Appendix 1—Government response on
Embedding sustainable development: An update
Introduction
The Government welcomes the Environmental Audit Committee's
(EAC) report of 14 June examining Government's progress with embedding
sustainable development into its policies and operations and the
Committee's continued scrutiny in this important area.
The Coalition published its Mid Term Review[1]
in January 2013. This set out the progress of the Programme of
Government and priorities for the second half of the Coalition
term of office. The Mid Term Review indicated that the Coalition's
priority is to build a stronger, more balanced economy capable
of delivering lasting growth and widely shared prosperity. It
reinforced the Government's commitment to being the greenest government
ever. It also noted that in challenging economic times, the Government
is determined to meet our environmental commitments at the lowest
possible cost to British families and businesses. The Mid Term
Review also stressed that the Programme of Government was looking
to the long term interests of the country.
Sustainable development in Government
The Government's approach to sustainable development
was set out in its Vision for Mainstreaming Sustainable Development
in February 2011.[2] Defra
published a two-year progress report in May 2013 in conjunction
with the Minister for Government Policy.[3]
This report indicates that solid progress has been made over the
past two years with frameworks in place to support the embedding
of sustainability in relation to how policies are made, buildings
are run and goods purchased.
Key developments over the past two years include
the requirement for departments to include sustainable development
commitments in their business plans and to report on sustainability
in their Annual Reports and Accounts, the positive progress towards
meeting the Greening Government Commitments, and efforts to improve
the capabilities of Government officials through various approaches,
including improved impact assessment guidance and the inclusion
of sustainable development in the Government's Competence Framework.
However, the report also reflected that it would
take time to embed sustainable development fully across Government,
highlighting for example, continued efforts required by Departments
in relation to sustainability reporting, maintaining momentum
on the Greening Government Commitments and ensuring the results
of the baseline evaluation of environmental appraisal and sustainable
development guidance across Government are followed up.
There have also been a number of related actions
since the report was published in May 2013:
- Defra published the Government's
response to the consultation on Sustainable Development Indicators
in June 2013[4] and the
first set of revised indicators was published on 18 July 2013;[5]
- Business Plans covering the period 2013-14 have
been published and are available on the No10 website.[6]
Departments have set out more clearly in these how they are mainstreaming
sustainable development;
- Annual Report and Accounts for 2012-13 are now
being published and will be reviewed to see how they have improved
since last year;
- Defra published a Sustainable Procurement Guide
for Construction Projects[7]
based on learning from London 2012 on 18 July 2013.
Internationally the Government is playing a central
role in shaping the post-2015 development agenda. In particular,
the EAC will be aware that the UN High Level Panel of Eminent
Persons on the Post 2015 development agenda, appointed by the
UN Secretary General and co-chaired by the Prime Minister, reported
at the end of May. The report highlighted the need to put sustainable
development at the core of the post-2015 development agenda as
one of five key transformational shifts required to eradicate
extreme poverty. Further detail on this is provided in the Government's
separate response[8] to
the EAC's report on the outcomes of the Rio+20 Summit.
Response to recommendations and conclusions
The Government welcomes the EAC's recognition of
the areas where good progress has been made with embedding sustainable
development and notes the Committee's conclusions [1-5]. This
response is focused on those areas where the Committee has made
recommendations for further work or changes [6-10].
Recommendation 6. Defra must use the results of
[its] impact assessment audit to develop the guidance further,
and Defra and the Cabinet Office should include challenging departments
on such non-compliance as part of its Business Plan reviews. (Paragraph
20)
Government agrees that the evaluation of the application
of impact assessment guidance should be used to drive improvements
where necessary. The intention is to achieve this by means of
cross Government capability building. Departments are already
asked to identify how they are embedding sustainable development
into their decision making in their Business plans and Annual
Report and Accounts.
Government welcomes the EAC's recognition of the
work that has taken and is taking place to improve consideration
of social and environmental impacts, in particular in relation
to impact assessments. This recommendation relates to Defra's
baseline evaluation of environmental appraisal and sustainable
development guidance across Government. This study has looked
at a sample of impact assessments from a number of Departments.
