Embedding sustainable development across Government, after the Secretary of State's announcement on the future of the Sustainable Development Commission - Environmental Audit Committee Contents

Examination of Witnesses (Question Number 1-24)


20 OCTOBER 2010

Q1   Chair: Mr Lee, I welcome you to our first session of the Environmental Audit Select Committee. We've got quite a full programme which is going to be curtailed because of the comprehensive spending review, so hopefully you'll bear with us and try to get through the questions that we wish to ask. Will you introduce your colleagues very briefly to us?

Andrew Lee: Yes, of course. Many thanks. I am Andrew Lee, Chief Executive of SDC. To my left is Shirley Rodrigues, our Head of Policy and Research; to my right Farooq Ullah and Minas Jacob from the SD and Government and watchdog side of the organisation.

Q2   Chair: Thank you very much. We are very concerned about how we track what the Government is doing in terms of being the greenest Government ever and the role of what has been the Sustainable Development Commission. We just wondered first if you could tell us where you think the Sustainable Development Commission has been most successful in getting Government to adopt more sustainable practices, what has helped with that and what are the cost benefits and savings of that? In a way, what has the value of the way you have operated been?

Andrew Lee: Of course. Thank you very much, Chair, it is good to be here. May I just give a little bit of context to that question? I think, in coming here, we are very aware that the arrangements for sustainable development inside Government have been far from perfect, but they have also been widely admired the world over as a leader—a leading example of best practice. As we go into 2012 and the world gathers for Rio plus 20 and looks back to the original Rio Earth Summit, with a focus on governance inside Government and the economy, a key issue for us, I think, is what will David Cameron say in that event?

I think in terms of the environment that we've worked within, Labour started well with this. The Prime Minister was personally committed originally to setting up the SDC and to sustainable development, but frankly lost interest and lost momentum and did not secure the legacy for sustainable development in the way that has been done with the Climate Change Act. That is something we wrestle with day-to-day. I think there is a danger now that the approach to sustainable development that has been instigated could systematically unravel. It is incredibly important, we think, in a time of austerity that SD principles—sustainable development principles—are vitally important as you are looking at cutting public spending and reducing the size of the estate. They are more important and not less important than in a time of growth.

  This is of course about the SDC and what we've done, and rightly so, but our view is removing the SDC is fine, provided and only unless what's being put in place is very, very significantly better—tangibly better. If not, effectively it is an act of vandalism in the eyes of the world to remove those structures. We believe that many businesses, NGOs, grass roots organisations are already way ahead of the Government on doing this stuff, and they will be deeply sceptical right now of this language of mainstreaming. So it means nothing unless there are real, concrete tangible steps. Based on the experiences we've had—our successes and failures—we think that means clarity about governance, leadership, strategy, structure; clarity about mechanisms, performance management, delivery plans, monitoring and scrutiny; clarity about how Government capability will be built on this area and how it will engage with business and civil society. Those things are "must-dos", and if all those boxes can be ticked then the SDC is a period in history and the Government will move on to a new period of taking this up a step; but, if not, the world will be watching.

  I think it is very important for the EAC that you are doing this inquiry and that you need to be confident you are clear that the Government is going to put in place mechanisms, structures and processes which are significantly better than what has gone before, and what has gone before was far from perfect.

  Successes and failures: well, successes? We think that the SDC has helped the Government to transform its operations and make it more transparent through our watchdog work. We think that, for every pound invested in that work with us, the Government has saved at least—at least—£15 for every pound invested.

Q3   Chair: How can you substantiate that?

Andrew Lee: Because the savings accrued to date per year are in the region of between £60 million and £66 million a year, and the SDC costs about £4 million a year. So we think that is good value for money. We think that has been a success.

Using SD principles to frame and look at some really tough policy issues like tidal power, nuclear power, the links between the economy and resource consumption and climate change, the links between health, place and nature—the second thing I think we have tried to do very successfully is to open up some of those tough policies, sometimes at the request of departments. We have also worked in depth and very closely with some Government departments and agencies like the Department for Education, the Department of Health and the NHS—I know you are talking to DH later today—working hands-on to help them do this stuff.

I think those are all successes, but there are also a lot of barriers. The barriers that we have struggled with in the work that we've tried to do for Government are: first, ineffective leadership or inconsistent leadership from the highest level, which needs to start with the Prime Minister and the Cabinet; an opt-in approach, which means that departments that want to do this do it, some very successfully, and others are allowed to get away with not doing it; the difficulty of silo busting—if you take a practical example, the links between diet, land use and climate change; Governments find it very difficult to struggle with those cross-departmental issues, and that has always been difficult. Also, no real sanction—I have yet to see a Permanent Secretary, despite the fact that performance objectives include a statement of operations, called to account by the Treasury and No 10 for failing to run a sustainable department—and less progress on policy than operations, I think. There has been quite a lot of progress on operations but the policy areas remain very difficult.

