Memorandum submitted by the Department
for Environment, Food and Rural Affairs
DEFRA'S 2007 DEPARTMENTAL ANNUAL REPORT RESPONSE
TO THE EFRA COMMITTEE'S PRELIMINARY QUESTIONS (PART ONE)
CAPABILITY REVIEW
1. Could the Department provide copies of
the action plans under which it is taking forward the recommendations
of the Capability Review (CR)?
The Renew Defra plans are enclosed.[1]
They highlight the activities relating to the Capability Review.
2. How is the Department addressing the four
`urgent development areas' identified in the CR (ignite passion,
pace and drive; take responsibility for leading delivery and change;
plan, resource and prioritise; and manage performance)? In particular:
— What resources has the Department
allocated to responding to the challenges set out in the CR?
Action to respond to the Capability Review is
embedded within the Renew Defra Programme, an ambitious change
Programme aimed at transforming the way Defra operates, creating
a department where people and resources can be moved quickly and
flexibly and work is undertaken more collaboratively and efficiently.
The response to the four urgent delivery areas is found in the
programme plans.
A budget of £10m has been allocated for
the Financial Year 2007-08, though we will be looking to spend
well within that headroom.
An OGC Gateway 0 Review recently carried out
reached the following conclusions:
"This challenging business transformation
programme seems to us to have the potential for achieving successful
outcomes where previous attempts have failed.
The programme's strengths include inspired leadership
from the top (with the Permanent Secretary as SRO), an excellent
Programme Director, some excellent programme staff and considerable
support from staff in core Defra.
Some particular examples of good practice we
have found are:
— the cracking pace which
has been set for the programme, including a projected end-date;
— the bringing together of
a wide range of Departmental and wider Government initiatives
into a single transformation programme;
— the distillation of a wide
spectrum of transformation activity into five coherent workstream
areas;
— the emphasis on high performance;
and
— the emphasis on flexibility
in staff deployments.
Although the challenges which lie ahead are clearly
considerable, the programme seems to us well-paced to deal with
them. The greatest immediate challenge is to deliver the headcount
reduction target set for 31 March 2008, with further reductions
in the following six months.
No less important for the Department will be
delivery of the other programme objectives on a basis that will
be sustained. As the Programme Team recognise, early and visible
progress will be needed on these so as to sustain momentum and
meet the exacting programme timetable. Renew must not be seen
as essentially a headcount reduction exercise".
A full copy of the report is enclosed (Appendix
C to the report summarises the recommendations).[2]
What has been done to strengthen the Board, especially
its ability to prioritise?
Over the past year, four new executive Board
members have been appointed (and a new Chief Scientific Adviser
will be arriving in the Autumn). The new appointees are the DG
Solicitor, the DG Climate Change, the DG Natural Environment,
and the Finance Director. (The latter is currently a highly experienced
Interim, who will be with us until the end of this financial year,
in which time we will appoint a permanent replacement). The new
DGs come with a range of highly relevant experience from other
Government departments, and two have been members of the Cabinet
Office's highly regarded High Potential Development Scheme.
We have also redefined and reallocated the roles
of existing DGs to give a greater focus to the work of the Board.
In particular, the creation of a new DG for the Strategy and Evidence
Group enables us to pull together our strategy and business planning
activities more effectively.
Additionally, we have appointed two new Non-Executive
Directors:
— Janet Grossman—she is Operations
Director at the Pensions Service in DWP and has experience of
leading organisations through significant periods of modernisation
and change. Janet brings to Defra her operational expertise in
large scale transformation and service delivery in the public
and private sectors.
— Poul Christensen—Deputy Chair
of Natural England, a farmer and business man, who will bring
both his experience as a customer and as a Board member of one
of our key NDPBs.
The development areas that were highlighted
in the Capability Review have led the Management Board of Defra
to embark on a Board Development Programme. This includes a range
of activities to improve the effectiveness of our formal and informal
meetings, and to identify the collective and individual development
areas for the Board through 360 degree feedback.
How is the Department responding to the concerns
regarding the pace of Defra's operations and its understanding
of business? Have Key Performance Indicators (KPIs) been formulated
to incentivise the right behaviour in this respect?
The Capability Review did not criticise the
overall pace of our delivery operations (indeed it was not looking
at the performance of individual delivery bodies). It was concerned
that the Renew Defra programme should be delivered at a pace—as
the Gateway Review has confirmed that it will be.
One of the strands of the Strategy Refresh work
we did last year was to look at our relationships with the business
community and on how we could better engage them across the range
of our policy responsibilities. That work will now be taken forward
by a newly appointed Customer Focus and Better Regulation Director.
As part of developing our new policy process
we will be looking to ensure much greater involvement of delivery
agents early on in policy making. Our new business planning and
corporate performance management processes will also be rolled
out to cover key delivery partners so that the Management Board
and Ministers have a clear view of performance across Defra's
key business areas.
What action is Defra taking to achieve the new
Investors in People (IiP) standard?
In May 2006 Defra completed a full IiP review
against the new version of the Standard. The assessor concluded
that the Standard was not fully met and, as a result, an action
plan was developed. The action plan was endorsed by the Capability
Quality Limited (CQL) Recognition Panel and Defra is currently
in the middle of a 2-year period of Retaining Recognition.
In February 2007, Defra opted to undertake a
further progress review. The conclusion of the assessor at this
time was that some progress had been made since May 2006; however,
more time was required to embed changes into working practice,
in particular to improve our induction processes and planning
and evaluation of staff learning and development.
In May 2007 a revised action plan was prepared
by Defra and submitted to the CQL Recognition Panel proposing
that Defra should remain in Retaining Recognition with a further
and final review in May 2008.
How is the Department improving its financial
management capability?
We have:
— appointed a new (Interim) Finance
Director;
— revised our Financial Control Framework
to provide the basis for improved financial discipline and control;
and
— ensured that all Board members understand
the financial context in which we operate, by holding a financial
management seminar.
