Examination of Witnesses (Questions 20-39)
OFFICE OF
GOVERNMENT COMMERCE
& DEPARTMENT FOR
ENVIRONMENT, FOOD
AND RURAL
AFFAIRS
18 JUNE 2007
Q20 Mr Touhig: But you say that as
though everybody wants to ask for it. It is like one of those
9 o'clock Monday morning situations. When someone is asked what
they do on Monday morning, they say, "Oh, I file that in
the draw on the Monday morning." When they are then asked
why they do that, they say, "Oh, I don't know why I do it,
I just do it every morning at 9 o'clock." Surely you should
be much more proactive. Indeed, the experts that the NAO called
in concluded that: "post-occupancy evaluations were significantly
under-utilised by government bodies". So you do not bother.
Peter Fanning: Post-occupancy
evaluation should be being done. As part of OGC's work on holding
Departments to account for their procurement performance, it is
the sort of thing that we would be looking at. There is currently
no mechanism for holding individual Departments to account for
whether they are good or bad buyers.
Q21 Mr Touhig: So all this is just
candy floss, is it not? It involves a great big huff and so on,
but we are not getting any outcomes.
Peter Fanning: Let us consider
the situation for someone on the other end of one of these performance
capability reviews that the OGC is conducting. We have only been
doing them since I received the powers from Government under Transforming
Government Procurement; we have only had them since January
and have already produced a report.
Q22 Mr Touhig: You have got powers.
Do you have the powers to direct Permanent Secretaries by saying
that this is Government policy and that you want this problem
tackled?
Peter Fanning: Yes.
Q23 Mr Touhig: And can you hold them
to account for procurement?
Peter Fanning: Yes. I can set
standards on procurement and require performance against them,
and we are doing that. We have only had those powers since January,
and I have already written to Permanent Secretaries on two occasions.
One matter is in connection with the civil estate. I intend—and
I am sure my successor will as well—to use those powers
to hold Departments to account.
Q24 Mr Touhig: Did you say your successor?
You have only just got the job.
Helen Ghosh: He is acting.
Q25 Mr Touhig: I see. Is it one of
those revolving-door jobs?
Helen Ghosh: Until Parliament
changes our roles, individual Accounting Officers will decide
on the correct set of actions to achieve the outcomes we want.
Turning now to the power of public scrutiny,
may I invite anyone who goes into the Cabinet Office to look at
the notice boards? There are big posters in the entrance, put
there by Gus O'Donnell personally.
Q26 Mr Touhig: Pictures of Ministers?
Helen Ghosh: The posters show
Cabinet Office performance against a range of sustainable development
outcomes, including water, waste horizons and other things. We
can see how we are doing this month, how we did last month and
how we need to do next month. The power of the political focus
and the Prime Minister's targets have reached the Cabinet Office.
I say no more.
Q27 Mr Touhig: Well done. A little
waste transfer station in France has been doing that for 10 years.
May we move on now? We are told in paragraph
4.4 that the DTI has developed a post-occupancy evaluation method.
Why is that not being shared across government, or is it?
Peter Fanning: It is one thing
to share the information, and another to get people to use it.
That is why we are learning how to require Departments—
Q28 Mr Touhig: This particular reference
says that the DTI: "has developed a post-occupancy evaluation
method tailored to the first twelve months of a building's occupancy,
with the aim of promoting the more widespread uptake of post-occupancy
evaluation." Why is that not being rolled out across government?
Peter Fanning: I am sure that
it is available across government. However, it is one thing to
promulgate the information about best practice and quite another
to get people to use it. The other point that I would make is
that I am not entirely convinced of the merits of burdening busy
Accounting Officers with yet more process. It is much more effective
to hold them to account for delivering major change.
Q29 Mr Touhig: This DTI paper was
published in 2003. You will catch up some time, will you not?
Peter Fanning: The point that
I am trying to draw out is that a post-occupancy evaluation does
not help the planet at all. [Interruption.] If I may finish,
what helps the planet is whether the properties that are being
used by the Departments have become less harmful to the planet.
Helen Ghosh: Exactly.
Q30 Mr Touhig: You say that it does
not necessarily help. You mentioned Eland House. The problem with
Eland House was that the staff did not understand how to change
the system manually, and the temperatures went haywire and did
whatever they wanted. That problem was down to education.
Peter Fanning: Yes, I am sure
that the person in charge of Eland House has learned from that.
Q31 Mr Touhig: I am running out of
time, but a defence estate for which I had some responsibility
in a previous life had a dream. Do you know about its dream?
Helen Ghosh: Yes. It is its version
of BREEAM.
Q32 Mr Touhig: Is it working?