Chair: Caroline, do you want to follow up on that?

Q4   Caroline Nokes: You mentioned yourself that there had been failures and that the SDC was far from perfect. Why do you think that there has been insufficient impact in improving the level of sustainability across Government and, particularly, how do you think that it could be extended down to local government and the various tiers thereof, where there hasn't been very much evidence of much progress?

Andrew Lee: As I said just now, you can give advice if somebody wants your advice, so where Government departments, for instance, have asked for advice or where there are tools and mechanisms already in place—targets, for example—to drive more sustainable operations, things have started to happen. The problem is it's not consistent, so there is not a sustainable development duty on every part of the public sector or on every layer of Government. There were sustainability mechanisms embedded at regional level. That landscape is obviously completely changing now, so now we've got an emphasis on local authorities, on local economic partnerships. The question is: what imperative is there on those LEPs to act in a sustainable manner?

  Effectively, I think the SDC has worked with the tools it's been given. The tools were a good start but not perfect, and they weren't universally applied. For example—and you know I mentioned the legacy unravelling earlier—the work we did with the Audit Commission over three or four years was about how to use the comprehensive area assessment to look at the wider sustainability of an area, not just public service delivery in the narrow sense. Now that has all gone so, again, my question is now: what's going to replace that? Nobody is saying it's perfect. Surely you can devise a better system. You can always devise a better system, but what's that system going to be? It's not clear at the moment.

Q5   Caroline Nokes: You specifically identified barriers. The New Economics Foundation said that the SDC hadn't been successful in promoting sustainability. Is that one of your failures?

Andrew Lee: I don't think it is. I think our success in promoting sustainability is evidenced by the fact that leading businesses in most industrial sectors, NGOs, community groups, grass roots organisations and transition towns, are all doing this stuff and using this language, and political leaders can be comfortable with using it—I've heard the Mayor of Vancouver and the Mayor of Bordeaux, the ex-Prime Minister of France, talking about sustainable development—very powerfully. I think to say it hasn't been promoted successfully is a bit of an excuse.

You can't promote sustainable development just as a phrase, like a brand. I think what we've tried to do is promote what it stands for. It stands for tackling health through prevention of illness; it stands for accessible local transport; it stands for enabling people to reduce their dependence on fossil fuels without disadvantaging less privileged groups.

I think as a toolkit, if you like, as an approach, it has a very long pedigree obviously, as you very well know, going back before Brundtland. It's used internationally. It's used by Governments. Would you go and talk to people in the pub, "I'm going to talk to you about sustainable development"? No, you wouldn't. You would talk to them about what interests them. "Should we eat less meat or dairy? Yes or no?" That interests people, and that's sustainable development. We've tried to go in through the issues, I think.

Q6   Caroline Nokes: Thank you. Me again, I fear. Your memo identified the four main areas of work of the SDC. I would specifically like you to pick up on the watchdog role and what it actually entails.

Andrew Lee: Yes, thank you. I am going to pass over to Minas and Farooq to talk a little bit more about that, if I may.

Minas Jacob: The main purpose of all our work, particularly the watchdog role, is to drive performance improvements. Our watchdog work is characterised by two key principles. One is that we don't catch departments out by surprise, that we forewarn and that we challenge during policy development and during the development of operational activities. The other principle is that we provide, as much as we can with the information we have, a good overview of performance on priority areas.

Our work to date has focused on Government's operational performance—you are familiar with the Sustainable Operations on the Government Estate targets—but also challenging those targets and challenging Government to be more innovative and to think beyond the boundaries of its estate, including its travel activities and also impacts through supply chains and across communities.

  The other main focus of our work has been advising Government departments on the adequacy of their sustainable action plans. That encompasses two key work streams. One is advising on draft plans, as I said, so that we don't catch people doing the wrong thing, which would be a misuse of public money, and to support departments in improving those plans; then, when the plans are actually published, to produce a watchdog assessment of each plan. In addition to that, our watchdog work has led us to comment on a variety of themes, both operational and policy, including sustainable procurement, Government impact assessment process, how carbon neutrality is defined and so on.

  All the watchdog work necessitates very close liaison with Government departments. The idea that you can just pull a report out of the hat once or twice a year and that somehow you've assessed Government is, frankly, nonsensical. Our work has been informed by daily liaison and close collaboration with Government departments. It's the only way to actually advise along the way, provide a challenge, support innovation and then, when we do get to the point of producing formal written reports, those reports are well informed.

Q7   Caroline Lucas: Can I just come in on that specific point, if that is all right? I think the message that you're giving very clearly is that the watchdog role is incredibly important, and I agree with you. Andrew has already said that if we were to get rid of things like the watchdog role, then what has to be put in place would need to be better. The Secretary of State has spoken in a rather relaxed fashion about the Environmental Audit Committee, for example, taking on some of the roles that the SDC formerly had. From your experience of doing the watchdog role in particular, what resources do you think a Government Select Committee—even one as ambitious as ourselves—would need in order to be able to fulfil that role that you've been doing better than you have?

