that could be said to be relevant to the aim of conservation
it would come to a great deal more than £6 million. The issue
for us as a board is to ensure that because our duty on conservation
says that we should have regard to or promote it—I cannot
remember the verb from the Act, I could look it up if I had time—across
all our functions. There are a number of obligations like that.
Our job is to ensure that there is sufficient input, if you like,
from the other things the Agency does.
Baroness Young of Old Scone: If
you look at some of the big investments in biodiversity and conservation
they come from areas where we have played a key role, but not
our money. The successive price rounds that the water companies
go through under the asset management programme process, a five
yearly process of setting water prices, have generated almost
£1 billion for conservation and biodiversity in a 10 year
programme of which we are in the middle. The work we are doing
on the Habitats Directive with English Nature looking at which
consents need to be withdrawn or amended in order to protect Habitats
Directive sites is going to generate a programme of something
up to £800 million over a period of years. All the work we
do on improving the quality of waters, both in terms of quality
and quantity in the rivers and on the coastal areas, has an impact
on biodiversity. Our work on water as a whole has a huge impact
on wetland conservation and on the species that depend on the
wetlands. I have six million a year which is our direct costs
which is a tiny, tiny part of our total biodiversity impact.
Q333 Mrs Moon: If I can move forward
on to the issue of your income. I have got the details of your
income here. A lot of people who gave evidence felt that a disproportionate
amount of your income came from industry and that increases in
regulatory charges were coming disproportionately their way. I
think one of them quoted a rise of over 2,000 per cent which gave
them great cause for concern and they felt there was a lack of
generation of income from other sources. Would you agree that
was true? What other sources of income could you see coming your
way and would you like to see coming your way? Who are the other
people who should be paying for your roles and functions?
Sir John Harman: First of all,
on the industry side I think quite a lot has been said in both
the previous answers and your session with the Minister about
the charging regimes. They are what they are, they are based on
full cost recovery. There is an oft-quoted issue, which is not
principally for us because this is an established part of Treasury
policy that we are applying here, that we are probably unique
in Europe at going for complete full cost recovery. If you are
an industry which has a plant in England and a plant in Germany,
for the same kind of service on IPPC you are probably facing different
charging bases because more of it is borne by the taxpayer in
different economies. In Scotland, for instance, more is borne
by the taxpayer, although I understand the Scottish Executive
is seeking to migrate closer towards full cost recovery. We have
always been open to odious comparisons. It is entirely to do with
the fact—I support this principle—that we recover
100% of costs. There is an aside: because I noticed you were getting
this sort of comment I did look up the regulatory costs for one
of the commentees, which is BIFFA Waste Services. They have probably
got as many different licences, premises and sites as any company
in the United Kingdom. Their overall regulatory cost was just
under three-quarters of a million last year, which I think is
quite high actually, but that is less than one-tenth of 1% of
their turnover. I think you have got to see this in some kind
of perspective. What are our other sources of income? Very few.
We have the ability, as any other large public corporation, to
sell assets if they become redundant, we have got income from
interest and so forth, the Treasury take it all into account.
We do have a little income, but it tends to be project-based,
which we derive with partners on things we are doing together.
A typical example would be European funding for habitat improvement
or, in the case of Wales, the fisheries programme in Wales has
been European funded, but these are rather minor, they are not
significant to our core effort. They enable us to do additional
things that we otherwise would not be able to.
Baroness Young of Old Scone: We
have been pretty successful in increasing our external income
from basically selling expertise and information. We are hitting
our target of about £60 million income from that sort of
source but I think we are getting quite close to the point where
we will run out of road at some stage. I do not think there is
a huge element of additional growth available to us there. It
is things like taking our data and benefiting from the intellectual
property rights and selling some of our services that we use for
our own internal purposes to other external bodies, and also increasing
the amount of money we get from European sources for project work.
Q334 Mrs Moon: I am always intrigued
that in terms of planning applications you are often asked to
give quite comprehensive responses but you get no payment.
Sir John Harman: We get no income
from it, no. Thank you for noticing that.
