House of Commons - Environmental Audit

Select Committee on Environmental Audit Seventh Report

Effectiveness of annual targets and reports

45. The recent SDC report revealed a number of flaws in the implementation of policy, for instance:

Overall performance on procurement 'Quick Wins' [a set of mandatory minimum environmental standards for the procurement of a variety of goods] is hugely disappointing given that they were introduced in 2003. Only 12 of the 21 departments reported that they included clauses on Quick Wins in all relevant contracts

Just 46 of the 351 new build/refurbishment projects completed in 2006/07 were assessed against the Building Research Establishment Environmental Assessment Methodology (BREEAM) [mandatory for all public sector building projects since 2002]. Of these, only 28 projects (i.e. 8% of all completed projects) met the required standard

Only a quarter of the government estate is currently covered by an Environmental Management System (EMS) [i.e., a system which provides managers with information on environmental performance]

Only 10 of the 21 departments indicated that their Permanent Secretaries have the SOGE targets incorporated into their performance agreements

Major problems persist on data collection and accurate reporting, particularly on travel, waste and water. This undermines the government's ability to assess and manage its own progress accurately [51]

46. Appearing before us, the SDC did highlight some promising recent developments. Notably, the Government appears to be significantly improving its information systems:

The property benchmarking scheme was made mandatory for all departments on 1 April 2008, which means they have to collect data and feed it into ePIMS [a software package] for every building over 500 metres squared. This can then directly be pooled in real time to a report that can be downloaded quarterly or weekly and it will give departments a real view. Instead of just waiting for us to produce this report 13 months after the year end, they can know in real-time what their performance is and take steps to improve it as quickly as possible.[52]

47. By highlighting patchy information systems and lack of compliance with mandatory policies, the SDC's report reveals fundamental failings in the Sustainable Operations on the Government Estate target and monitoring regime, raising questions about its ability to effect progress and to hold failing departments to account. At the same time, we recognise that Office of Government Commerce is taking steps to improve these systems, notably the collection of real-time data from Government buildings. We look forward to seeing considerable improvement in performance as a result in the next two years. In particular, if the new role for OGC, including the Centre of Expertise for Sustainable Procurement, is to mean anything, we expect to see a sharp rise in compliance with mandatory policies such as "Quick Wins".

Scope of the SOGE regime

48. One of the most important issues raised by the SDC was its concern that, as the volume of Government operations that are transferred to arm's length bodies or the private sector increases, so the coverage of the Government's sustainable targets and reporting regime will shrink—unless Government ensures that departments continue to collect data and exercise control over the environmental management of these operations.[53] The evidence suggests there is a large scope for improvement in this.

49. One of the key findings in the latest SDiG report is the extent to which compliance with the SOGE regime is mixed among organisations that are a part of central Government, but not core Government departments. The SDC told us: "A lot of non-ministerial departments are not covered at all."[54] 15% of executive agencies did not submit data to the SDC last year, despite the fact that coverage of all executive agencies is mandatory. Only six of 500 non-departmental public bodies (NDPBs) reported their data individually; while it is possible some of the remainder submitted their data to their parent departments, the SDC states: "Unfortunately, it is unclear how many NDPBs have been covered under core departments' returns."[55] On this point, Helen Ghosh could only say that "some [NDPBs] are adhering to similar targets."[56] The Environment Agency, the Association for the Conservation of Energy, and the Environmental Industries Commission, all called for SOGE targets to be made mandatory for all NDPBs.[57]

50. We find it unacceptable that 15% of executive agencies do not report performance against their Sustainable Operations on the Government Estate targets, even though this is mandatory. OGC must ensure that all executive agencies report to the SDC each year. All executive NDPBs either report their performance separately, or do so within individual subsections of their parent departments' reports.

51. The report by the NAO drew attention to the discarding in 2006 of a target that had required departments to incorporate "energy clauses into PFI and contracted-out service provision".[58] The SDC reported the impressive statistic that: "Sustainability clauses are included in 99.9% (by value) of all Facilities Management contracts, and 95.38% (by value) of IT contracts".[59] However, it also noted that anecdotal evidence suggests that such clauses are not actively managed to drive forward sustainable development.[60] The Government officials we spoke to were very confident that outsourcing did not lead to a reduction in monitoring and control of environmental performance:

[…] 95 per cent—and there is still 5 per cent we have to tackle—of all IT outsourced FM contracts and property outsourced FM contracts have got sustainability clauses in them. They are very definitely on the ePIMS database of government property, so we collect the information, and they will be part of the benchmarking service, so we can look at the relative performance of different buildings in the estate. So the answer is most definitely they are included.[61]

52. We welcome the Government's commitment to ensuring that all outsourced operations are retained within the Sustainable Operations on the Government Estate regime, with their environmental performance subject to their contracting department's target and reporting requirements. At the same time we note that this only applies to outsourced operations that take place on property owned by Government bodies. We recommend that the Office of Government Commerce reviews the practicalities of the Government's mandating suppliers of services not based on site to report their environmental data in respect of these contracts.

