Select Committee on Environmental Audit Third Special Report



I am pleased to enclose the Government's response to the Environmental Audit Committee's Third Report on the Comprehensive Spending Review: Government response and follow-up...The Government is very grateful for this Report. The Committee clearly has an important role in the pursuit of cross-department environmental issues, and in holding departments to account on environmental policies.

26 June


1. The Government is grateful for the Committee's views, building on last year's Report. The Government has already done much to ensure that sustainable development is fully taken into account in the Spending Review 2000 [SR2000], building on the [Comprehensive Spending Review] CSR and taking into account the Committee's criticisms and comments. We set out below where we believe we can take on board the Committee's further recommendations.

[The Government must ensure that] sustainable development is firmly built into the objectives, process and guidance for the review from the start: the Deputy Prime Minister should not have to remind departments about the importance of sustainable development and the environment this time around.[4]

2. The SR2000 Guidance issued to departments lists sustainable development as a common issues for departments, along with equality, productivity, employment and employability, child poverty and Modernising Government. The Committee has seen the guidance, which points out that all departments make some contribution to sustainable development, and reminds departments that their Green Ministers should be fully involved in the preparation and conduct of the Review.

There should be a clearly auditable framework linking the principles, priorities and indicators in the sustainable development strategy to departmental programmes and spending allocations.

3. The Government will publish the key outcomes for the Review, including Public Service Agreements [PSAs] and the targets they contain, and recognises that the Committee will want to scrutinise them in terms of their contribution to the sustainable development strategy.

Green Ministers in all departments, supported by the Sustainable Development Unit in the DETR, must be able to demonstrate their integral involvement in shaping policy priorities and departmental bids and ensuring that adequate work is undertaken on contributions to sustainable development and environmental impacts.

4. The Government expects all Green Ministers to play an active role in their department's preparations for and conduct of the Review. In addition to the role given to Green Ministers in the Spending Review guidance, Green Ministers have discussed progress at both of their last meetings. As the Treasury's Green Minister, the Financial Secretary has also reminded all Green Ministers of their role here.

The Treasury should ensure that bids include environmental appraisals of the impact of policies, and should ensure that these are made available to this Committee (including screening statements concluding that full environmental appraisal is unnecessary).

5. The Guidance to departments reminds them that in evaluating policy choices they should be guided by the Treasury document Appraisal and Evaluation in Central Government (revised 1997) and by DETR's publication Policy Appraisal and the Environment: Policy Guidance (1998); these make clear the need to take account of environmental impacts, even when they cannot be easily quantified.

6. Primary responsibility for adequate appraisal of policies must remain with individual departments, and the Government expects that Green Ministers will ensure that environmental effects are into taken account in their department's proposals. In addition, [the Cabinet Committee on Public Services and Public Expenditure] PSX is mindful of the need to take sustainable development into account, including environmental appraisal of proposals. Final decisions on the format for the publication of the results of the Spending Review 2000 have not yet been taken but all the material issued will be made available to the Committee.

The Government should draw up an action plan with targets for identifying and reducing environmentally damaging subsidies and should ensure that new expenditure is addressing causes rather than symptoms.

7. The Government believes subsidies should be scrapped if it environmental harm outweighs benefit to society. The Government does not believe that it makes sense to consider the environmental impacts of expenditure in isolation to other impacts; this is against the principle of sustainable development, which requires an integrated consideration of environmental, social and economic issues. Departments should always look for opportunities to reduce, or preferably abolish, unjustified subsidies. The Financial Secretary has reminded Green Minister colleagues of the need to look carefully to ensure that their department's subsidies remain justifiable.

Departments should all include sustainable development as an explicit and consistent high level objective and PSA targets should reflect the greening government agenda including operations.

8. All departments are aware of the need to pursue sustainable development as a key Government objective. The Green Ministers first Annual Report, published in July 1999, set out how departments had taken account of sustainable development in their formal aims and objectives. This information will be updated in the 2000 Green Ministers Annual Report. The Government and PSX recognise the need for sustainable development to be reflected in departments' Public Service Agreements. Green Ministers have been fully involved in the preparation of their own PSAs and the extent to which these will include sustainable development.

9. There are already cross­Government targets in place for green operations including targets covering energy efficiency, waste management and travel plans. Departments are required to provide information on their environmental performance in Annual Reports. Green Ministers Annual Reports also contain a good deal of information about environmental performance across government.

While the Government placed the tax regime outside the scope of the original CSR we believe there is a case for taking a broader look at tax and spending proposals together given the number of areas where this divide is bridged particularly with regard to environmental taxes and hypothecation and ring­fencing (i.e. the Landfill Tax, the Climate Change Levy and proposals for the fuel duty escalator). In addition there is the hazy line between subsidies resulting from straightforward public expenditure and those arising from taxation foregone.

10. The Government would not expect to agree to spending proposals where there were more effective ways of achieving the desired outcome, including where appropriate tax reform.

4   All recommendations are from Third Report from the Committee, 1999-2000, HC 233, paragraph 25. Back

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