We will:
— devolve budget management to Director
level (rather than Director General level), providing closer control
and management of funds. This will be supported by improved financial
management reporting;
— continue to develop and strengthen
existing arrangements for Management Board review and consideration
of financial issues, including the development of compliance
and exception reports in support of the existing variance
analysis reports.
We are also implementing, or strengthening,
the processes:
i. to control Headcount, in particular
though payroll modelling and monitoring, and by accelerating exits
under the Renew programme;
ii. to control Capital Expenditures through
enhanced governance arrangements, building on proposals outlined
in the Comprehensive Spending Review Asset Management Strategy,
and with early emphasis on reviews of IT spend;
iii. to constrain all discretionary spend
pending resolution of balanced budgets;
iv. to improve Performance Management for
personnel, Core Defra operations and our Delivery Bodies;
v. to improve Business Planning through
integration with a devolved project approvals process and a more
outcome focused resource allocation exercise;
vi. to review Balance Sheets, and in particular
to ensure that no asset impairments will be carried forward into
2008/09; and
vii. to reduce costs through additional procurement
efficiencies.
We have also taken steps to improve, and will
continue to strengthen, our annual Business Planning exercises.
Changes will in particular ensure more explicit consideration
of, and reconciliation to, all Treasury Budget Control totals
as a paramount feature of that work. We will also bring forward
the date by which budget allocations will be set (to reflect those
totals) each year, so that these are reconciled and loaded into
our systems and COINS before the start of the financial year.
In the longer-term, we will continue with work to integrate and
improve our systems and processes for financial control and forecasting.
FINANCIAL MANAGEMENT
Main Estimate 2006-07 and 2007-08
3. Could the Department provide a breakdown
of the Departmental Expenditure Limits (both voted and non-voted)
for 2007-08. This breakdown should include:
— a monthly planned profile of expenditure
by Estimate sub-heads;
— a separate monthly profile for
Administration expenditure;
— a narrative explaining the key
risks which the Department has identified to the budgets in 2007-08.
Budgets for 2007-08 were agreed and loaded on
Defra's accounting system and the shared database with HM Treasury
(COINS—Consolidated On-line Information System) when budgets
for 2006-07 and 2007-08 were agreed in 2006. However, these are
currently under review to reflect the latest outlook for the year
and, more fundamentally, to align budgets to the new organisational
structure that has emerged from the Renew Defra programme. Profiles
to the level of detail as requested will be made available to
the committee as soon as possible.
In terms of risks identified to the 2007-08
budget, the primary risk is, as always, the capacity of Defra's
finite DEL budget to cope with continuing demands and unforeseen
circumstances, as the recent exceptional flooding incidents demonstrated.
An added risk this year, is the Department's ability to reduce
its Administration costs in line with the targeted headcount reductions,
as there is a systemic time-lag between the release of staff and
the resultant savings to Administration costs. The Permanent Secretary
will be able to update the Committee at the hearing on 18th July.
4. Could the Department provide the final
outturn for 2006-07, profiled in a similar way to the 2007-08
Departmental Expenditure Limit requested above.
The final outturn figures for 2006-07 will only
be available once the resource accounts are certified. We will
share these figures with the committee as soon as possible.
Defra's apparent capital over-spend in 2006-07
Page 171 of the Departmental Report 2007
states:
The estimated capital out-turn for 2006-07
is more than the budget made available in the Spring Supplementary
Estimate. The transfer of capital grants from resource to capital
increased pressure in this area, coupled with uncertainty around
a number of programmes.
5. Why did the (a) transfer of grants from
resource to capital and (b) uncertainty on programme numbers create
an expected capital over-spend in 2006-07?
The Resource Budgeting Guidance 2006-07 introduced
a distinction between current and capital grants which did not
exist in prior years. In a handful of programmes it has not been
easy to distinguish in advance whether certain work should be
categorised as current or capital under this change, and this
will continue to be the case.
6. Why was the over-spend not identified in
time for provision to be made available in the Spring Supplementary
Estimate 2006-07?
This was a technical change that did not materially
affect the overall DEL outturn and the Environment Agency contained
its costs within (or close to) overall budget. Under Flood Protection,
the Environment Agency undertakes a range of work, some of which
is classified as capital works expensed in year (and similarly
the treatment of capital grants, to distinguish it from the creation
of a tangible fixed asset to be depreciated in future years).
It was only on reviewing the range of flood protection work undertaken
in the run up to year-end that the Agency was able to identify
that a larger proportion of works should have been categorised
as capital work expensed in year rather than current expenditure.
The change in categorisation from current to capital was on-going
and not completed until March, too late to have been incorporated
in the Spring Supplementary Estimate for 2006-07. The re-categorisation
was also under review by the NAO at the time and has been concluded
to their satisfaction.
7. Do the latest out-turn figures confirm
an over-spend on capital?
Yes. The level of overspend on Capital DEL was
£38.215m.
RPA disallowance provision and Resource Accounts
Defra's 2005-06 Resource Accounts were supposed
to have been laid before the summer recess of 2006; instead the
accounts were laid in November that year. The Department again
is supposed to provide this year's Resource Accounts before the
summer recess.
8. When does the Department expect to publish
its Resource Accounts for 2006-07?
The aim is to publish the accounts by the summer
recess, although this is looking increasingly unlikely.
9. What is the agreed Rural Payments Agency
provision on the 2006-07 balance sheet (if now agreed with the
National Audit Office)?
— How does this amount break down into
the disallowances expected for each of the relevant financial
years?
— What levels of disallowance have been
provided for in each of the financial years?
— What progress has been made with the
European Union on agreeing the final disallowed amounts for each
of the relevant financial years?
The provision for disallowance in the 2006-07
resource accounts is still being audited by NAO and so the figures
given below have yet to be agreed.
The total proposed provisions are £344.9m
of which £150.2m was provided in 2005-06 and £194.7m
in 2006-07.The provision is for potential disallowance in respect
of SPS 2005, SPS 2006, other CAP schemes and also an amount for
CAP scheme payments made by the devolved administrations.