Minas Jacob: The current team comprises seven people, and our job is to assess every single policy that comes through our hands through the sustainable development action plans—all departments, all agencies, all operational activities—and to keep a very close eye on upcoming initiatives so that we can actually inform on that work. It's the only way of doing it. So our minimum—and I wouldn't say that it is a very comfortable resource by any stretch—at the moment is seven people, all of whom are very dedicated and work way above the minimum hours that you would expect. So that could be regarded as a minimum.

Chair: Caroline, do you want to carry on?

Q8   Caroline Nokes: Yes. I think Caroline actually picked up on one of the interesting questions there. You mentioned your very close liaison with Government departments. What proportion of your work do you consider is occurring within departments and how much of it is scrutiny from the outside?

Minas Jacob: The two go hand-in-hand. When you say "scrutiny from the outside", I would say it is actually pretty much impossible to do scrutiny from the outside. Unless you are just going to be looking at people's electricity bills or statements that Government departments produce, you have to work with departments to understand their circumstances; otherwise you are producing watchdog reports, or attempting to, on information that doesn't even exist, for example. So you need to understand their circumstances, their challenges, their blocks and enablers. Then, when you actually produce a formal assessment, you need to test that with the department because you may have got it wrong. It is difficult to actually separate the two out to say, "This is outside and this is inside," but you can separate them in terms of, at one level, assessment which is on actual performance out there, as it were, which is the indicators—DEFRA has an Indicators in your Pocket booklet, which we don't produce— and the focus of our work, which is on the drivers of performance, or what actually makes it happen.

Farooq Ullah: Can I just add there that it is important to note that scrutiny work is not static. It's very evolutionary and evolves over time in response to the needs of the people we work with. This requires, as Minas and Andrew pointed out, close liaison and day-to-day interaction with officials to understand their needs and provide them with effective scrutiny. Scrutiny is a means to an end, not an end in itself. Ultimately our intent is to build capability through scrutiny and not just to produce reports and then walk away from them. The point is that you need to have a very close understanding of where sustainable development in Government is going by working day-to-day with the officials and people who are responsible for the delivery of the agenda.

Andrew Lee: I would add—if that's okay—the sort of approach we've used is very different, dare I say, from a PWC or, can I say, a Philip Green approach and hopefully a lot more cost effective. The analogy I would use is that if you were looking at the household energy efficiency in your own home, it is one thing for someone to produce reams of data saying how much energy leaks through the windows and how many millimetres of loft insulation you've got, but actually what you want is someone to tell you what to do. What do you do about it? Our interest has always been in getting the performance to be better. So, although we rather enjoyed our traffic lights and league tables, and seeing Secretaries of State held to account on departmental performance, our objective has not been to see red lights. Our objective is to see green lights and to try to help those departments achieve that. I know you can argue that you can separate the two things completely, and separation of function is important, but I think that approach has really given benefits.

Q9   Mr Spencer: Can I ask you about devolved Administrations and how you anticipate working with them in the future?

Andrew Lee: Of course, yes. One of the interesting things was that when Securing the Future, the then SD strategy, was launched, it was, as you all know, launched by four Governments, not just one. Each devolved Government has gone its own way, as it should, to tackle this. The Scottish Government took one approach through five overarching goals for Government. The Welsh Assembly Government, of course, has a statutory duty, a founding principle, of sustainable development, so it's always had that hard-wired. It is different again in Northern Ireland. What we've tried to do is work with the flow of those Governments and work with the way they want to tackle SD, so it is not about the polemic or rhetoric, it is about how they want to do it.

  What's clear now is that they're still deciding where to go. In Wales we know that there is a strong view of the Minister to go for a stand-alone organisation, a sort of sustainable futures organisation in Wales, probably by integrating different Government bodies so it's more efficient and saves money but it's also more effective. In Scotland, the jury is still out and they're looking at committee arrangements inside Government, but also perhaps at the external, "Do we need some sort of support and advice embedded in a body outside?"

  We've always celebrated the diversity. We think it's great. Devolution football is fun. You know, not every Government has a monopoly on common sense. The Welsh Assembly Government has got a founding principle. It doesn't mean necessarily it's the most sustainable, but it's an interesting approach. I think there's a lot to learn. Actually one of our issues that I hope you will be picking up is how are the four Governments going to work together on this, particularly in the lead-up to Rio plus 20? At WSSD in Johannesburg, the last Sustainable Development Summit, the First Ministers played a very strong and effective role alongside the UK Government, and I'm sure they will want to do that again. We don't want to lose that kind of lesson learning between the different countries, I think.

Q10   Mr Spencer: Can I ask you about targets? How useful are Sustainable Development in Government and the SOGE targets in delivering the transition towards sustainable development?