Q335 Mrs Moon: I have noticed that
sometimes your reports in response to planning applications are
required to be. The question I asked the Minister was who is ultimately
going to be responsible for this if it goes wrong in terms of
building on floodplains and that is an area where you are required,
and will be increasingly required, to give comprehensive responses
but the applicant, especially if they are large developers, is
not going to be making any contribution to you, it is purely going
to be to the local authority. I was just wondering if you had
raised that?
Sir John Harman: We have raised
it, and thank you for helping us to raise it again, I think it
is important. As chance would have it, we came here from a meeting
where we were looking at flood defence expenditure for next year
and we reckoned that in order to service, so to speak, the PPS25
work we will be doing, we will probably need an additional 40
planning officers across the country. That will come out of flood
defence expenditure because it is related to a flood defence function,
but we receive no income from the planning regime for that, you
are quite correct.[25]
Baroness Young of Old Scone: There
are some areas, not necessarily external income but planning related
income, where we do think that we need to raise the issue. For
example, in the recent Pre-Budget Statement we were given a responsibility
for helping assess the sustainability of the growth zones for
ODPM. If ODPM were laying an additional duty on a local authority
the new burdens regulation would mean money would have to follow
it. We feel we could perhaps raise that as an issue.
Q336 Chairman: I might have missed
it but did you quote a figure for what the costs are of providing
all of these bits of advice in terms of planning?
Sir John Harman: I did not.
Q337 Chairman: Would you like to
hazard a guess?
Sir John Harman: No. I would like
to let you know when I know the answer, Chairman. May I do that?[26]
Chairman: Yes, that would be very helpful
to put it in perspective in relation to the number of applications
that Madeleine Moon mentioned and the potential increase in task
which you are facing because certainly in the planning field the
cost recovery from the local authority point of view is an equally
important issue.
Q338 Sir Peter Soulsby: As we commenced
on this inquiry you very helpfully described to us, and in some
cases reminded us, at the informal meeting we had with you the
size of the Environment Agency and the very considerable scope
of its responsibilities. You have reminded us again today of the
very wide range of responsibilities that you have to enforce the
particular regulations. As you have described, you are also charged
with being a Champion of the Environment and within that with
the provision of education, advice and, indeed, you also have
some responsibilities as a provider of services, particularly
recreational services of one sort or another. These roles are
potentially in conflict, incompatible. How do you cope with the
balance between them?
Sir John Harman: The conflict
is not marked. If you put any two roles together you would probably
find conflict. I am not aware this has been a particular issue
for us. Going back to the beginning of your question, the issue
for us is more how to interpret and live up to the role that either
we describe or sometimes other people describe for us. This role,
"Champion of the Environment", was coined by your predecessor
Committee, it was a product of the last inquiry. We have had to
figure what that means. It has to be in the context of two things.
First of all, in the context of the UK's approach to sustainable
development as a whole. Within that effort we must have regard
to social and economic factors and that is one of our duties actually,
it is laid out in the legislation, but we come from the environmental
corner so in that sense we are the spokesperson, if you like,
for things that are related to our functions—climate change
is related to our functions—within sustainable development.
We talked earlier about the Agency's role in monitoring, reporting.
It is really important that we communicate as well as we can.
What I do not think we can ever do, and we have never said we
could do, is be a kind of public advocacy/campaigning body principally.
We have channels, obviously, we have 12,000 staff for a start
and they are locally and regionally present, so there are plenty
of channels of communication, but we are more a vehicle for messages
than a campaigning organisation. The difficulty I have had with
this phrase has been not in accepting it describes part of our
role but not getting led too far down the assumptions it might
make. I think it is quite a difficult one for the Agency. We have
clearly to use our knowledge of the UK environment and our knowledge
of environmental processes to act as the champion of the environment
within sustainable development, but for some people that means
acting, if I may say so, like an NGO, but we are not an NGO. We
are not principally a campaigning body, we are an informing and,
as you say, educating body. Barbara may want to add her own aspect
to that. From the point of view of the Board, there has been quite
a discussion about exactly where on this spectrum the Agency should
stand and it should never get further than a logical connection
back to its statutory function would take you, in my view.
Baroness Young of Old Scone: I
think the dichotomy between regulation and advice is one that
we do not really sign up to, to be honest. We interpret regulation
in a much broader sense. Regulation is not just giving permits
and checking whether they have been adhered to, it is about how
we achieve better environment, working with businesses which we
are in a regulatory relationship with. Some of that will be strict
tick-and-check regulation, some of it will be advice, some of
it will be trying to get better policy frameworks, better economic
instruments, and as a last resort influencing public opinion.