The European Commission have not yet made any
proposals in regard to potential disallowance for either SPS 2005
or SPS 2006, but they have done so in regard to some of the other
schemes for which provision has been made. Should any proposals
be made, the Government will continue to defend the UK's interests
with the aim of ensuring that any proposals are minimised to the
fullest possible degree; indeed one EC proposal is being contested
at the Conciliation Body in July.
In addition to the provisions, accruals of £73.5m
(£17.4 in 2005-06 and £56.1m in 2006-07) have been made
in respect of disallowance for the Fruit and Vegetable Operational
Programmes and late payment penalties for SPS 2005 to 31 March
2007.
10. What is the financial position of the
contingent liability, in relation to the Rural Payments Agency,
at the end of 2006-07?
Contingent liabilities of £113.8m are in
respect of potential additional late payment penalties for SPS
2005 and potential increased disallowance for SPS 2005 and SPS
2006. These are also still subject to audit.
Comprehensive Spending Review 2007 and new PSA
targets
11. How are the CSR 07 negotiations progressing
with Treasury? Are you anticipating or have you agreed any reductions
in resources for the CSR 07 period from 2007-08 levels?
Negotiations with Treasury on the Department's
Comprehensive Spending Review 2007 settlement are progressing
well, but are ongoing. Our assumption is that the details will
be announced in the Autumn.
The Department has previously provided the Committee
with drafts of its two PSA targets for the CSR 07 period: first,
in its Response to the Committee's report on Defra's Departmental
Report 2006 and, second, during the Committee's visit to Nobel
House on 15 May 2007 to discuss the Capability Review with Defra
officials.
12. Could the Department provide the latest
draft of its new PSA targets? What progress has been made in developing
indicators for the targets?
The new Defra led PSAs will be finalised as
part of the CSR. Defra is working hard with other departments
to ensure they cover the full range of action across government
to address issues of climate change and protecting and enhancing
the natural environment, including developing an effective suite
of indicators to monitor progress towards delivering the PSAs.
PSA TARGETS
PSA Target 1: Promoting sustainable development
Public Service Agreement target 1: Promoting
sustainable development
To promote sustainable development across
Government and in the UK and internationally, as measured by:
— the achievement of positive trends
in the Government's headline indicators of sustainable development;
— the UK's progress towards delivering
the World Summit on Sustainable Development commitments, notably
in the areas of sustainable consumption and production, chemicals,
biodiversity, oceans, fisheries and agriculture; and
— progress towards internationally
agreed commitments to tackle climate change.
In evidence to the Committee in 2006, the
Department provided data on the measures used for PSA target 1
broken down by priority area (Second Report of Session 2006-07,
Defra's Departmental Report 2006 and Defra's budget, HC 132, Ev
8).
13. Could the Department provide data on the
measures used for PSA target 1 (Sustainable Development) broken
down by priority area?
Summaries of sustainable development indicators
(as presented in Sustainable Development Indicators
in Your Pocket 2006)
ALL INDICATORS
Compared with the position in 1999, 53 measures
show improvement (representing over half of those for which it
is possible to make an assessment), and 24 show little or no change.
A wide range of measures show improvement including
renewable electricity, emissions of air pollutants, manufacturing,
service and public sector emissions, waste recycling, agricultural
emissions and land stewardship, biodiversity loss, river water
quality, land recycling, community participation, vehicle crime
and burglary, fear of crime, poverty measures, mortality rates,
road accidents, housing conditions and fuel poverty, rough sleepers
and local environmental quality.
Those measures showing deterioration since 1999
are specifically:
— aviation emissions of greenhouse
gases;
— fossil fuels used for electricity
generation;
— nitrogen oxide emissions from electricity
generation;
— carbon dioxide emissions from:
— energy supply (consumption exceeding
UK production);
— water loss through leakages;
— household waste arisings;
— extent of sensitive areas affected
by excessive nitrogen from air pollution;
— infant mortality gap (between highest
& lowest rates);
— children walking to school;
— ozone pollution in urban areas; and
— households living in temporary accommodation.
SUSTAINABLE CONSUMPTION
AND PRODUCTION
Indicators for sustainable consumption and production
mainly cover emissions, resource use and waste.
Eighteen measures (over half) show improvement
compared with 1999. Those showing improvement include emissions
of air pollutants, manufacturing, service and public sector emissions,
waste recycling, agricultural emissions, river water quality,
and land recycling.
Measures showing deterioration since 1999 are
greenhouse gases from aviation, carbon dioxide emissions from
households, private vehicles and road freight, water leakage and
household waste arisings.
CLIMATE CHANGE
(based on 14 of 23 measures, comprising 14 indicators)
Indicators for climate change and energy mainly
cover greenhouse gas emissions, electricity generation and energy
supply.
Seven measures show improvement since 1999 and
seven show deterioration.
Those showing improvement since 1999 include
renewable electricity, sulphur dioxide emissions from electricity
generation, carbon dioxide emissions from manufacturing, service
and private sectors, and methane from agriculture.
Those showing deterioration include aviation
emissions of greenhouse gases, energy supply, nitrogen oxide emissions
from electricity generation and carbon dioxide emissions from
households, private vehicles and road freight.
PROTECTING OUR
NATURAL RESOURCES
AND ENHANCING
THE ENVIRONMENT
Changes in sustainable development measures since
1990 and 1999
Indicators for natural resources protection
mainly cover wildlife and biodiversity, farming, land use, fish
stocks, air pollution and rivers.
Fifteen measures show improvement since 1999
and one deterioration.
Those showing improvement since 1999 include
biodiversity loss, farming management and emissions, land recycling,
air pollution, the impact of acidification from air pollution
and river water quality. Bird populations show little change.
The extent of sensitive areas affected by excessive nitrogen from
air pollution increased, representing a deterioration.
SUSTAINABLE COMMUNITIES
Indicators for creating sustainable communities
mainly cover poverty, health, crime, access, mobility, and local
and domestic environments.
Twenty-six measures (over half of those for
which there are data) show improvement since 1999, 15 show little
or no change, and seven show a deterioration.
Those showing improvement include poverty and
housing conditions, educational attainment, employment, vehicle
crimes, burglary, fear of crime, mortality rates, airborne particulate
pollution, and deaths and injuries caused by road accidents.
