Select Committee on Environmental Audit Minutes of Evidence

Joint Memorandum submitted by the Department for Environment, Food and Rural Affairs (Defra), the Department for Trade and Industry (DTI) and the Office of Climate Change (OCC)


  1.  The UK is at the forefront of efforts internationally to tackle climate change. The Government believes that this is one of the most urgent problems facing the world and requires action both internationally and domestically.

  2.  We are determined to provide leadership, at many levels, to ensure that international agreements on emissions reductions can be made. We need to do this now, whilst also acting urgently to reduce emissions domestically, across a range of sectors.

  3.  As such, the policies that the Government is pursuing involve many departments, and a complex range of delivery partners and stakeholders from both the public and private sectors. These organisations and the public expect Government to be joined up in its approach, consistent in policy making, and as open as possible in discussing and finding solutions to the challenges we face.

  4.  The Government is determined to deliver on this expectation. Tackling climate change requires an unprecedented effort and range of action, not just from government at all levels but from other organisations and individuals too. This memorandum responds to those areas highlighted by the Committee's inquiry press release, but there is a much wider range of action (for instance in the transport sector or through international diplomacy) that is not covered in detail here.


  5.  The Government takes seriously its responsibility to show leadership and ensure its own policies are well developed and co-ordinated across all relevant departments. It is important that we engage with our delivery partners, stakeholders and wider public to ensure clarity in how we are delivering on our climate change policies, whether this is in collaboration, in consultation, in communication strategies, via websites or through publications.

  6.  As the degree of action required and the number of organisations within and outside Government contributing to the climate change programme increases, the Government will continue to adapt to ensure that policy and programmes are delivered in a holistic way.


  7.  As part of this, the Government set up, in Autumn 2006, the Office of Climate Change (OCC) to support Ministers and departments on UK strategy and policy on domestic and international climate change. The OCC is a shared resource across the six main departments with climate change related responsibilities (Defra, DTI, DfT, DfID, FCO and CLG), and works closely with HM Treasury, Cabinet Office and No 10.

  8.  The OCC has three main functions. First, running time-limited policy-focussed projects, staffed by a mix of officials from different departments and run in a manner similar to other organisations, such as the Prime Minister's Strategy Unit. To date, the OCC has run projects on the draft Climate Change Bill, an ongoing project on household emissions—how to address carbon emissions from households and decarbonising of heat supply, the future of EU Emissions Trading (particularly Phase 3) and a small project on aviation offsetting, which fed into the offsetting guidance issued earlier this year. Second, to consolidate existing analysis and identify where further work might be needed. The OCC has already reported on science and there is a publication on the Defra website which sets out a summary.

  9.  Third, to review and provide on-going support for the governance and programme management of climate change and energy policies across Whitehall.

  10.  The starting point of the project was to ensure there was clear responsibility, authority and delivery across a range of departments. Recognising that achieving the goals and commitments set out in the 2003 Energy White Paper could not be achieved by any one government department, and required close integration across a number of departments and more widely, the Government at the time created the Sustainable Energy Policy Network (SEPN). This network of policy units from across government departments, the devolved administrations, regulators and key delivery organisations was jointly responsible for delivering the White Paper. SEPN aligned these organisations for the first time, but the Government is now going further to introduce governance arrangements that fully integrate climate change and energy policy delivery, both domestically and internationally.

  11.  This has led to the creation of a senior strategy board to manage the whole of the Government's climate change and energy policies, recognising that these two policy streams are inextricably linked. This senior board compliments the Energy and Environment Cabinet Committee, chaired by the Prime Minister, which has integrated policy leadership and decision-making for climate change and energy issues since 2005. Its terms of reference are "To develop the Government's energy and environmental policies, to monitor the impact on sustainable development of the Government's policies, and to consider issues of climate change, security of supply and affordability of energy."

  12.  The strategy board is supported by two new cross-Government programme boards covering domestic energy & climate change, and international energy & climate change. This clear governance structure at Ministerial, senior official and working levels, across all relevant departments, collectively manages the Government's climate change and energy programmes.

  13.  Responsibility for delivering key elements of the programme rests with the relevant departments of state. Defra, as the key department responsible for climate change, has overall responsibility within Government for policy co-ordination and takes the lead on many projects and workstreams, just as DTI does on energy policy. There is therefore clear accountability, coupled with collective decision-making and assurance. Delivery of many policies does, however, require contributions from various departments and wider delivery partners. The Committee is right to recognise this fact for various policies—highlighting energy, housing and procurement as areas that require cross-government working—and the Government is delivering these policies in this way.