Helen Ghosh: Yes.
Q33 Mr Touhig: Again, has it been
taken up by anyone else?
Helen Ghosh: It is rather like
the bespoke version—
Mr Touhig: I know that it is bespoke.
Helen Ghosh: We will be encouraging
people to do the best thing for the situation that they are in.
Clearly, they picked a version of the environmental assessment
model that fitted their circumstances. Equally, there is a BREEAM
for prisons and one for schools. If there are things to be learned
from the defence example, they will be learned.
The other thing that we have not mentioned is
that there is an increasingly effective network of procurement
professionals across government who will be exchanging that kind
of best practice. If BREEAM has things to offer, other Departments
with similar environmental challenges will take them up. It is
the outcomes that are important—for example, those relating
to a reduction in the environmental burden.
Q34 Mr Touhig: The much-maligned
Home Office which, according to some people, is not fit for purpose,
is certainly fit for purpose if we look at paragraph 4.7 on page
27. The Department uses very expensive flat screens, which are
in every Department these days, to give staff information about
how they can best use the building. It is pretty basic stuff,
so why is it not running across government? We should share good
practice.
Helen Ghosh: We all do things
such as that. For many years, I had a sustainable development
communication scheme within my Department run by the sustainable
development unit. However, we will be launching our own version
of the Act on CO2 campaign with all Departments. That will
give about half a million civil servants very simple information
about turning off screens and lights and how to deal with waste.
Later this week, we will launch an online carbon calculator. DEFRA
is providing that kind of resource for all the Departments to
use.
Q35 Mr Touhig: But it uses the flat
screens to communicate information to its staff. I am not talking
about turning them off; they are used to communicate information.
Helen Ghosh: Indeed; and information
on the Act on CO2 campaign can come out through the flat
screens.
Q36 Mr Touhig: Marsham Street is
not too far from Eland House, where manual adjustments to the
heating and ventilation system negated the whole operation, did
they not?
Helen Ghosh: That emphasises the
point that it is not only about looking at the construction process,
but how you manage the building.
Q37 Mr Touhig: So are you a convert
to the "lessons learned" theory?
Helen Ghosh: As you know from
my previous appearances, I am.
Mr Touhig: We will wait and see.
Peter Fanning: I should also make
the point that if you have the screens in existence, a great way
to use them is to communicate information. If you do not have
them, you may harm the environment by purchasing them, because
they add to the heat burden.
Mr Touhig: Well, there will be much rejoicing
at one sinner who repenteth. Well done.
Q38 Annette Brooke: In March 2005,
the National Audit Office Report Improving Public Services
through Better Construction suggested that annual savings
of up to £500 million could be made through the implementation
of good practice in general. How much do you expect to save through
the implementation of sustainability practices during 2006-07
and next year? Do you have any targets for savings?
Helen Ghosh: What we have are
outcome targets. We are not targeting financial savings, as we
did successfully through the Gershon programme, which produced
financial savings—some of which arose from increasing sustainable
development. The new set of targets explicitly looks at environmental
outcomes. Many of them will also produce financial savings, and
as we move into comprehensive spending review 2007, all Departments
will have to live within 5% year-on-year administrative reductions.
There will be an increasing incentive to us to look for savings
from energy, water use, travel costs and so on.
The answer to your question is not that we have
valued the savings as a value, but that we have set targets in
terms of environmental outcomes. This brings us back to value
for money and how one estimates it. In fact, over time, and in
some cases immediately, they will produce financial savings.
Q39 Annette Brooke: Yes, I just wonder
whether in some cases the financial savings might be the driving
force. That Report also mentioned whole-life costing and recommended
that that should be used more widely. There seems to be a lack
of use of whole-life costing, yet it is part of Treasury guidance.
What are you doing to ensure that Treasury guidance is implemented
on that aspect?
Peter Fanning: Perhaps I can help
on that. The first point is that the Treasury guidance is absolutely
clear, as you say; whole-life costing is the balance between the
costs on a whole-life basis and the user requirement. Essentially,
the Report points to difficulties in financial analysis and across
Government Departments. The first thing is that it has only recently
been the case that all finance directors in Departments have to
be financially qualified, so that they have the basic skills to
undertake the complex calculations. Secondly, my colleague Mary
Keegan has undertaken a capability review of financial capability
across Government Departments, and that will make a difference.
In its review of the procurement capability
of Departments, the Office of Government Commerce is specifically
considering the ability to undertake sustainability calculations
to make sure that full benefit is taken of the flexibility available
in the Treasury. We are also operating on the people. The Government
Procurement Service, which has been reinvigorated following Transforming
Government Procurement, is specifically—
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