Those showing deterioration include robbery,
the gap in infant mortality rates between socio-economic groups,
child obesity, walking and cycling and ozone pollution in urban
areas.
Sustainable Development Indicator traffic light
assessments
(as presented in Sustainable Development Indicators
in Your Pocket 2006. Updates to all the indicators will be published
in Sustainable Development Indicators in Your Pocket 2007 on 31
July, after which time it will be possible to provide the Committee
with an updated summary of the indicator assessments.)
|
| Number of indicator measure "traffc light" assessments in PSA1 reporting
|
| | | Priority area
| | | |
| | |
| Sustainable consumption & production
| Climate change & energy
| Protecting our natural resources
| Creating sustainable communities
| Total(1)
|
| from 1990
| from 1999 | from 1990
| from 1999 | from 1990
| from 1999 | from 1990
| from 1999 | from 1990
| from 1999 |
|
| Red: clear deterioration | 6
| 6 | 5
| 7 | 1
| 1 | 7
| 7 | 16
| 17 |
| Amber: little or no change | 1
| 5 | 1
| 0 | 3
| 4 | 5
| 15 | 9
| 24 |
| Green: clear improvement | 20
| 18 | 8
| 7 | 12
| 15 | 18
| 26 | 45
| 53 |
| Insufficient data or measures to be developed
| 3 | 1
| 0 | 0
| 8 | 4
| 22 | 4
| 31 | 7
|
| Total measures in PSA1 reporting |
30 | 30
| 14 | 14
| 24 | 24
| 52 | 52
| 101 | 101
|
| Measures not used for PSA1 reporting (2)
| 19 | 19
| 9 | 9
| 5 | 5
| 16 | 16
| 26 | 26
|
| Total measures in Strategy reporting
| 49 | 49
| 23 | 23
| 29 | 29
| 68 | 68
| 127 | 127
|
|
(1) Some indicator measures support reporting for more that one priority area. The total is the number of distinct measures excluding this multiple reporting.
(2) Some indicators in the Strategy are for contextual reporting only, in addition some indicator measures are excluded from PSA1 reporting in an attempt to avoid "double-counting", ie, where the measure is used directly as a component in more that one indicator or trends are strongly influenced by or directly reflect other measures.
|
PSA Target 2: Reducing greenhouse gas emissions
Public Service Agreement target 2: Reducing greenhouse
gas emissions
To reduce greenhouse gas emissions to 12.5% below 1990
levels in line with our Kyoto commitment and move towards a 20%
reduction in carbon dioxide emissions below 1990 levels by 2010
through measures including energy efficiency and renewables. A
joint target with the Department of Trade and Industry and the
Department for Transport.
14. What were the Year Two results of the EU Emissions
Trading Scheme (ETS) published in April, and what do they indicate
about the effectiveness of the scheme?
The results of the second year of the EU Emissions Trading
Scheme (EU ETS), which sets a cap on total carbon dioxide (CO2)
emissions from European industries, were released in April this
year.
UK sites covered by the scheme emitted 251.1 million tonnes
of carbon dioxide (MtCO2) in 2006, an increase of 8.8MtCO2, or
3.6%, from 2005. The total UK cap for 2006 was 217.3MtCO2, meaning
that 33.8 MtCO2 were purchased through emissions trading to keep
within the overall cap.
The results also show that in 2006, UK installations were
100% compliant with the scheme's requirements to report emissions
and surrender an equal number of allowances. This outstanding
result reflects the effort made by operators, verifiers and regulators
in meeting the mandatory deadlines and the prompt enforcement
action taken by the regulators against those who were non-compliant
in 2005.
The scheme's first two years have provided a solid base to
build on for the future. The trading mechanism is viable and the
institutional framework sound. However it is important to remember
that emissions trading had never been tried before on this scale.
Phase I has always been a learning by doing exercise. And we've
learned key lessons that will improve the effectiveness of the
EU ETS.
The 2006 results across the EU show that other Member States
had more allowances than needed to cover their emissions. There
is a crucial need for realistic but tough caps to be set consistently
across the EU for future phases. Market scarcity will drive the
carbon price to encourage industry to deliver real emissions reductions
and help to meet the EU's Kyoto commitments.
We are greatly encouraged by the Commission's decisions on
Member States' Phase II (2008-12) National Allocation Plans, which
show a clear determination to ensure real scarcity in the carbon
market and to use the ETS to drive down carbon dioxide emissions
in line with the EU's Kyoto targets.
PSA Target 3(a): Reversing the decline in the number of farmland
birds
Public Service Agreement target 3a: Reversing the long-term
decline in the number of farmland birds
Care for our natural heritage, make the countryside attractive
and enjoyable for all and preserve biological diversity by reversing
the long term decline in the number of farmland birds by 2020,
as measured annually against underlying trends.
Page 51 of the Departmental Report states that the following
three factors indicate the Department is "on course to meet
the farmland birds target":
The rate of decline of Farmland Birds Index will slow
in the period to 2009;
The Farmland Birds Index will become stable during
the period 2009 to 2014; and
The Farmland Bird Index will start to increase in 2014
to 2020.
15. Can the Department provide further evidence to support
the statistical confidence of the trends observed in relation
to PSA Target 3 on Farmland Birds (Departmental Report, p 51)
Research completed in 2001 by the British Trust for Ornithology
and the RSPB produced an agreed methodology to measure the annual
underlying trends in populations (BTO Research Report No. 251).
The methodology enables the production of a smoothed indicator
together with statistical confidence intervals using bootstrapping
techniques showing the long-term trends by combining the 19 individual
species indices (Rooks were added in 2004). In this way the effects
of any short-term fluctuations due to weather or special factors
affecting one or two species are reduced. This methodology is
fully supported by HM Treasury and the National Audit Office.
What is the Department planning to spend on its Entry Level
and Higher Level Environmental Stewardship schemes over the CSR
07 period?