  14.  As an example, environmental issues have been at the heart of energy policy since the 2003 Energy White Paper made reduction in the level of energy-related carbon emissions in the UK one of its four goals. Developments since then, including the Climate Change Programme 2006, the Stern Review, the Energy Review and the 2007 Energy White Paper have confirmed and re-emphasised this commitment.

  15.  As the UK has stepped up its global leadership role on climate change, and as the energy challenges highlighted in the 2003 White Paper have increased in urgency, there has been a great deal of work going on in a number of Government departments on various aspects of the climate change/energy challenge. Close working between officials in each department has been crucial. For example, the impact of the policy measures outlined in the 2006 Climate Change Programme made an important contribution to the analysis for the Energy Review on progress towards the long term carbon goals.

  16.  The Energy Review team and the Stern Review team worked closely together on the economics of climate change, sharing analysis on climate change issues including the future shape and form of the EU Emissions Trading Scheme and broad analysis of competitiveness issues with respect to different policy interventions. FCO has been active on the international front; the DfT and CLG have been working on low carbon transport and low carbon housing respectively; and the Cabinet Office and HM Treasury have played important co-ordinating roles.

  17.  This has ensured that the Government has analysed the various short, medium and long term climate change and energy policy issues coherently and consistently to make sure that our policy response is the most appropriate way to address the challenges we face.

  18.  In 2006, the Government strengthened interdepartmental working on energy policy, not only between DTI and Defra on climate change issues, but with a range of other departments and in relation to other aspects of energy policy, such as maintaining security of supply and competitive markets and addressing fuel poverty. The Energy Review report was prepared by an interdepartmental team of officials and an interdepartmental programme board has overseen preparation of the Energy White Paper.


  19.  Similarly, CLG has made action on climate change a priority and a key element of housing policy. CLG has developed a major package of policies on housing and climate action in the past year, working closely with other Government departments, delivery bodies (such as English Partnerships) and other stakeholders.

  20.  These policies include the proposals that all new homes will be zero carbon by 2016 and this will be achieved through building regulations; the revised Code for Sustainable Homes, which will provide a voluntary standard to cover aspects of sustainable design and construction of a home; and a draft planning policy statement on climate action. Defra and other government departments were and will be involved in all of these policy developments.


Public Sector Procurement

  21.  The Government has also worked to ensure that there is a common approach to procurement. HM Treasury published Transforming Government Procurement in January 2007. This report describes the significant changes to be made in central Government public procurement to equip the Government with the capability to deliver ever-improving world class public services to the taxpayer. It clearly sets out the Government's position, which is "to ensure that procurement is built on the principles of value for money and sustainability."

  22.  Sustainable procurement is good procurement and that means getting value for money—that is, buying a product that is fit for purpose, taking account of the whole-life costs and benefits. Improving the efficiency of public procurement, increased sustainability and the release of resources to front line service delivery contributes to the Government's work in the CSR; helping to address the long-term challenges presented by changing demographics, global competition, increasing pressure on natural resources and climate change.

  23.  An enhanced role for the Office of Government Commerce (OGC) is explained, giving it stronger powers to define the standards required of departments, monitor departments' performance against them, insist improvements are made where necessary and demand departmental collaboration where that improves value for money. To bring about the step change required:

    —    a higher calibre OGC will deliver the improved standards, focused on driving better value for money from procurement on a whole life costing basis. The Chief Executive will become the professional head of the Government Procurement Service (GPS);

    —    the Government will focus its top talent on its most complex and critical procurement projects, with a GPS that is flexible and able to focus resources where they can best be deployed;

    —    recognising its importance to public service delivery and value for money, departments will strengthen their procurement capability with greater direction and support from the top;

    —    departments will collaborate more in the purchase of goods and services common across more than one department, to get better value for money; and

    —    a new Major Projects Review Group will ensure that the most important and complex projects are subject to effective scrutiny at the key stages.

  24.  This approach was successfully adopted during the recent procurement exercise for the (OGC's executive agency) pan-government energy contract. Defra and OGC worked together to ensure that the contract offers value for money on a whole life costing basis, while at the same time allowing access to energy from renewable sources without charging a "green premium". This helps departments to deliver effective public services and also contributes to meeting the Sustainable Operations on the Government Estate (SOGE) targets .