As a baseline evaluation it should enable Government and departments
to track over time general improvements in the quality of impact
assessments. The interim report of the study was published on
31 July 2013.[9].
The second phase of the study includes more detailed
discussions with policymakers and analysts alongside deeper evaluations
of a selection of impact assessments. The study is designed to
support and provide suggestions on where any improvement can be
made in relation to guidance and/or capability building. The results
of the study will need to be carefully considered and will be
subject to discussion across Government before determining any
appropriate follow up actions for Government as a whole or individual
Departments if necessary. This will include discussions of the
Cross Whitehall Working Group on Sustainable Development and the
Cross Whitehall group on the Economics of Better Regulation
to explore how to improve the consideration of sustainable development
issues within their departments and whether any improvements to
the guidance may be necessary.
The Vision for Sustainable Development indicated
that Business Plans would be reviewed to ensure that environmental,
social and economic impacts are taken into account as far as possible.
Central Business Planning Guidance now requires departments to
provide separate information on their sustainable development
commitments and these are published on the No 10 website. Departmental
Annual Report and Accounts contain details of progress made on
sustainable development, including an explanation of how sustainable
development principles are embedded in decision making processes,
the Department's main contribution to sustainable development,
and progress made against sustainable development commitments
in the Business Plan. Government would expect that any actions
taken by individual departments to address the outcomes of the
Impact Assessment study, where appropriate, would be reflected
in their next Annual Report and Accounts or Business Plan refresh.
Recommendation 7. Defra and the Cabinet Office
should now review departments' first-year Greening Government
Commitments performance, in order to extend the ambition of those
targets which already appear to be readily achievable. (Paragraph
26)
The Government notes the EAC's recommendation
and welcomes the appreciation of progress already made towards
meeting the Greening Government Commitments [GGC]. However while
Government continues to review performance through its Home Affairs
(Greening Government Commitments) Sub Committee, we do not currently
intend to make changes to the targets.
The GGC targets are more ambitious than preceding
targets set for improving the environmental performance of the
Government estate, requiring far deeper cuts in emissions, waste
and water use in a much tighter timescale. The table at Annex
1 gives a comparison between the previous Sustainable Operation
of Government Estates' [SOGE] targets (2006-2011) and the GGC
targets. One of the stated aims of the GGC framework was to produce
simplified, top-line targets leaving departments the freedom to
approach them in the way that suits them best.
The Commitments have much wider organisational coverage
than the previous targets and represent a significantly greater
challenge. The first year results[10]
showed that whilst government as a whole is on track to meet the
targets, different departments face different issues. The requirement
to deliver further results year on year presents an increasing
challenge, as less complex and less expensive projects are undertaken
early in the process, and tackling further reductions pose greater
difficulties and require greater investment. The Minister for
Government Policy indicated to the EAC at its hearing of the 6
March 2013 that a balance needs to be struck between maintaining
the impetus for further improvement, and discouraging those departments
which are struggling to meet current targets.
It is not known yet whether the top performers noted
in 2011-12 annual reporting will be able to maintain their excellent
performance. Ministers will first and foremost seek to ensure
achievements are maintained and progress continues steadily within
this already ambitious framework rather than seeking to augment
targets in the short time left before the target year of 2014-15.
Recommendation 8. A commitment to deliver on sustainable
procurement should be in all departments' Business Plans, including
completing the revision of Government Buying Standards. Defra
and the Cabinet Office should identify poor compliance on reporting
sustainable procurement progress during the Business Plan reviews
and raise with the Treasury (who set the Annual Report requirements)
how poor performance should be addressed. (Paragraph 30)
Government notes the recommendation from the Committee
and supports its aim to ensure that Departments incorporate sustainable
procurement effectively. We intend to use the Home Affairs (Greening
Government Commitments) Sub Committee to address compliance.
The overarching aim of public procurement is to achieve
value for money, which is the optimum combination of cost and
quality over the lifetime of the project, meaning that Departments
should choose the most sustainable solution where it represents
the best value for money.