Minas Jacob: Can you repeat that question, please?

Mr Spencer: Yes. How important are both the SOGE targets—

Chair: That is Sustainable Operations on the Government Estate.

Minas Jacob: Yes, yes, okay.

Mr Spencer: —and Sustainable Development in Government. How important are they, and do they assist?

Minas Jacob: Well, the truth is they clearly have assisted to put sustainable operations and procurement high up on departments' agendas. They have helped to deliver results—not on their own. They do require strong leadership to drive them through, and we believe the targets themselves need to be stronger in particular areas. But the truth is there have been significant improvements recently. Those improvements now need to be driven forward with greater ingenuity and innovation to drive improvements beyond the Government Estate and narrow environmental limit of targets, but I think they are one of the measures that has helped improve performance.

Q11   Mr Spencer: Are there any quick wins that spring to mind?

Minas Jacob: There are many quick wins. We have listed them in our recent report, but, if you think about more robust demands management as probably being top of that list, there are so many examples. DWP, for example, extended the life cycle replacement of their computers from three to five years and have saved something like 139,000 computers and something like £35 million, in addition to uncalculated savings on carbon impacts through supply chains. That is just one example. At the moment we don't have robust demand management processes across Government, so we were hardly surprised when Philip Green made similar statements in his recent report, because this is exactly what we've been saying for the past four years.

Farooq Ullah: The development framework is an important measure of transparency about what the Government intends to achieve on sustainable operations, but there are other mechanisms which have to go along with any such framework that actually ensure delivery: delivery plans, what will actually be achieved and how it will be done; monitoring and reporting mechanisms to ensure feedback and openness to public as well as the effective scrutiny that we've been talking about all along. These are the important things. The targets themselves haven't done anything. They're just a framing of what Government intends to do. It's a full system that needs to be put in place.

Q12   Mr Spencer: CESP is located in the Office of Government Commerce within the Cabinet Office. Does it have the resourcing and impartiality to report on Sustainable Development in Government without the SDC's support?

Minas Jacob: I think it does, although from conversations I've had with CESP, as we call it, they are equally worried about their future, so that's something that you might want to look into. The Centre of Expertise in Sustainable Procurement was created as a result of our recommendations two or three years ago. We have worked very closely with CESP and we have supported them, including advising on developing a sustainable procurement vision and seconding one of our key members of staff to actually help them develop the Government's operational delivery plan. I think they have been pivotal in driving recent performance improvements, and we've said so in our report, but our roles are different.

  From the outset, certainly on my taking up the head of the watchdog role, we saw our job as to help embed these processes back into Government. So whereas my job and Farooq's job started by including data collection, we said, "That's not our job to do that. That's Government's job to collect data and report on its own performance." Our job is to report on the higher level of that performance, challenge that performance, make the links between that performance and broader policy aims and make recommendations for change. CESP, in short, was a good idea. We think they've done a good job. They were created as a result of our recommendations. We worked very closely, but we do have different roles. They are closer to the detail and the data than we are.

Q13   Mr Spencer: If you guys aren't there, do they have the expertise to be able to do it all?

Andrew Lee: Not for doing the whole thing, no. CESP is very focused on operations and particularly on procurement. That is what it was set up to do, quite rightly, and it is doing that job very assiduously. The other issue is that there is such a focus now on carbon. I mean the 10:10 commitment is great in itself—nothing against that at all—but there is a danger that Government policy becomes driven by boiler replacement issues. We heard a senior director in DECC telling us the other day that they have energy reporting every five seconds updated on the website. This is fine, but it's a very, very narrow focus just on one aspect of sustainable operations and sustainable policy. So that needs to be got right—of course it does—but it is about more than boiler replacement. It's also about water use; it's about food procurement; it's about a whole host of other very, very important issues.

Q14   Zac Goldsmith: Theoretically, how could the remit of that organisation be expanded to include the broader sustainability criteria? Is there any relevance, is there any role there, for the Green Book in your view, which also has a focus principally on carbon?

Andrew Lee: Yes. I might ask my colleague, Shirley, to talk a little bit about that because there is potential, obviously.

Shirley Rodrigues: I think, as Andrew and Minas have talked about, CESP is really about the sustainable operations for procurement, and really the Green Book is about all investment decision making at Government level. It's one of the tools that Government uses to look at its impacts in terms of sustainability. However—we talked earlier about successes, failures and barriers—the tools to help officials make those decisions are very weak, and we've worked very hard with Government to try and improve them. We've made some headway in that, in that the Green Book definition or the Green Book guidance doesn't really reflect environmental limits or social impacts very well. It's very biased to trying to achieve economic outcomes and gives prevalence to monetised benefits of any investment decision, so it starts to skew away from giving a true sustainable development impact of a particular policy or initiative that you want to implement.