  25.  OGC is working with Defra to ensure that sustainability is addressed as part of good procurement in key aspects of this work:

    —    the development of the new "Procurement Policy and Standards Framework" laying out the policies and standards that departments are expected to meet;

    —    the scrutiny that departments undergo through Gateway and Procurement Capability Reviews;

    —    the training and support offered through the relaunched Government Procurement Service (GPS); and

    —    the pan-Government contracts OGC lets and promotes.


  26.  The UK Sustainable Procurement Action Plan (SPAP, published March 2007), like Transforming Government Procurement, stresses the importance of "mainstreaming" sustainable procurement within good procurement policy and practice. This is the most effective way to increase the consideration of sustainable development issues within procurement. The SPAP strengthens leadership on sustainable procurement by providing certainty on the appropriate roles for Defra and OGC.

  27.  Delivery of the SPAP will be overseen by Ministers. The Secretary of State for the Environment, Food and Rural Affairs will be the lead minister reporting to the Prime Minister. The Head of the GPS/Chief Executive of OGC is accountable for embedding agreed procurement policies through the profession so that they become part of normal procurement practice from 2007-08. Defra is responsible for embedding sustainable development in Government. Both OGC and Defra have key roles in ensuring that government procurement delivers value for money and is sustainable. The two departments are working together to drive this agenda.


  28.  Government recognises that better and more sustainable procurement can assist departments to achieve the Sustainable Operations on the Government Estate (SOGE) targets. For this reason, the SPAP clearly establishes the Government's sustainable procurement priority as choosing solutions that meet mandatory environmental standards (the "Quick Wins") and assist in the achievement of the SOGE targets, particularly those on reducing carbon emissions, energy and water consumption, and waste generation. The importance of improved procurement capability driving better value for money for the delivery of the SOGE targets is recognised in Transforming Government Procurement and will be considered when developing material on sustainability for the Procurement Policy and Standards Framework.

  29.  In order to ensure good progress is made on the commitments within the Sustainable Procurement Action Plan and the SOGE targets, a cross-Departmental board of senior civil servants (the Sustainable Procurement and Operations Board or SPOB) oversees both. SPOB's chair is the Permanent Secretary Champion for Sustainable Procurement, who reports directly to the Head of the Civil Service on this agenda. OGC, HM Treasury and Defra are represented on this board and its working groups, as are a wide range of other departments, including those with the largest estates and the highest spend.



  30.  This collaboration over specific policies, the accountability of our governance structures and cross-government strategies are features of how the Government manages its PSA targets. Our priority is to ensure that interdepartmental working arrangements enable political leadership to be translated into clear objective and target setting that directs the allocation of resources, enables effective delivery, draws in external expert advice and remains accountable to Parliament and the public.

  31.  PSAs provide a key way of focusing and driving Government action to address key challenges. As we move towards CSR07, the approach to PSAs across government will be different from the previous Spending Round in several ways, notably:

    —    There will be a much smaller number of PSAs—less than a third of the current number;

    —    PSAs will be cross-cutting, focused on the highest priority outcomes; and are likely to involve several departments in delivery;

    —    PSAs will be outcome-focused rather than output-focused;

    —    Each PSA should be underpinned by one or more key national performance indicators;

    —    With regard to measurement, these indicators should be outcome-focused; specific, use robust data subject to quality control, and be sufficiently accurate and reliable as to enable decision-making; and

    —    PSAs will be accompanied by delivery agreements showing what different departments, delivery bodies and stakeholders will contribute to delivering the PSA;

  32.  The new approach to setting PSAs was explained in more detail by the Chief Secretary to the Treasury, Rt Hon Stephen Timms MP, to the Treasury Committee on 30 January 2007. It should further strengthen the framework for addressing cross cutting issues, like climate change, that require major policy contributions from a number of departments. Work is ongoing to develop new PSAs, that will be announced as part of the 2007 Spending Review. These will focus on the highest priorities to address the government's long-term challenges, which include:

    "increasing pressure on natural resources and the global climate, requiring action by governments, businesses and individuals to maintain prosperity and improve environmental care"


International mitigation and adaptation

  33.  The UK's strategy to achieve its international objectives is set out in the Climate Change Strategy Framework and affirmed in Chapter 1 of the Energy White Paper published on 23 May 2007. The key objectives are to ensure security of energy supply and accelerate the transition to a low-carbon global economy, by:

    —    promoting open, competitive energy markets;

    —    encouraging global investment in low carbon technologies;

    —    taking action to put a value on carbon emissions;

    —    promoting policies to improve energy efficiency;

    —    building resilience through managing impacts and encouraging adaptation to unavoidable climate change; and

    —    securing international agreement to a realistic, robust, durable and fair framework of commitments for the post-2012 period

  34.  These objectives are inter-related, mutually reinforcing and must be pursued in parallel not in sequence. The challenge is to urgently put in place a framework of mutually reinforcing policy signals powerful enough to trigger the necessary investment shift. We must also prioritise action to reduce the 18% of emissions which come from deforestation.