Departmental business plans already include a commitment
to sustainable procurement by dint of a formal obligation to the
Greening Government Commitments (GGCs). In terms of a commitment
to reviewing the Government Buying Standards, Defra is at present
continuing to update these 50 or so standards, but is also exploring
other means of embedding sustainable procurement.
The identification of poor compliance is done as
part of the process of monitoring compliance with the GGCs. Departments
are expected to report the use of Buying Standards in their procurement
exercises. Poor performance will be put to the Home Affairs (Greening
Government Commitments) Sub Committee in order to decide on which
departments should be approached to improve their performance.
This was not done for 2011-12 as quantitative reporting was new
to departments, but we anticipate poor performers being flagged
up in subsequent years to the Committee to decide on action.
In addition, Government departments which are in
scope and not exempted for reporting under the GGCs, (central
government departments, non-ministerial departments, agencies
and NDPBs) are expected to report on sustainable procurement in
their Annual Report and Accounts as part of their wider requirement
to report on sustainability.
Furthermore, Government has introduced a range of
measures to ensure that the huge purchasing power of the public
sector is used to support economic growth, including the publication
of procurement pipelines which give industry visibility of Government's
future need. It has also set an aspiration that 25% of central
Government procurement spend should flow to SMEs directly, and
in the supply chain, by 2015. In order to support delivery of
the aspiration, it has required all central Government opportunities
over £10,000 to be advertised on Contracts Finder,[11]
established departmental SME champions both at ministerial and
official level and abolished Pre-Qualification Questionnaires
for low value contracts. It has introduced a Mystery Shopper Service
allowing suppliers to complain about overly bureaucratic procurement,
and created an SME Panel where SMEs engage directly with government.
As a result of these initiatives, the proportion of expenditure
with SMEs increased from 6.8% in 2010-11 to 10% in 2011-12.
Recommendation 9. Defra and the Cabinet Office,
as well as the Treasury, need to take ownership of sustainability
reporting compliance, not least through their roles on the Greening
Government Commitments Sub-committee. (Paragraph 38)
Government notes the recommendation from the Committee.
Individual Departments are currently responsible for meeting compliance
with the sustainability reporting requirements in Annual Report
and Accounts and we currently have no plans to change these arrangements.
We are only two years into formal sustainability reporting and
need to give Departments time to make the necessary improvements
to their reporting.
Individual Departments who are in scope for reporting
(see recommendation 7 above) are responsible for ensuring compliance
with the sustainability reporting requirements of the Annual Report
and Accounts. The organisation's arrangements in relation to sustainability
reporting and internal assurance should be covered by the existing
responsibilities set out in its Governance Statement. As is already
the case with the annual report, external auditors will report
by exception where the information contained in the annual report,
including information on sustainability reporting, is inconsistent
with the information they have obtained as part of their audit
of the financial statements.
The scope of the Home Affairs (Greening Government
Commitments) Sub Committee does not extend to monitoring compliance
with the Sustainability Reporting annex of the Annual Report and
Accounts. Its terms are 'to consider performance and progress
on the Greening Government Commitments in relation to operations
and performance.' However, the ambition for GGC reporting
and the Annual Report and Accounts' Sustainability Reporting annex
continues to be to align the two as closely as possible. We would
therefore expect a high degree of consistency of information between
the two.
The financial year 2011-12 was the first to see sustainability
reporting guidance issued by HMT[12]
for Departments. We are now completing the second full year of
sustainability reporting. Guidance was issued to Departments for
2012-13, which also included actions taken as a result of feedback
received from Departments on the 2011-12 sustainability guidance.
Compliance issues should be expected given the relatively untested
waters of government-wide mandated sustainability reporting and
the ongoing evolution of the guidance issued, as well as the scale
of reporting and the amount of information required to fully comply
with reporting requirements. The National Audit Office briefing
to the EAC in December 2012[13]
stated "Government departments and central government organisations
in our samples have complied with the Treasury's FReM[14]
requirement to include a sustainability report in their Annual
Report and Accounts, which was a significant achievement."