  As I've said, we've been working very hard on that and I think that's one of the issues that DEFRA and the Secretary of State at DEFRA has said that they want to focus on. We would absolutely urge that the momentum has to carry on with that to make sure that that rebalancing happens. But there is a whole host of other tools and guidance that also needs to be improved as well. I am not sure CESP is necessarily the right place to do that, but as part of its decision making it would need to use those sorts of tools too.

Q15   Chair: Just before we move on, you've talked about CESP having an important role to play but it's very narrow in detail. Where is the wider remit or where should the wider remit actually be, given that you come to an end at the end of the financial year? Where do you think that overall remit is to make sure that accountability happens, that you currently do?

Andrew Lee: Yes, and clearly that's what the Government has to decide and you will be asking. In our view, I said it has to be led from the top. There needs to be Cabinet level engagement, by Cabinet Ministers. There needs to be Cabinet Office involvement. There's been a long debate about whether sustainable development should be in the Cabinet Office going back way before I got involved with it, but I think there is a good argument for that because it shows it's cross-departmental. However good DEFRA and DECC are at providing support to other Government departments for what they're doing, it needs to come from the centre.

Then there is the operational machinery, whatever that is. You could put in better machinery—you could put in an incentive-based system rather than just a target-based system, or you could put in absolute rather than relative measures. At the moment it's okay for one department to use twice as much water per head as another provided they are all improving. Well, why? Are some civil servants washing twice as much? What's going on? I think the operational bit needs to be clearly embedded somewhere in Government. CESP does some of that now. It could be expanded. The OGC could take on more of that role—of course it could. You need Cabinet Office leadership because there's a policy dimension to this. You obviously need the scrutiny and holding to account, which is what you are looking at taking on.

Chair: On that point, Simon?

Q16   Simon Kirby: You mentioned leadership. Obviously leadership is vital for success. You also mentioned earlier that the former Prime Minister had lost interest. Do you think he'd lost interest in sustainable development or just the SDC, and why was that?

Andrew Lee: Undoubtedly both, I suppose. No, I don't know. I think genuinely when Tony Blair started this initiative he was interested in it, but what happened is the focus became more and more on the international leadership and on climate change. Now I can understand that. Climate change is a very pressing, very urgent, example of unsustainable development—the consequences. It is vitally important and it's fantastic we've got the Climate Change Act and we've got the carbon budget. But I think the wider plot was lost because it's not just about carbon. It's about biodiversity; it's about land use; it's about soil; it's about equality; it's the ability people have, if you like, to live more sustainably, what access to services they have.

I think gradually that did unravel because the leadership started with the Prime Minister and it was then weaker. I don't think Gordon Brown was interested in it. The leadership at official level started by being driven by Permanent Secretaries and was then devalued. As I say, some departments really went with it—you are going to hear from one in a minute, in DH—and others, the Treasury notably, just said, "Yah boo sucks. I'm not really interested in this. We've got a Sustainable Development Action Plan, but it's more about how many cars we use and how we heat the building than it is about how our economic policy is pursued."

  I thought of two examples of the consequences when we were coming into this session. One would be the way we have unwittingly in Britain walked into a situation where we are designing obesity into our local neighbourhoods, which is costing the NHS billions. We all know; we're trying to tackle that problem now. That's intimately linked to people's access to public transport, to their ability to be mobile, active citizens, and also to well-being as well as obesity, which is linked to access to nature as well. Another example would be energy policy, where we've seen that over-reliance on market mechanisms and over-reliance on doing everything you do through utilities delivering to households has now run up against the buffers, which is why both the previous Government and the new Government are in a bit of a panic now about what to do about it.

  The reason I use those examples is that this is what we're talking about, when we speak about sustainable development thinking. It's not something else you do when you've got time left over from those issues. It's about how you think about the long term, the social, the environmental and the global consequences of the direction of policy. We can see this in our strategic defence review, in pensions reform, in welfare package. So that's what we're talking about. I think the opportunity was lost, actually. There was momentum built up and then it was lost. The tools are okay in themselves, but frankly, you've got a Sustainable Development Action Plan in your department? Who gives a stuff unless the Perm Sec and the Secretary of State are saying, "We need to be the best at this. It's really important for our performance. We are going to get punished by the Treasury if we're not performing on these sustainable development criteria"? So it didn't flow through sufficiently.

Q17   Simon Wright: I was going to ask some questions on the SD Action Plans, and you've already touched on some of the problems. What feedback have you had from the departments themselves about the value and how they could be improved and made more effective?

Farooq Ullah: We've had very positive feedback from departments, and all organisations in central Government have come to us repeatedly for advice and support in developing them. A good example is the Foreign and Commonwealth Office who, after suffering a red light in an assessment of the quality of their plan, took it to heart and developed an integrated approach to driving sustainable development through all aspects of its business planning. It used engagement across the department, including throughout the world, to improve the way in which the Foreign and Commonwealth Office operates and delivers its services. It's made great steps forward from being one of the worst performing departments to probably one of the departments that has best integrated sustainable development through everything it does.