It is using all the tools which can be put together, working with
businesses to improve their regulatory performance. So the kind
of average approach of an Agency inspector with a company will
be to work with them on the site, try, through a process of negotiation
and discussion, to get them to improve their performance, give
them a bit of help and advice, and only if that does not work
to then come in and say, "If you do not get better, we will
have to give you a written warning, and if that does not improve,
we will start putting different conditions on your permits, and
if that doesn't improve we are into prosecution." I think
we would only go straight to the, "You're nabbed" approach
if it was something which was so gross by a company which really
ought to have known better, or where there had been big damage
to the environment where we have an automatic prosecution policy.
But, generally speaking, we prefer the partnership advisory approach
as a first step. If we were separated off and only doing the tick-and-check
regulation, "You're nabbed", and some other body was
doing the advice, we would not get the benefit of that interaction
and, to be honest, you would have to duplicate the expertise in
a lot of cases to be able to do so. One of the worries we have
with the comments that industry makes about the dichotomy between
our regulation and advisory role is, there are quite a lot of
businesses, particularly medium and smaller enterprises, who really
want us to be their tame consultant, they want us to tell them
how to do it, but we cannot be the consultancy service to the
whole of British business. Businesses have a responsibility to
understand what their environmental responsibilities are and we
give them as much information and advice as we can in a generic
sense to help them with that. With SMEs our Net Regs Programme
has doubled in size over the last years and is now accessed by
a quarter of a million small and medium sized enterprises, but
we cannot give bespoke tailored advice to every single business
about every single issue, because they have got to (a) get some
understanding internally within the business and (b) use some
of the external commercial consultancy services for some of the
more complex issues. Business will always want more from us.
Q339 Sir Peter Soulsby: But the fact
is you do give advice and it is put to us there is a lack of clarity
about when you are acting as an adviser and when you are acting
as an enforcer. I quote the words of the CBI when talking about
the experience of particularly small companies and their wish
to be able to receive advice from you, "A visit from an inspector
to give advice may lead to enforcement actions."[27]
That therefore discourages them from seeking advice.
Baroness Young of Old Scone: There
is a bit of a bogeyman feel about some of this. They are anxious,
and that is obviously a communication issue we need to pick up,
to reassure people that a visit from us does not automatically
mean we are going to nab them for something. In some cases, when
they are grossly out of line and where the environmental damage
has been quite major, we really do have to take immediate action.
But I hope we are not taking a disproportionate approach to that.
We do recognise the need to work more with some of the umbrella
bodies for small and medium sized businesses to try and assure
them that we are not out to catch them out, we are out to get
their performance better rather than to catch them.
Sir John Harman: I think it is
a fair point but I would distinguish between large and small businesses.
It is really rather unlikely a small business will get an inspector
visit from the Agency unless they have a permit for something,
and if a business is sufficiently impacted to require a licence
or permit it is probably sufficiently big to understand the duties
which go with that. In those cases, where the relationship is
bound by a permit, let us say, the relationship is as Barbara
has described it; mostly there is an understanding that we are
there to regulate but we also want to give advice. When it comes
to SMEs, there is a reticence and reluctance to call on the regulator
for advice, which is why our main channel to small businesses,
which is Net Regs, is done entirely anonymously; there is no knowledge
by the Agency that you have consulted it. What we have tried to
do is work with representatives of small businesses in 100-odd
sectors to provide on the web the basic starting-kit for what
you can do if you are a small printer or a small wood treatment
facility or something. We recognise that there is an underlying
problem for any regulatory body there. Most of our industrial
stakeholders, if you like, seem to want us to give more advice,
and it is our duty to do the ones we can in that area, bearing
in mind it is unfunded. Net Regs is funded by a Treasury grant.
23 Ev 223, Executive Summary Back
24
The Environment Agency has since advised that the comments regarding
written evidence made in response to Q327 were incorrect. Back
25
The Environment Agency would like to clarify that this extra
resourcing follows a workforce review looking at all EA planning
activity and policy, including PPS25. Back
26
Ev 159 Back
27
Ev 26, para 32 Back
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