Spending under Environmental Stewardship during the CSR07
period will be dependent upon Defra's final CSR settlement and
formal European Commission approval of our recently submitted
new Rural Development Programme. Until we know the final position
on both, we can only provide indicative budgets for Environmental
Stewardship which may be subject to change. Subject to those caveats,
over the CSR period we are currently planning to spend £560
million on ELS/OELS and £164 million on Higher Level Stewardship.
PSA Target 3(b): Sites of Special Scientific Interest
Public Service Agreement target 3b: Sites of Special Scientific
Interest
Care for our natural heritage, make the countryside attractive
and enjoyable for all and preserve biological diversity by bringing
into favourable condition 95% of all nationally important wildlife
sites by 2010.
In the 2006 Departmental Report, this measure was "on
course". This year's Departmental Report shows there has
been some "slippage", with 75.4% of SSSI in favourable
condition in March 2007 as opposed to the target for that date
of 78%.
Page 53 of the Departmental Report states that "it
will be possible to recover this year's slippage [with the SSSI
target] before 2010". The Departmental Report also states
that Natural England has developed a new on-line reporting system
that "allows major stakeholders to view live data regarding
their own remedies". The system will "reduce the risk
of slippage in future years".
16. What is the revised trajectory for the remaining years
of the SSSI target?
We have not considered it necessary to revise the trajectory
for the remaining years of the SSSI target. The trajectory was
informed by a model developed by English Nature, which estimated
the amount of SSSI land which could be delivered into target condition
each year. Since then, continuing improving data and analysis
have confirmed the trajectory remains achievable in broad terms.
The trajectory represents progress towards the target of
95% through incremental annual milestones of 5 or 6%. The milestones
have been achieved every year until 2007, when there was slippage
of 2.6% against the 78% milestone. This occurred for a number
of reasons, the most significant of which were major organisational
change associated with the creation of Natural England (NE), the
short-term financial moratorium introduced by NE, and under-delivery
by a number of the major SSSI landowning or managing bodies.
The SSSI Programme Board (comprising representatives from
Defra, NE and the Environment Agency) continues to focus on achieving
the 2008 milestone of 83%. The Board is confident that if all
partners deliver their commitments, the area of SSSIs in target
condition by the end of March 2008 will be close to 83%, and that
the 2010 Target of 95% remains achievable.
17. How will Natural England's new on-line reporting system
aid achievement of the target?
NE's new on-line reporting system enables delivery partners
to access NE's SSSI information database (ENSIS). ENSIS contains
data on the condition of all SSSIs and the online system enables
NE and partners to run reports in order to plan delivery and track
progress. For all SSSIs in unfavourable condition, ENSIS lists
the causes of unfavourable condition, the actions required to
deliver favourable recovering condition (otherwise known as "remedies"),
the party responsible for action, and a date for implementation.
Major delivery partners have been working with NE to ensure
that the ENSIS database is up to date and accurately reflects
their planned delivery of remedies. This data enables NE, Defra
and other partners to plan and prioritise effectively in order
to ensure year on year progress towards the PSA target. It will
also allow the SSSI Programme Board to monitor progress against
predicted delivery throughout the year and to address any problems
that occur.
PSA 4: Enhancing opportunity in rural England
Public Service Agreement target 4: Enhancing opportunity
in rural England
Reduce the gap in productivity between the least well performing
quartile of rural areas and the English Median in 2008 demonstrating
progress by 2006 and improve the accessibility of services for
people in rural areas. In order to deliver on the "access
to services in rural areas" aspect of this target, the Department
has identified five main themes where improvements are a priority
(health, education and skills, work and pensions, transport and
housing). Delivery on targets in these areas will require joint
working with other Departments.
18. Has the Department formulated joint plans with the
relevant lead departments in order to deliver on its five priority
areas relating to access to services in rural areas (PSA Target
4)? If so, could the Department provide these to the Committee?
Assessing progress against this target has continued to present
many challenges. We have had difficulty deciding upon meaningful,
measurable measures which could then be agreed with other departments
with which the policy lead rested, and thus delivery plans. At
the time that the SR04 round was concluded, cross-Whitehall discussions
indicated that it would be possible to apply the rural definition,
(then in development), to a range of key indicators. However,
difficulties with the availability of baseline data and the time
lag associated with national data sets have continued to hamper
progress. Not least amongst these difficulties was a mismatch
between the geographies at which certain key national data was
being collected and the geographies at which the rural definition
or classification could be applied. These challenges can lead
to a tendency to focus on those targets which can be measured.
However, these may not reflect the reality of needs in rural areas.
We have had more success in the development of the wider
rural evidence base. We now have a reasonably robust rural definition
that allows us to map the rural "position" across a
range of datasets, such as demography, employment, skills, etc.
LOOKING FORWARD
Defra is currently seeking to work closely with departments
across Whitehall to ensure that delivery plans for the proposed
PSA set are rural proofed effectually. We are putting agreements
in place with other Government Departments, subject to decisions
in the up coming spending review. The aim is to embed the rural
dimension at a much earlier stage in the process than was the
case in the previous spending round.
Building on the evidence that we have gathered over this
spending period, Defra has developed a much clearer approach to
mainstreaming rural policy. Central to this is the move from a,
potentially crude, top-down focus on inputs and processes at the
national level to a more sophisticated local focus on local outcomes.
For example, our support for third sector organisations, especially
Rural Community Councils, has helped those organisations to take
up opportunities to represent rural community interests in the
development of Local Area Agreements. Another example is the new
Planning Policy Statement 3 (PPS3), which places greater emphasis
on the need for local planning decisions to address rural housing
needs.
This work will be supported by the Commission for Rural Communities
(CRC), established by the Natural Environment and Rural Communities
Act 2006. The CRC acts as an independent rural adviser, advocate
and watchdog, with a particular focus on social disadvantage and
economic underperformance. It is expected to advise and challenge
the Government and delivery bodies at all levels to improve performance
and entrench best practice and has a key role in supporting partners
across the public sector to consider rural needs and the development
of their policies.
PSA 5: Sustainable farming and food
Public Service Agreement target 5: Sustainable farming
and food
Deliver more customer focussed, competitive and sustainable
farming and food industries and secure further progress via CAP
and WTO negotiations in reducing CAP trade-distorting support.