  Another good example is the DVLA—the Driver and Vehicle Licensing Agency—which has decided to take the bold step of not having an SDAP but instead integrating sustainable development into its central business reporting process. It's important to understand that an SDAP is an important starting point as a stand-alone report, which helps an organisation build up its ability to understand the issues and impacts it has, but then over time it should be integrated into the central reporting process.

Minas Jacob: Can I just add that there have been literally hundreds of changes to draft plans as a result of our feedback, all of which we have tracked and can provide you with more information on, department by department, agency by agency? The plans come to us in draft form. We do a very thorough analysis. We give very specific feedback. Then there is ongoing discussion, obviously, but literally hundreds of changes across Government. What concerns me, frankly, is that even if we move to a point of more integrated reporting —which, by the way, the SDC has been calling for from Government for over four years now—it doesn't bypass the need for somebody to actually look at departments' plans and check up how robust they are and whether they're actually fit for purpose. Integrated reporting does not bypass that need. Somebody somewhere still needs to cast an eye over these. At the moment, it is the SDC. We don't know what plans Government has in place for the future to check Government policy plans. At the moment there's nothing.

Q18   Simon Wright: Okay, thank you. Are there some departments, some agencies, that have struggled to engage in this process, and, if so, which are those and has there been any work to bring them more into the process?

Farooq Ullah: Yes. The different organisations are all at completely different levels. We've done assessments over the past few years which show that departments are at very different levels. Treasury is always separate and, as I mentioned, Foreign and Commonwealth Office traditionally was very poor. DECC has struggled currently to get its own Sustainable Development Action Plan up in place nearly two years after its creation. The context though needs to be taken into account. It's not so much who's good and who's bad: it's where you are on the journey that needs to be considered, and those who are lagging need support—centrally from Government once we cease to exist—to ensure that all people of all organisations are brought up to a certain standard, a level where we can assure the public that they have a good understanding of their own sustainable development impacts.

Andrew Lee: I think Farooq is being very polite and tactful. I think there are two things actually that I've noticed over five years at the SDC. The first is that departments that have big operations kind of get this, because it's a bit like a big company. Your Perm Sec is the chief executive. You don't want to be wasting money on energy or whatever. The MOD is an interesting example of that, which of course is massive. 60% of the impact of Government operations is MOD—that's going to become rather less presumably under the spending review proposals. So one thing is that if you've got operations you can do it, but then you get the corollary of that, which is departments who have a relatively small operational impact but huge policy influence—I mentioned the Treasury, and the Cabinet Office is an interesting example—have struggled much more. Some have been unwilling and some have just struggled, I think, with how you actually do this. That is where I think DH and DE—or DCSF as it was—are interesting models for you to look at, because they really have tried to use sustainable development and to develop a sustainable schools policy, to develop a toolkit for the NHS and so on and so on. They're in the middle of trying to do operations and policy.

Q19   Zac Goldsmith: Can I quickly ask, where an individual department has performed well, and you've named a few, how much of that is down to pressure from the Minister as opposed to pressure from department officials? I am interested in the dynamic. If you are setting out to apply pressure in a department, where would you most effectively apply it?

Andrew Lee: I suppose the easy answer is that it has to have ministerial leadership. There have been cases of very good initiatives driven by officials, but they will tend to run into the buffers sooner or later. The sustainable schools policy, as previously pursued by DCSF, basically went down the tubes because Michael Gove came in and said, "No, I want to do things differently." I think you've got to have a Minister behind it, but having a Minister behind it is not enough. Charles Clarke under the previous Government, and Peter Hain, when he was at Northern Ireland, were both examples of Ministers who really drove through with a cart and horses sustainable development policy, pretty much with grudging acceptance from officials, and then it backfires of course because it doesn't stick unless you've got it at all levels—it's in performance objectives, it's in the day job for everybody.

I don't claim unique expertise on this. It is the same as any organisational change. You've got to have leadership at the top, but you've also got to have really active participation and engagement from the people doing the job, otherwise it will just be a flash in the pan. The Minister moves on. I think I dealt with four Housing Ministers in my previous role. I was getting dizzy after a while, going into the same office and having the same conversation about the existing housing stock with a new Minister. Unless the officials at senior level get it, it ain't going to happen. So, it's both, I think.

Q20   Dr Whitehead: The proposed or suggested arrangements for oversight of sustainable development would presumably fold into Cabinet Committee in the future. How do you think that might work?