There are no plans for Defra or Cabinet Office to
take on responsibility for sustainability reporting compliance
of Annual Report and Accounts. HMT is exploring a range of possible
options for future external assurance including full substantive
assurance on the data (financial and non-financial) and assurance
on the adequacy of the underlying data systems, which are subject
to further consultation with key stakeholders. There are no plans,
at present, for the NAO to audit these reports and external assurance
and verification of reported figures and information will not
be required for 2012-13 sustainability reports. HMT believes that
adequate consultation with key stakeholders is important before
further steps are taken in respect of the assurance arrangements
because, as the NAO highlighted in their December briefing, "there
is no generally accepted reporting assurance standard in place
and the wide range of international, national and sector specific
standards that are used by companies differ in their nature and
scope."
HMT would expect that as reporting requirements become
more stable and entities become increasingly familiar with the
reporting requirements, a higher rate of compliance will occur.
As part of capability building across Government, Departments
will continue to share their experiences and progress to enable
this continuous improvement. This includes Cabinet Office, Defra,
HMT and Departments contributing to any further development of
the guidance or support, should it be felt necessary. However,
as indicated by the Secretary of State for Environment, Food and
Rural Affairs Owen Paterson at the EAC hearing in March 2013,
it is for individual Departments to meet their responsibilities
for reporting compliance.
Recommendation 10. The Government should now explore
the scope for, as well as potential additional burdens of, introducing
for the private sector elements of Government departments' wider
sustainability reporting requirements. (Paragraph 39)
Government notes the recommendation from the Committee
and while recognising the value of sustainability reporting for
the private sector has no current plans to extend mandatory reporting
wider than greenhouse gas emissions.
The Government has recently introduced regulations
requiring UK quoted companies to disclose their greenhouse gas
emissions. This follows a significant amount of consultation with
the business and investment community and civil society organisations
over the last couple of years. In light of that recent consultation
and taking account of the need to balance the benefits of mandatory
sustainability reporting with the additional burden it would impose
on companies, we have no plans to extend mandatory reporting requirements
at present. It is important to mention that quoted companies are
already required to report on their environmental policies, including
the impact that the company has on the environment, and the results
of these polices. This will continue under the BIS reforms to
Narrative reporting that will come into force in October this
year.
The Government does, nevertheless, continue to encourage
voluntary sustainability reporting by all companies. This encouragement
includes the recent publication of updated guidance for companies
on how to measure and report their environmental impacts. The
Government also looks to the business community, investors, and
civil society organisations to continue promoting the benefits
of high quality reporting.
1 http://midtermreview.cabinetoffice.gov.uk/ Back
2
http://sd.defra.gov.uk/documents/mainstreaming-sustainable-development.pdf Back
3
www.gov.uk/government/uploads/system/uploads/attachment_data/file/200134/pb13914-susdev-progress2013.pdf Back
4
www.gov.uk/government/consultations/consultation-on-new-sustainable-development-indicators Back
5
www.gov.uk/government/organisations/department-for-environment-food-rural-affairs/series/sustainable-development-indicators Back
6
http://transparency.number10.gov.uk/content/cross-government-priority/sustainable-development Back
7
www.gov.uk/government/publications/london-2012-legacy-sustainable-procurement-for-construction-projects Back
8
See Appendix 2 below. Back
9
http://sd.defra.gov.uk/documents/Eftec-IA-baseline-study.pdf Back
10
www.gov.uk/government/uploads/system/uploads/attachment_data/file/69624/pb13846-greening-government-commitments.pdf Back
11
An online system which allows suppliers to search for information
about contracts (and tenders) of over £10,000 with Government
and its agencies. Back
12
http://webarchive.nationalarchives.gov.uk/+/http:/www.hm-treasury.gov.uk/d/2012_13_hmt_sustainability_reporting_guidance__mar13.pdf Back
13
http://www.nao.org.uk/wp-content/uploads/2013/03/EAC_briefing_sustainability_reporting_government.pdf Back
14
The Government Financial Reporting Manual (FReM) is the technical
accounting guide to the preparation of financial statements. It
complements guidance on the handling of public funds published
separately by the relevant authorities in England and Wales, Scotland
and Northern Ireland. www.gov.uk/government/publications/government-financial-reporting-manual
. Back
| 
