Equalities analysis and the 2015 Spending Review and Autumn Statement: Government Response

Second Special Report

The Women and Equalities Committee published its Fourth Report of Session 2016–17, Equalities analysis and the 2015 Spending Review and Autumn Statement, as HC 825 on 18 November 2016. The Government Response was received on 17 January 2017 and is appended to this report.

Appendix: Government Response

Part 1: Introduction

1)On 18 November 2016, the House of Commons Select Committee on Women and Equalities published its fourth report of the 2016–17 session, titled “Equalities analysis and the 2015 Spending Review and Autumn Statement”. This paper sets out the Government’s response to the conclusion and recommendation of that report.

2)The Government welcomes the Committee’s important work in scrutinising equalities issues. The Government remains committed to addressing equality issues and ensuring it remains accountable for its policies and decisions. It is important that during the development of policies, including those announced at fiscal events, decisions are informed by a proper consideration of impacts for those people sharing protected characteristics and wider equalities angles. The Government strongly adheres to these principles, and will continue to keep its practices under review in order to help achieve ongoing improvements.

3)Past reports and dialogue with the Equality and Human Right’s Commission (EHRC) on the topic of best practice on Public Sector Equality Duty (PSED) compliance have usefully informed the Government’s approach to date (as explained to the Committee in written evidence provided on 10 March 2016). This input and the Select Committee report will continue to inform the development of our approach, including in the planning of spending reviews and other fiscal events.

Part 2: Government response to the Committee’s conclusions and recommendation

4)The Select Committee’s report contains the following recommendation:

The lack of information provided to us demonstrates a concerning lack of transparency. The promotion of transparency is a central aim of the Public Sector Equality Duty requirements, but the Government’s current position does not engender confidence that these requirements are being complied with. In order to maintain public confidence that the Public Sector Equality Duty is being fulfilled, we recommend that the Treasury be independently evaluated on how robustly it has complied with that duty in the 2015 Spending Review process, and on how it can improve its equalities analysis. This evaluation should be carried out by an organisation with the requisite level of expertise. Similar evaluations should be commissioned for the equality analyses accompanying all future spending rounds and fiscal events.

The Government’s approach

5)In line with the Government’s legal responsibilities and policy commitment to promote fairness, HM Treasury and other Government departments fully comply with the Public Sector Equality Duty (PSED), including with respect to all publication requirements. When working on policy, including measures announced at fiscal events, Ministers are advised of the impact a decision has on protected groups and equality issues, and this is taken into account when a policy decision is made.

6)In the case of the 2015 Spending Review and Autumn Statement, advice on the nature and scale of equality impacts was an integral part of the policy advice provided to ministers on different measures as they were developed. Advice was also provided on the scope for mitigating significant negative differential impacts of measures. Care was taken to ensure that all those involved in the process knew of their responsibilities to cover equality impacts. The internal Treasury governance and support on this work ensured that it was done to a standard that met both the Government’s legal and policy commitments on equalities. The Treasury Spending Review guidance to other Government departments set out clear expectations to departments on their own input to the Spending Review.

7)HM Treasury makes available a range of information in line with its commitment to transparency and accountability. This approach is also shared by other Government departments as part of their normal policy work. To accompany the Spending Review and Autumn Statement 2015, the Government published an assessment of equality impacts. This was aimed at promoting transparency and goes beyond any legal requirements. However, it is important to understand the status of this publication. It does not represent the sum-total of the more detailed confidential advice on equality impacts that formed part of the policy advice to ministers as measures were developed. This publication, along with the letter of 10 March 2016 from the Exchequer Secretary, represents the Treasury’s practice in recent spending reviews to release the information it can on equalities issues. To support the process further, additional evidence was provided to the Committee on 10 March and 23 August 2016, answering specific questions and providing detail on the inter-governmental guidance on the assessment of equality impacts during the 2015 Spending Review.

8)The Government takes a different view to the Committee about the level and appropriateness of the transparency and release of information to date. As the Treasury’s Permanent Secretary set out in his letter to the Committee on 23 August 2016, “successive governments have recognised the need for candid discussions between departments and the Treasury during spending reviews”. The release of these records would compromise that process and the confidential space for discussing the implications of policy options between ministers and officials. We therefore do not agree with the Committee’s recommendation that the Government’s approach be independently evaluated. The Government believes that the right balance was struck at recent fiscal events, including the Spending Review and Autumn Statement 2015. It is important that this careful balance between transparency and confidentiality is retained. We will therefore keep this under review, including in the planning for future fiscal events and spending reviews.

Role of the Equality and Human Rights Commission

9)The Equality and Human Rights Commission (EHRC) provide valuable work in promoting equal opportunities, encouraging good practice and working towards the elimination of unlawful discrimination. The EHRC are able to scrutinise government departments and hold them to account for what they do. As well as this, the EHRC report on any concerns they might have on policies and undertake broader reviews, such as their “Is Britain Fairer?” review in 2015.