  35.  The strategy confirms the UK's commitment to support developing countries to adapt to the unavoidable effects of climate change. We will do this through funding for development assistance, access to better information and research on climate risks and how to ensure their development is resilient to climate change.

  36.  This strategy is supported by a work programme which guides policy co-ordination across Government and drives the UK's engagement within international negotiations and across the world. It focuses on those countries with the highest emissions and those that have the greatest impact on the actions of others. The delivery of a stable climate, as an essential public good, is an immediate security, prosperity and moral imperative, not simply a long-term environmental challenge. We must support this by continuing to lead by example, using initiatives like the Energy White Paper and the Climate Change Bill.

Domestic mitigation

  37.  The Climate Change Programme, prepared under Article 1 of the UNFCCC, is the UK's key strategy for its work on tackling climate change. It sets out the UK's approach to reducing domestic greenhouse gas emissions in the short to medium term in six broad sectors:

    —    energy supply;

    —    business;

    —    transport;

    —    domestic/households;

    —    agriculture, forestry and land management; and

    —    the public sector (including local government.

  38.  It also set out how the Government aims to encourage a change in individual and collective behaviour that is fundamental if we are to move to a low carbon economy, as well as covering our priorities for action internationally and for adapting to the impacts of climate change.

  39.  There are also various sectoral strategies that are included, feed into or flow from the Programme including the Energy Efficiency Action Plan (currently being reviewed) and ones on Carbon Abatement Technologies, Combined Heat & Power (CHP), Microgeneration, transport strategies, Climate Change Communications and the recently announced Biomass strategy.

  40.  The results of the Energy Review published in July 2006 looked to inform decisions about how we can achieve our two long-term energy challenges of tackling climate change by reducing carbon dioxide emissions both within the UK and abroad; and ensuring secure, clean and affordable energy as we become increasingly dependent on imported fuel. The recently published Energy White Paper sets out a framework to deliver a secure, low carbon energy mix for the UK. It announces specific measures that will ensure individuals, businesses and Government reduce their carbon emissions and save energy. There has been extensive collaboration across government in their preparation.

  41.  This collaboration has been underlined by the success of the Interdepartmental Analysts Group at ensuring consistency between different departments, as recognised by the NAO when it reviewed the use of cost effectiveness analysis, and demonstrates that the different parts of government can and do work effectively together. The Energy Review and Energy White Paper process, for example, used the approach to cost-effectiveness analysis and the technical guidance developed in the review of the Climate Change Programme.

  42.  The Government's strategy for addressing climate change will be underpinned by the proposed Climate Change Bill. The draft Bill, subject to Parliamentary approval, will provide a legal framework to manage future emissions, and form a fundamental part of the UK's strategy to address the issues raised by the Stern Review. The Climate Change Strategic Framework, published by Defra alongside the Bill, sets out the broader context for the Bill, highlighting some key announcements central to the Government's strategy for tackling climate change—in particular the Energy White Paper, the Waste Strategy and the Planning White Paper. And it gives the broader international context, where the UK will continue to press for action through the EU, the G8 and the United Nations Framework Convention on Climate Change (UNFCCC)—recognising that only collective action can ultimately solve this unique global challenge. In summary, the Bill will:

    —    mke challenging carbon dioxide reduction targets for 2020 and 2050 legally binding;

    —    introduce a system of "carbon budgeting" capping emissions over five-year periods—with three budgets set ahead to help businesses plan and invest with increased confidence;

    —    create a new independent body to advise on the setting of carbon budgets and to report on progress;

    —    contain enabling powers to make future policies to control emissions quicker and easier to introduce; and

    —    introduce a new system of Government reporting to Parliament including on climate change adaptation policies.

Domestic adaptation to unavoidable climate change

  43.  The Climate Change Programme also sets out the UK's strategy to adapt to unavoidable climate change. One of the key tenets of our approach is the development of a climate change Adaptation Policy Framework (APF), which will set out the appropriate responsibilities and activities across a range of organisations in a sector by sector approach.

  44.  Once in place, the APF will provide the structure in which adaptation strategies can be integrated into policies developed by organisations at every level of decision making. Not only will the APF set out a rational structure for different roles and activities in adaptation, it will also be a primary information source for those involved in policy development and provide an indication of priorities for the private sector.