Shirley Rodrigues: Shall I take that one? We've had some discussions or we've certainly sent advice in to the Cabinet Office Minister, Oliver Letwin, advising on how we think it might work. Essentially, as Andrew has already said, it absolutely needs the Cabinet Office or a Cabinet Committee—some sort of structure that takes sustainable development in its remit. The options vary from having a separate Cabinet Committee or Cabinet Sub-Committee. I think discussions are now focused on possibly incorporating sustainable development into the Home Affairs Committee, which is fine. Along with all the comments that we've made here, it really depends on how it's delivered. That's fine as long as sustainable development isn't just seen as a standing item on an agenda that you look at, maybe once a quarter, look at a few indicators and then leave it. It doesn't really pick up the international aspects or the fact that sustainable development is a cross-cutting issue. How it is going to be looked at and implemented is going to be really critical.

Is it going to be supported by some sort of access to expertise, both internally within Government but also externally to a body of expertise that we've had at the Sustainable Development Commission very cheaply through a series of commissioners over the last 10 years who have been experts in their field? Those are really the big issues.

The biggest issue I think for us, certainly on the policy side, is that we have been able, alongside the policy we've talked about—co-development of policy and helping departments look at policy—is to look at the big wicked issues, the massively important issues that run across Government, which aren't being looked at, partly because they're so difficult. Some of the reports that the commission has produced over the years around energy, behaviour change and moving to a more sustainable economic system—those are really big issues that fundamentally will change the way the UK moves forward and how it operates in the international arena.

We saw this with the Public Accounts Committee comment about the lack of strategy or strategic vision. Who's looking at it at Cabinet Office level or Cabinet Committee level? Well, we would see a sustainable development Committee doing exactly that. The sort of issues that have come through the commission over the years have been those massively important issues that are so difficult but need an airing amongst a group of Ministers that come to some sort of consensus about how you move forward that doesn't exceed environmental limits and doesn't exacerbate unfairness. Those discussions have to be held at ministerial level, with Prime Minister or Deputy Prime Minister leadership.

Q21   Dr Whitehead: The Cabinet Committees are not resourced in their own right. Referring to Caroline Lucas's earlier question, do you have any thoughts on how such quite important questions about watchdog roles and resourcing of that might run alongside such Cabinet Committee oversight?

Shirley Rodrigues: Again, we have advised the Secretary of State at DEFRA, who is the lead for sustainable development, and Oliver Letwin and Chris Huhne, who all have a role in agreeing what happens in terms of embedding sustainable development in Government. Currently there are some 20 or so policies and research analysts—these are over and above the watchdog staff that Minas has talked about—who provide that work with departments in terms of co-developing policy and so on, but then provide that sort of wider expertise to deal with those big issues. We have absolutely no idea how that expertise is going to be provided for, either to the Environmental Audit Committee in terms of the watchdog role or to the policy advice to Government. We would see that as additional. The expertise we provide is very specific around sustainability. It is not just policy advice on planning or education or health. That is the missing bit which I think will drop through the cracks, and we are not sure how that is going to be provided yet, but we've asked the question and I'm sure that you will too.

Q22   Dr Whitehead: Perhaps I could touch on a possible example. The Treasury Green Book on procurement has interesting guidelines on green procurement, but on the other hand apparently a number of contradictory guidelines in terms of what is value for money and various other things. If you are a procurement officer and you have all this in front of you, and you presumably wish to keep your job, I guess you would look at some of those guidelines, attempt to reconcile the inconsistencies with other guidelines and then procure on the basis of what appear to be the overriding guidelines as opposed to the advisory guidelines; and therefore you will probably not procure very sustainably. What mechanisms would you see in the context of some sort of Cabinet Committee oversight of reconciling those sort of issues, where a department clearly has put into its own guidelines its own view of the extent to which sustainability might trump other issues which it also considers important?

Shirley Rodrigues: I think the first thing is that there are some tools, and we have talked about some of those already—the Green Book—which are imperfect because the guidance has not dealt with those issues. We've been working very hard with the Government Economic Service and the Better Regulation Executive and others to try to exactly sort out those issues. The messages we're getting back through the SDAP process and through departmental contacts is, "It's confusing and how do we get the right answer?" That needs to be sorted out, but I think overarching for me would be the fact that the sustainable impact test is seen as an add-on test, to be done after or alongside other impact tests. It is not seen as the first thing you do to identify what are the sustainable impacts, tensions or complexities which then throw up those sort of issues that you need to look at.

Then, in terms of procurement, some of this will be a political issue; some of it has to take into account money, budgets—you know, this is the real world. But I think the first thing is understanding that there are environmental limits that have to be maintained, and there are social impacts and other issues that are also priorities which Government has set out. One of the issues for us is that we still haven't had a statement yet from Government about what it thinks are its sustainable development priorities, which we would call for urgently because that would help then guide people in terms of policy decisions or procurement decisions or whatever.

