Examination of Witnesses (Questions 40-59)
OFFICE OF
GOVERNMENT COMMERCE
& DEPARTMENT FOR
ENVIRONMENT, FOOD
AND RURAL
AFFAIRS
18 JUNE 2007
Q40 Annette Brooke: May I ask about
the time scales? It is really good to hear that you are doing
all that, but when will it all happen? This year, next year?
Peter Fanning: It is happening
this year. As I said, the OGC has been able to make some of the
major changes that I am describing only since January this year,
when we were given new powers under Transforming Government
Procurement. We are building on work that was done previously,
but the more intrusive and demanding role that the OGC has now
been asked to take is very new.
Helen Ghosh: Another thing that
is happening, subject to correction from the Treasury Office of
Accounts, is that the Treasury has re-emphasised that sustainable
development benefits are absolutely part of a whole lifetime costing
assessment. That is stated in the sustainable procurement action
plan response. The Treasury has re-emphasised that because, as
the NAO and others have said, there is still confusion out there
about whether we are supposed to go for the cheapest immediate
option or are allowed to take into account the wider range of
environmental impacts.
You give very good examples of that, but there
is additional Green Book advice out, which I have in front of
me, that says that: "value for money must be assessed over
the whole lifetime of a project, including disposal... estimating
the costs and benefits to society as a whole, not simply those
directly relevant to the purchaser—eg environmental impact—as
set out in the Treasury's Green Book". So, it has done what
it promised to do in response to the Simms Report.
Marius Gallaher: That note was
published on 2 March this year, so it is out there.
Helen Ghosh: And you and others
could hold us, as Accounting Officers, to account if we do not
take that into account.
Q41 Annette Brooke: Perhaps we should
return to that in a year's time to find out if it is happening.
I shall come back to that point, but I want
to change direction for a moment. In September 2000, the Prime
Minister announced that all timber used in construction contracts
would be procured from legal and sustainable sources. Given most
of the statistics in the Report, the compliance figure is quite
high—more than 80% of projects use timber—but things
are still quite a long way from the Prime Minister's statement.
Is that high figure because of the constant pressure from Greenpeace,
which says that it is continually finding that unsustainable wood
is used in Government buildings, some of which are not far from
where we are sitting? Is it the pressure from Greenpeace that
is bringing about change or are the Departments doing what is
asked of them—in this case, by the Prime Minister in 2000?
Helen Ghosh: As you say, it was
pleasing to see such a high compliance rate. We have driven through
a high compliance rate by having quite a lot of bureaucracy. Certificates
have to be signed off and individual—
Q42 Annette Brooke: So, why are you
still failing? The latest Greenpeace information that I found,
from September 2006, said that it had found timber in the £5
million restructuring of the press area during renovation work.
Helen Ghosh: I would be happy
to respond to the Greenpeace note, with more information, if you
would like me to do so.[1]
There are often difficulties regarding the reliability of the
supply chain certification that individual Departments get. Peter
may know that from his OGC experience. You cannot necessarily
rely, in 100% of cases, right back down the supply chain on what
you are signing off to the best of your belief. However, we think
that we have the processes in place, at our end, for ensuring
compliance.
This issue has been strongly politically driven.
As you will be aware, Barry Gardiner, the Minister with responsibility
for biodiversity, recently drove through and announced changes
that will further tighten requirements from April 2009, so that
only legal and sustainable timber will be acceptable. Clearly,
there is some kind of cause and effect, but we are policing it
and there is a strong political drive. However, we need to make
sure that we clear up the loopholes in the supply chain system.
Q43 Annette Brooke: There do seem
to be some issues.
I should like to return quickly to an earlier
point and ask Mr Fanning something, although he might not be able
to answer it. It has struck me, throughout, that few Departments
use the green assessments. I have come across a case in my constituency
in which the Home Office called in designs for a new custody suite
and redesigned them, presumably using the green assessment, but
the project is no longer going ahead because the Home Office has
not allocated enough money for it. Again, people probably are
not looking at the whole-life situation. How is that situation
being managed in government?
I could give more examples from the building
schools for the future programme. The Department for Education
and Skills can give the criteria that you are setting and can
do what you have told them to do, but we know that schools with
projects in our constituencies are cutting back to meet their
budgets. However much you tell me is happening throughout central
Government, how are you going to make sure that the whole-life
thing happens in all the projects in my constituency and everybody
else's constituencies?
Helen Ghosh: Can I give a general
comment before handing over to Peter to discuss the technicalities?
Of course, the issue was at the heart of what we are trying to
achieve here. People and Departments—increasingly going
to CSR/07—will have a limited amount of money. In any case,
an accounting officer is saying, "What is the best that I
can achieve for the amount of money that I have?" It might
be a trade-off between refurbishing or building a smaller number
of schools to an excellent standard, and refurbishing or building
a larger number of schools to a very good standard. There will
always be a trade-off, and we cannot assume that we will always
have as much money as we need to finance the best possible option.