  45.  To inform the development of domestic adaptation policy, Defra funds a range of research on impacts and adaptation. Defra also funds the UK Climate Impacts Programme (UKCIP) which acts to help prepare organisations for the impacts of climate change. UKCIP coordinates research and provides information and guidance to decision makers, including a range of online tools to inform the development of adaptation strategies. UKCIP and Defra are currently working with the Met Office Hadley Centre to update the current set of UK Climate Change Scenarios for the UK. The new scenarios will be published in 2008 and will be instrumental to studies on climate change impacts and for decision making on how to adapt to climate change.

Effectiveness of UK's international strategy

  46.  The UK is global leader on climate change and, although it is difficult to formally evaluate international influence, we can point to solid and substantial recent achievements. The Spring European Council showed significant developments at the European level and real leadership by the EU—with the UK as a crucial player. The EU committed to reduce greenhouse gas emissions by 30% below 1990 levels by 2020 as part of an international agreement and agreed an independent commitment to cut emissions by at least 20% by 2020.

  47.  In the G8, we have seen recent Presidencies and Summits build on our climate change objectives, which we began to set out at Gleneagles in 2005. The United Nations Framework Convention on Climate Change made progress at Nairobi in 2006, and we have clear objectives for 2007.

  48.  There is still a long way to go, and the UK must maintain its effective global leadership. The cross-departmental International Climate Change Work Programme is the vehicle for co-ordinating and managing activity on international climate change. Led by Defra, it ensures that policies are prioritised and focused on outcomes, deals with the distribution of information across government and manages programme risks. It co-ordinates key policy initiatives on post-2012 future frameworks, investment, technology, carbon markets, deforestation/land use and adaptation, as well as embedding our work on international influencing and evidence-building. Therefore we regularly review the effectiveness of our strategy, and the outcomes it is achieving—with one recent development being the new closer governance between climate change and energy policy issues. We welcome the views of the Committee as we move forward.

Effectiveness of the UK's domestic strategy

  49.  As a result of this programme of action we are projected to meet and significantly exceed our Kyoto commitment and reduce our greenhouse gas emissions to about 23% below 1990 levels by 2008-12. We are currently projected to reduce our CO2 emissions by 16.2% by 2010, against a 20% target.

  50.  Estimates indicate that, without the policies and measures in the Climate Change Programme greenhouse gas emissions in 2004 could have been some 15 per cent higher, rather than almost 15 per cent lower, than base year levels. The total annual reduction of all greenhouse gases since the base year is therefore estimated at about 30 per cent of base year emissions or some 65 million tonnes of carbon in 2004.


  51.  Critical to the delivery of our climate change programme, specialist staff are extensively deployed across Departments in policy development related areas of climate change—including scientists and economists which have between them substantial expertise in the area. They work closely with—and are generally embedded in—the policy teams responsible for developing strategies and specific instruments for combating climate change.

  52.  Because both the science and economics of climate change is evolving rapidly, professional training and development is often through in-government and academic seminars: for example the Stern Review involved economists and scientists from a wide range of Departments and used a range of fora to debate and develop its analysis.

  53.  Specialist resource is already deployed across and shared by Departments working on climate change. In particular substantial cross-departmental project work takes place between DTI, Defra, HM Treasury and DfT; also involving DCLG, DfID, No 10, CO and FCO, among others, as appropriate. The development of the Energy White Paper, and work on European Councils and G8 summits are good examples of strong collaborative working between Departments, including joint peer review of scientific and economic analysis.

  54.  Defra and the OCC are developing best practice in policy development to ensure that specialist knowledge and expertise is deployed and presented more consistently within and between departments. This will help to ensure that expertise is more readily deployable across Departments to where it is needed; and will allow easier and more robust peer review.

  55.  In assessing the desirability of frequent circulation of specialist staff between roles and departments, it is important to distinguish between "deep subject knowledge"—where retention of individuals is an important part of an effective knowledge management system; and analytical expertise which can be applied effectively across sectors and policy remits. We recognise the importance of striking the right balance between retaining experts with deep subject knowledge, and an adequate level of turnover to ensure that we bring fresh thinking, innovation and new analytical expertise to the area. Recent recruitment exercises suggest that we are well placed to recruit world-class experts to contribute to this field.

  56.  Importantly, government departments have no monopoly on expertise and innovation. A critical part of our approach to developing the evidence base and policy is through the strong working relationships and networks we seek to build with experts outside government, in the UK and beyond. This consistently renews and enriches our thinking.

June 2007

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