Farooq Ullah: As you readily point out, there is a lot of supplementary guidance and conflicting guidance around the Green Book and decision making in Government. There is some good work going on, and Shirley mentioned the Government Economic Service and the newly formed Social Impacts Task Force. The issue is that the Social Impacts Task Force in particular is seeking to produce supplementary guidance for the Green Book and the Magenta Book on how to measure social impacts of any decisions—investments or otherwise. The problem and the major risk is that the supplementary guidance will just continue to be ignored. This needs to be revised. The Green Book needs to be overhauled and any new developments and understanding of how to measure impacts—environmental, social, economic—needs to be put in a co-ordinated integrated fashion into a much better, more concise Green Book, which allows a user, practitioner, procurer—whomever the role is—to understand all types of impacts of a decision, to deal with the interplay between those impacts and to find any mitigating measures which should be put in place before a final decision is made. This includes looking at monetised costs and benefits as well as non-monetised costs and benefits, and putting it all in an upfront summary for ministerial decisions.

Andrew Lee: That does rather bring us back to this issue of indicators. I know this can be a very arcane discussion and some of us have lived and died on this for years, but unless there is something clear in place about how the Government intends to measure its progress, and how it is going to measure the progress that the country as a whole is making, which balances economic, environmental and social aspects, we are building on sand. How do you apply the Green Book to Heathrow airport or to the Severn tidal barrage, never mind sort of day-to-day decisions, unless you can be pretty clear how you're measuring those three things? Sustainable development means you've got to make progress on all three at once, or at least with the cumulative decisions you make—it's sometimes hard to apply it to one individual decision, but over time that cumulative impact needs to be measured.

What we are hearing at the moment is a lot about input/output measurement, which is fine. Of course you need to do that, but that could be just measuring for the sake of it—the cost of everything and the value of nothing. But how are we going to measure progress towards or away from sustainability? It's not just about well-being; it is well-being, but it's more. It's not just about environment; it is environment, but more. It's not just about conventional economic measures. This is what Cabinet Ministers ought to be fighting about. They ought to be doing this transparently in a forum where it can be seen and observed, and they ought to be applying these principles to how you put these measures in place in Government, and then add to that—

  Chair: We've almost come to the end of our time. I know that Zac Goldsmith wishes to come in. I'm not sure if any other members of the Committee want to catch my eye, but Zac?

Q23   Zac Goldsmith: Thank you. I have a very quick question. In terms of the priorities of this body, the Environmental Audit Committee, obviously there is a huge range of concerns and issues and it is not practical to imagine that we can take on all of the work that you've done. For all the obvious reasons, that's not going to happen, but there are priorities, and I suppose my question is: how high up the list of priorities, in your view, should be the goal of helping the Government establish that mechanism you just described for really accounting for natural capital, so that every decision by every department is judged on the basis of how it takes from or adds to Britain's real natural wealth? For me that's a big priority, but based on your experience as the SDC and your knowledge of this organisation, how high up the list of priorities should that be?

Shirley Rodrigues: Massively high up. I think it is one of the issues that we have struggled with over the years—the issue of environmental limits and valuing natural capital. We know that DEFRA has tried to do some work on it and has got nowhere. We have started some work which will leave some challenges, I think, for DEFRA going forward. Because of that, and because of the way the Green Book is configured, it's meant that people start obviously looking at the economic issues, with maybe a bit of social and maybe a touch of carbon. It doesn't give you that whole rounded sustainable development approach, which is absolutely critical.

  I think one example you might want to look at would be the abolition or the moving of the Infrastructure Planning Commission into CLG. Major infrastructure applications that were going forward—we have a statutory role to look at that. Nobody is looking at that now. One of the big issues that we raise in our evidence would be: who is going to look at the cumulative impacts against environmental limits? For example, on carbon, we have carbon budgets. That is the one environmental limit that is quantified and could be measured. The IPC, as was then, were told it wasn't their job to look at the impacts on carbon cumulatively. So you could have been in a ludicrous situation where they were approving a whole series of new energy infrastructure, transport infrastructure, that would have had massive impacts on carbon budgets, but it wasn't their role to report on it; it wasn't the Climate Change Committee's role to monitor that, either. We could be breaching environmental limits on carbon; nobody is looking at that. The same issue on biodiversity. It is much harder to manage but we've had various reports coming out about how important ecosystems, TEEB and so on, are. It is a massive issue that I think is a big priority for the Environmental Audit Committee to look at.

Farooq Ullah: I think, at its most basic, it is absolutely fundamentally important that Government understands the link between natural capital and environmental capital and well-being, both economic well-being and societal, social, well-being. If they can understand that link, the flows of natural capital to well-being, it would be a massive step forward in decision making.

Q24   Chair: Thank you very much indeed, all of you. I think time has run out for us. We are very conscious of the work that you have done over the years that you've been in existence. Thank you for that. This is obviously an ongoing debate, so if there are further issues which you think need to be put into further evidence to the Committee, please let us have it.

Andrew Lee: Thank you, and the very best of luck in your enhanced role.

Shirley Rodrigues: Thank you.

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