We need to turn the debate—this is where
OGC will play a role—around and say to the construction
industry and suppliers, "These are the outcomes we want in
terms of carbon, water, waste or whatever it may be. You find
the best way to deliver them, you give us the spec for what you
will do to deliver them, and we will choose the option that is
the cheapest way of delivering the outcomes we want." Because
we have suffered in the past—
Q44 Annette Brooke: But where is
the whole-life approach? You are losing it.
Helen Ghosh: No, you are not losing
the whole-life, because then you will look at them and say, "These
are the outcomes we want over life, so that waste and carbon emissions
go down or whatever it may be." When you analyse the business
case and look at the various bids that you get, you will precisely
be building the whole-life approach into the choice that you make.
But you will be doing it against a set of outcomes for the long-term
running of that building, rather than saying, "Let's have
a school and, oh, let's just add on some sustainable development
outputs as an addition." You will be building it into your
choices, but you still may not—unless Parliament votes us
infinite amounts of money—always be able to choose the best
option. I do not know whether Peter agrees with that.
Peter Fanning: I should add that
there is always a resource constraint. It is difficult for central
Government Departments to influence the wider public sector; it
is practically very difficult. Most of the expenditure on construction
is in the wider public sector—something like 85% of the
demand comes from local government, which is not directly within
OGC's remit. As I said, there should be no trade-off between expenditure
today if that generates a benefit tomorrow, provided value for
money is achieved. There are financing arrangements that are already
widely used to ensure that you can achieve the sustainability
options.
Q45 Mr Wright: The title of the Report
is Sustainable Construction and Refurbishment on the Government
Estate. Who is in charge of sustainable construction and refurbishment
on the Government estate?
Helen Ghosh: Individual Departments
are responsible for individual projects, within the framework
that is set by OGC in terms of common minimum standards and procurement
and sustainability policies. We in DEFRA have a significant role
to play in providing advice both to OGC in the form of the "Quick
Wins" list, and directly to Departments about products and
processes that are most likely to achieve the sustainable outcome.
So it is a three-part accountability structure.
Q46 Mr Wright: Figure 3 shows a little
bit of the confusion. You have not really mentioned the DTI. Do
you think they play a role?
Helen Ghosh: The DTI has an overarching
role in the construction industry as a whole, so the kind of work
that they are doing on the review of and strategy for sustainable
construction is for public sector-private sector, encouraging,
in particular, the private sector to set ambition targets for
itself. But it is just one contextual piece of policy within which
public sector construction and refurbishment sits.
Q47 Mr Wright: But looking at figure
3, do you accept that there is an element of confusion that has
probably helped to contribute to the fact that you seem to be
failing quite badly?
Helen Ghosh: I do not think there
is evidence—actually, I do not think the Report produces
evidence—to suggest that the reason that people were not
responding or meeting the targets that have been set in terms
of assessment was anything to do with, "We didn't know who
to go to." I think they are very clear who to go to, and
if you look at this chart on page 9, the difference in responsibilities
is very clear in terms of building on building regulations. If
you look at the DCLG and the DTI, they are essentially looking
at the whole construction sector and the building regulations
as a whole. What we are doing is supporting Departments in how
they procure and deliver their own construction.
Q48 Mr Wright: So ultimately, DEFRA
is in charge?
Helen Ghosh: No. Individual Accounting
Officers are in charge. We provide information and facilitation,
very much in partnership with the Office of Government Commerce,
so that Departments know what the sustainable approaches are,
what the latest information is and whether they should go for
CHP (Combined Heat and Power), natural ventilation or whatever.
We are responsible for that; I am not responsible for the choices
and decisions that Ian Andrews, Hugh Taylor or David Bell make
when they are looking at an individual construction or refurbishment—
Q49 Mr Wright: You mentioned the
close relationship between DEFRA and trying to get "Quick
Wins", but it should be "Quick Losses", should
it not? Nothing has happened.
Helen Ghosh: On the contrary;
the "Quick Wins" list is not used as much as it should
be, and we shall be encouraging people to do so, but there is
good evidence that—
Peter Fanning: There is good evidence
that it is being used. I would make the point that there are many
voices in this game: taxpayers, the buyers, the suppliers, individuals,
communities and, if you like, the wider environment. One of the
things that we need to do is work closely together. I know that
this might sound a bit like motherhood and apple pie, but if you
deny any one of these Departments a role in this debate, you are
effectively disfranchising one of the voices that I mentioned.
The trick is to work together.
Q50 Mr Wright: I have taken a lot
of drugs today—for my cold, that is—but I do not think
that I am hallucinating that much. The title of paragraph 2.19,
for example, is "Uptake of the `Quick Wins' is limited".
You are putting a fantastic gloss on it, but ultimately Departments
are just not taking any notice of DEFRA on this whatever.