The 2006 Departmental Report reported this target as being
"on course", but slippage was reported in the 2006 Autumn
Performance Report. The 2007 Departmental Report reports performance
as being back "on course".
19. What explains the fall and subsequent rise in performance
in relation to PSA 5 (Sustainable Farming and Food) during the
past year?
— What new data support the current assessment that
performance is now back "on course"?
The fall in the GVA indicator in 2004 and 2005 will have
been due to a complex range of factors which it is difficult to
separate out. One significant contributor is the fact that the
long term fall in farm labour in the EU14 continued period whereas
in the UK the total labour remained fairly constant. In addition,
there will be effects from varying crop harvests across Europe
(in particular with continental Europe recovering from the drought
affected harvest in 2003) and a level of volatility due to the
way in which the range of commodity price movements impacts differently
in the UK compared with the EU14. This is because of the different
mix of agricultural production between the two.
The rise in performance in 2006 is similarly a result of
several factors. One important contributor is the ending of the
OTMS and the resumption of older cattle entering the food chain
(with the result that these cattle now count as part of output
and contribute to GVA). The resumption of beef exports will have
also helped firm UK cattle prices as domestic production increased.
Other contributions to the overall increase are an increase
in value added activities on farm and in diversification more
generally (some of these are funded through the ERDP); increased
farmer collaboration (between farmers and vertically through the
food chain);increase in farmer skills/business competence; increase
in benchmarking; increase in proportion of production sold under
assurance schemes.
The overall assessment of "on course" is made taking
the following into account:
— focus is on the wider outcome of competitive farming
rather than the GVA indicator specifically;
— it is in the context of the overall direction
of travel of the measure, treating the trajectory as a broad guide
and not a specific series of interim targets; and
— it takes into account the impacts that are starting
to feed through from delivery of a range of policies, as outlined
above.
PSA 6: Waste and recycling
Public Service Agreement target 6: Waste and recycling
To enable at least 25% of household waste to be recycled
or composted by 2005-06, with further improvement by 2008.
The Department has already met the first part of this
target, to enable at least 25% of household waste to be recycled
or composted by 2005-06. Page 41 of the Departmental Report says
that, in order to meet the second part of the target—to
achieve "further improvement by 2008"—all local
authorities must meet a minimum level of 20% recycling/composting
in 2007-08.
Page 41 of the Departmental Report states that most funding
in this area is provided by the local authority Environment, Protective
and Cultural Services (EPCS) block.
20. What action has the Department taken to achieve the
second part of PSA target 6 (Waste and recycling), given that
funding is channelled through local authorities?
— To what extent do current levels of Environment,
Protective and Cultural Services (EPCS) funding meet the additional
costs incurred by local authorities in delivering on this target?
On a point of clarification: The criterion for achieving
the second part of PSA 6 is an increase in the national recycling
rate. The statutory performance standards for recycling and composting
in 2007-08 for all local authorities will be equal to the level
of their targets in 2005-06. The exception is those local authorities
with a target of 18% in 2005-06. These are required to raise their
performance to 20%. This will help achievement of the national
target but is not the criterion for success.
The Government looks at all pressures, including waste, on
local government when setting the overall level of funding for
local authorities. Considerable investment has been made in local
government; an increase in overall grant to councils of 39% in
real terms up to 2007-08. Defra also provides other support to
local authorities—primarily through the work of the Waste
and Resources Action Programme (WRAP). WRAP run a variety of workstreams
including:
— the Recycle Now campaign, which seeks to influence
public behaviour and the home composting programme providing support
to local authorities
— the home composting programme, which provides
support to local authorities on the running of local home composting
campaigns and through the provision of reduced price composting
bins
— the ROTATE programme, which offers guidance and
toolkits for local authorities on doorstep collection systems
for recyclates.
PSA 7: Eliminate Fuel Poverty
Public Service Agreement target 7: Eliminate Fuel Poverty
Eliminate fuel poverty in vulnerable households in England
by 2010 in line with the Government's Fuel Poverty Strategy Objective.
Joint target with the Department for Trade and Industry.
The latest data presented in the Departmental Report (p
20) was for 2004, published in June 2006.
21. Can the Department provide data from 2005 for PSA target
7 (fuel poverty)
Fuel Poverty figures are calculated using English House Condition
Survey data, for which there is a two year lag in collation. The
latest published information is for 2004, with calculations for
fuel poverty in 2005 underway and to be published shortly in our
Fifth Annual Fuel Poverty Progress Report.
In 2004 fuel poverty had fallen, In England, from 5.1m in
1996 to 1.2m, of which 1m were vulnerable.
However since 2004, as indicated in graph 1, fuel poverty
is estimated to have increased principally due to the significant
rises in fuel prices. Between 2004 and 2006 it is estimated that
vulnerable households in fuel poverty have doubled to two million
in England, with comparable rises in the devolved administrations.
However assuming current activity levels in tackling fuel poverty
and following the scenario currently most reflective of future
fuel prices, fuel poverty is estimated to reduce to around 1.5
million in 2010 and 700,000 in 2016.
22. Has there been evidence from interim indicators that
recent fuel price decreases have helped performance in this target?
Fuel poverty is driven by three elements, household energy
efficiency, income and fuel prices. Historically the element having
most impact on fuel poverty figures has been an increase in household
income being responsible for 60% of the reduction in fuel poverty
between 1996 and 2003. Energy efficiency and fuel prices for the
same period were accountable for around 20% of the reduction each.
Although recent reductions in fuel prices will have started
to have a positive impact on the number of households in fuel
poverty, it is too early to estimate the scale of impact. However
calculations by DTI suggest that any percentage reduction in fuel
prices reduces the number of households in fuel poverty by 40,000.
23. What has Defra done to influence other Government departments
to ensure delivery on this target?
As one of the two lead Departments on fuel poverty Defra
has taken the lead in seeking to drive forward progress across
all areas of Government.