10)The Treasury’s management of fiscal events (including spending reviews) has also benefitted from our engagement with the EHRC. They are able to provide scrutiny and advice on compliance with PSED across public sector organisations. We recognise that they do not agree with us on some issues, such as the extent of the methodological barriers to us assessing cumulative equality impacts as part of the Treasury’s distributional analysis. However, our past dialogue with the EHRC has usefully informed our internal planning. This includes, for example, the importance of timely engagement with Government departments and avoiding the risk of impacts between different policy areas not being considered in a sufficiently joined-up manner.

Compliance with equality duties

11)The Committee’s Report makes specific references to the PSED and the Government’s compliance with it. As the Committee states, the Government is required to fully comply with its obligations set out in the PSED. The Government fully complies with all legal obligations in this area, including HM Treasury in the context of the 2015 Spending Review and Autumn Statement. The PSED requires ministers to pay due regard to the aims of the duty (i.e. preventing discrimination, advancing equality of opportunity and fostering good relations between people who share a protected characteristic and those who do not) when developing policy. There is, however, no statutory requirement to prepare this information in a particular form or to publish ‘Equality Impact Assessments’.

12)Public sector organisations are required to promote transparency over their compliance with the PSED by publishing relevant information and equalities objectives. In line with these requirements, HM Treasury provides information on its equality and diversity pages of gov.uk (https://www.gov.uk/government/organisations/hm-treasury/about/equality-and-diversity). These pages explain to the public the Treasury’s approach to its legal compliance with the PSED. In particular, it states:

We are committed to fairness and, in particular, the promotion of equality of opportunity for all. Taking equality considerations into account in our work is an important and integral part of our approach as both an employer and a policy-maker …

When working on policy, our officials look at the impact a policy option might have on those from protected groups, including positive opportunities for promoting greater fairness for them. They also consider if there are options for avoiding or otherwise mitigating against any negative impact on that group. Ministers are advised of the impact a decision has on protected groups, and this is taken into account when a policy decision is made.

Although the Treasury sets departmental budgets, it is up to each individual department to decide how they spend that budget. In deciding how the budget is to be spent, departments must consider the impact on protected groups. There are some policy areas, such as welfare, where the Treasury has a greater policy making responsibility”.

13)There is no specific number of equalities objectives required by the legal duty, but for the 2016–20 period, the Treasury has chosen to publish nine objectives — seven on its employment practices and two on its policy work. The objectives relating to policy work within the Treasury are:

Parliamentary scrutiny

14)Parliamentary scrutiny remains the cornerstone of ensuring transparency and accountability is achieved. This oversight ensures that government decisions, including those announced at fiscal events, are properly scrutinised. There are also a variety of opportunities for Parliament to hold the government to account over these decisions and policy announcements. This was seen in the case of the 2015 Spending Review and Autumn Statement. For example, the Chancellor was challenged in the House of Commons Chamber on the fairness of his statement, including for disabled people, women, and the young and old. An Opposition Day debate was also held on 10 December 2015 specifically on the effects of the Spending Review and Autumn Statement on women.

15)The 2016 Autumn Statement was also followed by parliamentary debate where the Government’s policies were further scrutinised in the context of equalities. An Opposition Day debate on the impact of the Government’s policies on women, held on 14 December 2016, enabled Members to raise questions and highlight any concerns. It also enabled the Government to set out the benefits to women of its fiscal policies and its commitment to addressing equality issues.

16)It is important to note that individual spending departments have responsibility for the policy areas that they cover and their equality impacts. Departmental Oral Questions can be used to question ministers on equality impacts of specific policy areas, as well as the Government’s broader equalities policies.

17)The Government welcomes the work of Select Committees in examining policy decisions and holding departments to account about issues across government. In addition to the work of the Women and Equalities Select Committee, other Select Committees have an important role too. They provide strong and often high profile scrutiny of the fairness of the policies and actions of their departments, including for those people sharing protected characteristics. In recent years, this has included the 2013 Business, Innovation and Skills Committee report on Women in the Workplace and the 2015 Work and Pensions Committee inquiry into disability employment gap.

18)Members and Peers can also question the government during the passage of legislation. This provides opportunities to examine any equality concerns with proposals and seek further clarification or amendment from the government.

Part 3: Conclusion

19)The Select Committee report helps highlight the importance of Government ensuring that its policies promote fairness (including for those people sharing protected characteristics) and of the role of transparency and accountability. These principles have been adhered to in respect of funding and policy announcements made at the 2015 Spending Review and Autumn Statement, other fiscal events, and in broader policy announcements.

20)We take a different view to the committee in regard to the Government’s record on transparency in respect of decisions taken at the 2015 Spending Review and Autumn Statement. We believe the evidence demonstrates a positive record here and as a result, we do not agree that independent assessments are necessary at this time or that they would add useful value. However, we will keep our equalities arrangements and processes under review. In addition, following the formal assessment of the 2010 Spending Review and follow-up reports by the EHRC, the Government has welcomed opportunities for informal discussions between its officials and the EHRC, including ahead of the 2015 Spending Review and Autumn Statement. We intend to continue this practice. We have not always agreed with proposals put forward by the EHRC and other equalities stakeholders, but we are committed to learning from past experience and seeking continued improvement in this regard.

27 January 2017