53. Because the SOGE regime relates to central Government only, it excludes major parts of the public sector such as NHS bodies, local authorities, schools, and police authorities. The SDC told us that a lot of work was going on to improve sustainability within health bodies, but that there was no equivalent to the SDiG report, setting out performance across the NHS. Helen Ghosh told us: "The wider public sector—local government, schools, the NHS—is explicitly not covered by the SOGE targets but there are all sorts of other mechanisms which other departments will be able to answer for on how they are, nonetheless, really driving through sustainability."[62] Sir Ian Andrews added: "My understanding is that those are consistent with SOGE targets but they are not within the remit of the estate."[63] While we are encouraged to learn that there is much activity to improve the sustainability of other parts of the public sector, the fact remains that there are no systematic and comprehensive assessments of progress. In the interests of public accountability, and in order to help to drive up performance consistently throughout the public sector, we recommend that OGC, relevant departments, and the SDC develop comprehensive annual assessments of progress in important sectors such as NHS bodies and schools.

54. The Houses of Parliament, too, should be taking a lead in addressing climate change. We believe it would be appropriate for Parliament to adopt a set of targets, equivalent to those applied to Whitehall departments, and to report progress against them in an annual report. While we recognise the problems of working with an historic listed building as a major part of the estate, we do not believe this excuses Parliament from its duty to give a lead to the nation which it represents.

55. We will therefore be drawing this report to the attention of the House of Commons Administration Committee; Mr Speaker, as Chairman of the House of Commons Commission; the Chief Executive of the House of Commons Service; and the Director of Facilities. We invite the House of Commons Commission and the Administration Committee to consider how to ensure the House of Commons sets and meets demanding targets for improving the sustainability of the Parliamentary Estate, and for reporting its performance annually.

The role of the Sustainable Development Commission

56. In 2005 the Government handed publication of the annual SDiG report over to the SDC, as a feature of the UK Sustainable Development Strategy. As the Government explained: "To show we are serious about delivery, we will stop reporting our own progress and hand that task over to a strengthened Sustainable Development Commission, which will act as the independent 'watchdog' of government progress."[64] The recent SDiG report, published in March 2008 and covering performance in the year 2006-07, was the third to be published by the SDC. This is the first occasion we have examined an annual SDiG report since these new arrangements came into effect.

57. We asked the SDC for its own assessment of the impact it has had on Government performance. Sara Eppel, SDC director of policy, said that giving publication of the SDiG report to an independent watchdog had focused more attention on Government performance and stimulated a significant response:

Previously government reported on itself and their ability to make the figures look less critical than they are is obviously quite easy […] I think the reaction we have had from government this year particularly has been very significant. Personally I feel that the Cabinet Secretary having to defend this element of government's delivery for a second year running was just a step too far. Last year the Cabinet Secretary did get very upset about and annoyed about the fact that progress did not seem to be being made on these figures, and the same message effectively was coming back from us as an independent body for another year, and that definitely created quite a big reaction at the centre of government.[65]

Considering the significant nature of the Government's response to this year's SDiG report, we agree that the Sustainable Development Commission is playing a significant role in stimulating Government to improve its performance.

58. At the same time, we recommend that the SDC reviews whether its presentation of performance in the annual SDiG reports could be made more straightforward, including—where necessary—being more critical. WWF, for instance, suggested to us that "the simple star rating system used by SDC is quite deceptive":

[T]he SDC assessment makes little distinction between the relative importance of different targets which renders the overall conclusions misleading. The indicators of success or progress are not comparable in importance despite being given an equal points rating. For example a hard indicator such as an actual emissions cut is given equal weight to a soft indicator such as the Secretary of State having sustainability written into his/her performance agreement. […] Furthermore the assessment ratings do not adequately represent the true situation. The lowest grade available is 'Poor or no progress'. This is given when in fact there is negative progress. Hence the results do not represent that in many areas Government operations have not just failed to progress in their sustainability but have gone backwards.[66]

59. In response to these points, Farooq Ullah of the SDC explained that the SDiG reports give departments two separate star ratings—one based on performance against SOGE targets, the other based on an assessment of what mechanisms they had in place to make progress against those targets—and suggested that WWF might be confusing them. We suggest, in this case, that WWF would not be alone. Furthermore, we questioned the tone of the report's "Headline" finding, that included the words "government as a whole is generally performing better this year than last year",[67] when emissions from civil departments had risen 22% over the baseline. Sara Eppel said, "We took the view that if you want to change people's behaviour, just shouting at them only gets you so far and we have done quite a lot of shouting",[68] but we believe that where performance in important categories is weak this has to be given proper emphasis. We recommend that the SDC looks again at its practice of simply reporting the data as given to it by departments. Currently, where it has reservations about the figures, it only expresses these in separate commentary sections. For example, the SDC's press release on the recent SDiG report stated that "overall carbon emissions from offices have fallen by 4% since 1999",[69] despite the fact that this figure had been discredited elsewhere in the report.