Ministers across Government have met to discuss the range
of challenges which exist in tackling fuel poverty, recognising
the need for and benefits from action across each of the influencers
of fuel poverty. Alongside Defra and DTI, representatives from
DWP, DH and CLG have been directly involved in discussions.
This work is supported by an active programme of liaison
between officials which has helped to take forward action and
identify opportunities for joined up working. An example of this
was highlighted in the Energy White Paper with work in hand for
a cross Government campaign this winter to highlight the importance
of keeping warm.
We also chair a Management Board involving officials from
DTI, DWP, DH, CLG and HMT all of whom have a direct interest in
progress towards this target. The purpose of this group is to
drive forward policies and practises that will more effectively
and efficiently deliver a reduction in fuel poverty.
PSA 8: Improving air quality
Public Service Agreement target 8: Improving air quality
Improve air quality by meeting the Air Quality Strategy
targets for carbon monoxide, lead, nitrogen dioxide, particles,
sulphur dioxide, benzene and 1,3 butadiene. Joint target with
the Department for Transport.
This target is described as "on course", despite
only some of the elements of the target being met. There does
not seem to have been any improvement in the failing pollutants
(nitrogen dioxide and particulates) for some years; identical
wording has been used in this year's Departmental Report as last
year's.
24. Why has PSA 8 (Air Quality) been reported as "on
course" when only some elements of the target are being met?
Our reports have also made it clear that while we anticipate
meeting the majority of the seven pollutants and their 19 sub
sets which comprise the Air Quality PSA and all the pollutants
in the PSA target, in the majority of the country (currently up
to 99.5% in some areas), we have also made it clear that we expect
that meeting those for nitrogen dioxide and particles in all parts
of the country will be extremely challenging—if not impossible
in some cases. For example, modelling shows that even if every
vehicle was taken off London's roads there would still be widespread
exceedences of the NO2 objective because of high background levels.
Therefore in reporting the PSA we have used HMT guidance
which terms "on course" as indicating "progress
in line with plans and expectations." However, we recognise
that this could have perhaps been better described as "broadly
on course but with some elements of slippage", if terminology
had permitted.
PSA 9:Animal health
Public Service Agreement target 9: Animal health
To improve the health and welfare of animals, and protect
society from the impact of animal diseases, through sharing the
management of risk with industry, including:
— a reduction of 40% in the prevalence of scrapie
infection (from 0.33%-0.20% by 2010);
— a reduction in the number of cases of BSE detected
by both passive and active surveillance to less than 60 in 2006,
with the disease being eradicated by 2010; and
— a reduction in the number of Bovine TB to new
parishes below the incremental trend of 17.5 confirmed new incidents
per annum by the end of 2008.
Page 76 of the Departmental Report notes "slippage"
against the target for the reduction in incidence in BSE. Despite
this, page 77 shows that there has been a decrease in resource
in this area from £313 million in 2005-06 to an allocation
of £169 million in 2006-07 to a planned allocation of £156
million in 2007-08.
25. Given that there has been "slippage" with
the BSE reduction target, why has resource decreased in this area?
Page 76 of the Departmental Report explains that the "slippage"
against the 2006 target for the reduction in incidence in BSE
(114 versus the target of 60), is largely due to an increase in
the level of EU-required active surveillance in 2006, particularly
in cattle born before the 1996 reinforced feed ban, and the longevity
of this sub-population. This "slippage" should be considered
in context of a 49% reduction in the incidence of all BSE cases,
and a 41% reduction in the incidence of BSE cases born after the
1996 feed ban, from 2005 to 2006. Reduction targets based on incidence
(ie number of BSE cases detected) are affected by the level of
surveillance in a population where the prevalence of disease (ie
number of BSE infections per unit of population) remains constant.
The mean incubation period for BSE is five years. The main control
is the prohibition on the feeding of ruminant protein to ruminants
which Defra will continue to enforce rigorously.
Page 77 shows that the most significant decrease in resource
has been in relation to the Over Thirty Month Scheme (OTMS) and
the Older Cattle Disposal Scheme (OCDS).
There has also been "slippage" in achieving a 40%
reduction in the prevalence of scrapie infection by 2010 (Departmental
Report, p 75).
26. Why has there been slippage against the scrapie reduction
target?
The principle means of attaining this target was expected
to be the transition from voluntary NSP Ram Genotyping Scheme
(RGS) to a compulsory scheme as required by EU legislation for
all flocks of high genetic merit (effectively most if not all
breeding rams in Great Britain).
Those EU rules would have required the compulsory slaughter
of all rams identified as having the most scrapie susceptible
genotypes (NSP Types 4-5[3]).
However in 2006 the EU Council and Parliament persuaded the EU
Commission that compulsory genotyping may not be desirable. Member
States subsequently supported the Commission's proposal that scrapie
genotyping should be both discretionary and voluntary (outside
of known scrapie affected flocks).
EFFICIENCY SAVINGS
Progress against targets
Page 112 of the Departmental Report shows that the Department
has now revised its headcount reduction target: its revised target
is now 1,422 reductions by the end of 2008 as opposed to the initial
target of 2,400. However, it is not clear from the Departmental
Report whether the Treasury has accepted the revised headcount
reduction target.
27. Has Treasury agreed the Department's revised headcount
reduction target?
The Treasury has accepted the Department's proposals on headcount
set out under its "Renew" Programme.
— To what extent will the revised target have an
impact on the Department's ability to deliver its financial savings
target?
We are forecasting that in the SR04 period we will provide
both a contingency against shortfalls in financial gains arising
from under-delivery headcount reductions and that the Department
will over-deliver by £65 million on the original SR04 target
of £610 million. Additional gains will result from further
reductions arising from the Renew Programme—these gains
cannot be quantified until grades of staff and dates of departure
have been finalised.
— Where will the additional resource be found within
the organisation to cover the greater number of staff than anticipated
under the SR 2004?
Provision to cover these staff will be identified by each
business area as part of the Department's internal budget allocations
for 2007-08.
28. How does the Department monitor the impact of efficiency
savings on the quality of front-line services?