Helen Ghosh: It is actually an
OGC list supported by DEFRA—
Q51 Mr Wright: Well, OGC, DTI, DEFRA—take
your pick.
Helen Ghosh: I go back to my opening
remarks. Until—and I think that the time has now come—Departments
are faced with real public scrutiny, parliamentary scrutiny through
you and political scrutiny, through the publications of the Sustainable
Development Commission, against the Prime Minister's very demanding
targets, as well as the extremely tight spending constraints in
the CSR 07, their minds might not have been concentrated wonderfully.
I can assure you that their minds are indeed concentrated wonderfully
now. We would expect the "Quick Wins" list, which we
are constantly improving, to be much more visible.
Q52 Mr Wright: Is your mind concentrated?
Helen Ghosh: If you look at the
DEFRA record, you can see that we have consistently produced excellent
BREEAM buildings, in both our major refurbishments and our new
buildings. That reinforces my point. We cannot afford not to set
a good example in our new construction and refurbishment. I am
very sorry, as David Miliband was, that we did not do as well
as we should have on waste arisings or water in our sustainable
operations. But, because we are so visible and have to take a
leadership role in Government, our record on construction and
refurbishment is very good.
Q53 Mr Wright: Can I take you to
paragraph 1.9? I might also refer to paragraph 3.24, too, because
I am interested to see how well DEFRA does on those targets. The
first bullet point in paragraph 1.9 refers to achieving: "a
30% improvement in energy efficiency by 2020". Are you on
board to do that?
Helen Ghosh: We have set up with
BioRegional, which is—
Q54 Mr Wright: What does that mean?
Yes or no?
Helen Ghosh: Sorry, it is a long
way away—
Q55 Mr Wright: I thought that you
would say that, because paragraph 3.24 indicates that there needs
to be a: "15% improvement in energy efficiency by 2010".
That is two and a half years away. Are you on board to do that?
Helen Ghosh: Yes, I would say
that we were on track to do that. We are on track to do that for
a number of reasons. We are reducing our occupancy, so that we
are moving out of a number of buildings. We are moving, on the
whole, into more energy efficient buildings, into which we can
build much more sensitive environmental management systems. I
shall send the Committee a note about this, but we have just bought
an environmental management system that will give us blow-by-blow
information about, I think, energy use and water use. So, we are
in a smaller number of buildings, many of which have recently
been refurbished to a higher environmental standard. We are working
closely with our staff, through the Act on CO2 process,
to ensure that, as well as being in fewer buildings and in buildings
of a higher standard, we behave in the right way. So, we are on
track. [2]
Q56 Mr Wright: I am conscious of
time. Are you on track to make the central Government office estate
carbon neutral by 2012?
Helen Ghosh: Yes. Of course the
judgment that has to be made—there has been a lot of coverage
of this in the papers today—is to what extent the Government
will go for carbon offsetting, which we will need for carbon neutrality,
as opposed to reduction in energy use. Our primary aim will be
to reduce energy use in the central estate and to offset the remainder.
However, primarily we need to look for energy efficiency.
Q57 Mr Wright: Are you reducing water
consumption to an appropriate level? Are you on track to meet
that target?
Helen Ghosh: Having had a blip
last year, yes, we are on track to do that. As I said, we are
setting in train the mechanisms to achieve it.
Q58 Mr Wright: Why was there a blip?
Helen Ghosh: I shall let you know.
Sorry, it is in the SDC (Sustainable Development Commission) Report.
I shall send you a note.
Q59 Mr Wright: The final requirement:
"reduce waste arisings by 5%, and recycle 40% of waste, by
2010."
Helen Ghosh: We are getting a
very close grip on that already. There are bizarre things about
waste arisings. I brought in batteries from home and put them
in the big DEFRA buckets for recycling batteries in our entrance
hall, but was told counter-intuitively that that was increasing
DEFRA's waste arisings. There are all sorts of ways of controlling
that, which we are now doing.
1 Ev 12-13 Back
2
Note by witness: Latest figures for the period April 2006
to March 2007 show an indicative 2% improvement in energy efficiency
from the previous year. This is an indicative figure, as our energy
return has only just been submitted to BRE and they have yet weather
corrected the data. This improvement combined with the specific
energy efficiency/carbon reduction measures implemented throughout
the estate, indicates DEFRA is on track to achieve the SOGE energy
efficiency targets. DEFRA has a clear, costed programme of energy
efficiency/carbon reduction projects for the 2007-10 period. Results
from the first quarter of this year, (April-June 2007) show higher
than expected increases in energy efficiency which will in turn
lower our carbon emissions. Provisional figures for 2006-07, show
a 3% reduction in water consumption compared with 2005-06. The
total waste arisings for the Department have decreased by 8.12%,
from 5,716 tonnes in 2005-06 to 5,252 tonnes in 2006-07. The recycling
rates have increased from 47% in 2005-06 to 55% in 2006-07. Excluding
hazardous waste the recycling figures have increased from 61%
to 67%. Back
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