— Could the Department provide (a) results of recent
customer satisfaction surveys and (b) the measures the Department
uses to monitor its output levels and the results of these measures
in recent years.
Each initiative within the Efficiency Portfolio has adopted
appropriate metrics for assuring that quality and performance
standards are not compromised in the generation of efficiency.
Examples of the listed approaches are set out below:
A selection of measures from the Environment Agency's Corporate
Balanced Scorecard are monitored. Examples include:
— Delivery of flood risk management capital and
revenue programme against plan. Feb-07 target £240.4 million,
outturn £240.7 million.
— Successfully influence flood plain development
planning decisions. 2006-07 Quarter 4 target 638, outturn 682.
— More rural land is covered by environmental agreements
that protect soil and water. 2006-07 Quarter 4 target 43,866,
outturn 64,633.
— More houses are protected from flooding. 2006-07
Quarter 4 target 29,605, outturn 28,959.
Front line delivery in Natural England, established by the
Modernising Rural Delivery Programme is monitored using PSA target
3a. Details of which can be found on pages 52-54 of the Departmental
Report.
The return in 2006-07 on investment in professional procurement
staff in the Procurement and Contracts Division was £26.50
for every £1 spent.
Most of the agencies conduct an annual Customer Satisfaction
Survey as a requirement of the ministerial targets set for them.
The surveys are sent to a cross section of customers to get a
representative view and a numerical scoring system is used to
collate the responses. The results are then published in their
annual reports. Overall they have achieved high scores in their
Customer Satisfaction Survey's. Eg CEFAS has reported that the
overall customer satisfaction survey score will exceed 82%, CSL
reported a score of 88% in their last published annual report,
and VLA have reported a score of 80% in the last Customer Satisfaction
Survey.
In the 2007 Departmental Report all the agencies reported
that they had either achieved or were on target to meet their
performance objectives.
Verification of reported efficiency savings
Treasury's Departmental Report guidance (PES 06/18 December
2006) stated that departments' reported efficiency gains should
be clear in "defining how gains claimed in previous years
have been audited, and outlining the auditors' conclusions".
Similarly, the Treasury Committee's Second Report of Session
2006-07 (HC 115), The 2006 Pre-Budget Report, recommended that
Government departments should report efficiency savings with reference
to the Office of Government Commerce's (OGC) classification of
"provisional", "interim" and "final".
Defra had delivered £410 million of financial efficiencies
by the end of December 2006. However, Defra's 2007 Departmental
Report makes no reference to whether the reported efficiency savings
have been subject to audit or verification, and does not break
down the savings by the OGC classifications.
29. Could the Department provide a breakdown of the reported
£410 million financial efficiencies by the OGC classifications
of "provisional", "interim" and "final"
— Could the Department provide its quarterly OGC
efficiency reports.
Yes. We have attached the last three sets of reports.
Shared Services
Reform of corporate services (eg HR and finance) was a
major focus of the SR2004 Efficiency Programme. Page 117 of the
Departmental Report provides information on the Shared Service
Programme. Unfortunately the web link to the Sector Plan is inactive.
Figure 21 (Departmental Report, p.112) states that the workforce
savings target from the "corporate sector reform" initiative
has increased from 180-458 but also shows that only 182 workforce
cuts were achieved by December 2006.
30. Could the Department provide:
— the Shared Service Transformation Programme Defra
Sector Plan;
We believe the link remains valid but have attached the plan
for ease of reference.
— a breakdown of the financial savings arising therefrom;
Economic benefits will be secured from four main sources,
continuous improvement, improved technology, savings generated
within customer organisations following take-on and economies
of scale by increasing the user base. Organisations typically
see benefits of 20%-30% from Shared Services. By far the most
significant savings—Deloittes' latest survey of global Shared
Services Organisations indicates between 65 and 80% of the total
saved—are realised in the customer organisation as a consequence
of "onboarding", where employees adopt new practices
and become more effective.
The sector plan itself is not specific as to intended savings,
however, the original business case for shared services is currently
undergoing significant rework as a result of the changing resources,
structures and scope within Defra and its delivery bodies. A revised
document is expected at the end of July, which will set out in
more detail the expected economic benefits to the Defra Network
from the shared service approach.
— an explanation of how the savings relate to the
statistics in Figures 20 and 21 (pp. 111-2 of the Departmental
Report);
Savings to date generated from Defra's Shared Services approach
are reported under the line entitled "FPRD Change Programme
& Procure to Pay", which amount to £6 million, generated
mainly from centralisation of processing (continuous improvement)
and transaction automation (improved technology).
— an explanation of how Defra will achieve the remaining
276 reductions envisaged.
The workforce reduction target for corporate service reforms
set out in the Departmental Report has been amalgamated into the
target under Renew Programme to reduce the size of the core department.
To this end, a workforce ceiling has been set for each business
area. The Permanent Secretary announced these ceilings to staff
on 7 June 2007. A copy of the table setting out ceilings by business
area, including corporate services, is attached.
31. What level of additional finance and headcount efficiency
savings will the mergers coming out of the Hampton review deliver
in SR2004?
— Could the Department provide a breakdown of
these savings, and explain how they fit in with those reported
on pp. 111-2 of the Departmental Report.
The savings attributed to the Hampton Programme on Page 108
of the Departmental Report relate to reduced burden through better
regulation and simplification. We do not anticipate Departmental
efficiency savings to be generated by the Hampton Programme.
— The Hampton Review recommended the merger of the
Gangmasters Licensing Authority with the Health & Safety Executive;
this has been agreed according to the Department's 2006 Simplification
Plan. However, the Departmental Report makes no mention of this
in the section on "Better Regulation and simplification"
(pp 106-7).
— Will the merger of the Gangmasters Licensing Authority
with the Health & Safety Executive still go ahead by April
2009, as envisaged in the Simplification Plan?
Work to merge the GLA with the HSE by April 2009 is ongoing
and project teams have been established to take this work forward.
1
Not printed. Back
2
Not printed. Back
3
NSP genotypes table http://www.defra.gov.uk/animalh/bse/othertses/scrapie/nsp/pdf/genotypes.pdf Back
| 
