Embedding sustainable development across Government, after the Secretary of State’s announcement on the future of the Sustainable Development Commission

The Government’s response to the Committee’s first report:

Embedding sustainable development across Government, after the Secretary of State’s announcement on the future of the Sustainable Development Commission (HC 504)

This will be printed in a Committee report in due course

1. Introduction Page 2

2. Vision Page 3

3. Sustainable Development in Government Page 4

4. Response to recommendations Page 6

1. Introduction

The Government welcomes the E nvironmental Audit Committee (EAC) report on a subject that is crucial to our Programme for Government . We want to deliver growth and jobs, while at the same time "greening" our economy , protecting and enhancing our natural resources and ensuring greater wellbeing for all. This requires a horizon shift, looking to the long-term, whilst also addressing the short-term challenges we face. It has been particularly helpful to have the EAC’s input at this stage, to help us finalise our plans to mainstream sustainable development (SD).

In line with the coalition G overnment s commitment to increasing the transparency and accountability of Defra’s public bodies and to reducing their numbers and costs, t he Secretary of State for Environment, Caroline Spelman announced on 22 July 2010 the intention to withdraw funding for the Sustainable Development Commission (SDC) at the end of the current financial year. As part of this announcement, the Environment Secretary jointly with Chris Huhne , Secretary of State for Energy and Climate Change , declared a commitment to play the lead role in mainstreaming the sustainability agenda across G overnment. With support from across Whitehall, Defra as lead on SD , ha s developed a new set of measures . This build s on exi s ting tools and the good work done to date, by the SDC and others, but takes a new approach to achieve SD by embedding the principles throughout Government and making SD "business as usual" .

Committed and respected SDC Commissioners and staff, past and present, have made a significant contribution to the public and private sector’s understanding and delivery of SD . Whilst we are taking a different approach in order to mainstream SD it is essential to capture and build on the SDC s specific experience in stakeholder engagement and capability building. This is why these functions will be transferred into Defra. We extend our gratitude and thanks to the SDC for its commitment to putting sustainability at the heart of G overnment policy since its creation in 2000 and for working with this Government over the last year to explore and identify new ways to move to a long-term, green and sustainable economy.

Our Vision for Sustainable Development

The coalition Government is committed to sustainable development. This means making the necessary decisions now to realise our vision of stimulating economic growth and tackling the deficit, maximising wellbeing and protecting our environment, without negatively impacting on the ability of future generations to do the same. These are difficult times and tough decisions need to be made. This Government believes in going beyond the short term with eyes fixed firmly on a long term horizon shift in relation to our economy, our society and the environment.

This refreshed vision and our commitments build on the principles that underpinned the UK’s 2005 sustainable development strategy, by recognising the needs of the economy, society and the natural environment, alongside the use of good governance and sound science.

Sustainable development recognises that the three ‘pillars’ of the economy, society and the environment are interconnected. The Government has initiated a series of growth reviews to put the UK on a path to strong, sustainable and balanced growth. Our long term economic growth relies on protecting and enhancing the environmental resources that underpin it, and paying due regard to social needs. As part of our commitment to enhance wellbeing, we will start measuring our progress as a country, not just by how our economy is growing, but by how our lives are improving; not just by our standard of living, but by our quality of life .

3. Sustainable Development in Government

Good progress has been made in the last 16 years since the first UK SD strategy was published. However, the time has come to move SD beyond being considered as a separate, ‘green’ issue which is a priority for only a few Government departments. We agree with the SDC as quoted in the EAC report that G overnment has had mixed success in embedding sustainable development into policy and decision making processes. This is partly due to weak governance arrangements’ . That is why t his Government is going to mainstream SD so that it is central to the way we make policy, run our buildings and purchase goods and services.

Support for mainstreaming SD is at the highest level in Government . The Deputy Prime Minster, Caroline Spelman and Chris Huhne announced on the 28 February 2011 , a new approach for mainstreaming SD which in broad terms consists of providing Ministerial leadership and oversight, leading by example, embedding SD into policy and through transparent and independent scrutiny. New measures to support this include:

Ministerial Leadership and Oversight:

- A refreshed vision and commitment to mainstreaming SD, as above.

- The Environment Secretary will sit on key domestic policy Cabinet committees, including the Economic Affairs Committee, to enforce the Government’s commitment to sustainability across policy making.

- A Ministerial Steering Group will oversee delivery of new Commitments for Greening Government’s Operations and Procurement.

Leading By Example

There will be a step change in leadership, efficiency, transparency and accountability that will underpin the reform of Government’s operations and procurement. In the first year of this Government we have committed to reduce carbon emissions from central Government by 10%, and to being more transparent on our performance; 19 departmental headquarters’ buildings and No.10 now have real time reporting of energy efficiency data making data available for all to see on their websites. The new Greening Government commitments that will replace the targets on Sustainable Operations on the Government’s Estate (SOGE) will take the scope and ambition of Government’s challenge further, including being transparent on the carbon impact of our supply chain, and making procurement of goods and services more sustainable whilst continuing to deliver value for money.

Our vision means that we must take action to significantly reduce the impact we have on our environment: reducing our emissions of greenhouse gases, reducing our waste, reducing our water usage and making our procurement more sustainable. To reduce our environmental impact by 2015, the Government will:

- Reduce greenhouse gas emissions from a 2009/10 baseline from the whole estate and business-related transport; [1]

- Reduce the amount of waste we generate by 25% from a 2009/10 baseline; [2]

- Reduce water consumption from a 2009/10 baseline, and report on office water use against best practice benchmarks; [3]

- Ensure government buys more sustainable and efficient products and engages with its suppliers to understand and reduce the impacts of its supply chain.

Government’s impact and ability to show leadership stretches beyond the headline commitments, for example through the way we promote and conserve biodiversity on our estate, and the standards we set for construction projects. Departments will be open and transparent on the steps they are taking to address these issues.

Embedding Sustainable Development in Government Policy

Departments published their business plans in November 2010 setting out their priorities and the actions that will help them deliver these. The plans demonstrate the importance given to long term SD by Government as a whole and set out a range of actions and commitments which will help deliver it. However, we want to go further and make sustainable policy-making business as usual, ensuring it is consistent across G overnment, reflecting economic, environmental and social impacts. As part of the new framework for embedding SD into policy making, Defra will work with the Cabinet Office and will take the lead responsibility for reviewing departmental business plans in relation to SD principles. The Minister for Government Policy will then hold departments to account through the quarterly business plan review process. Future b usiness plans will be shaped by our new commitment to ensure that economic, environmental and social impacts are taken into account as far as possible.

Transparency and Public Accountability

We will measure and report [4] our progress through a new set of indicators on SD , building on past experience on SD and wellbeing measures and linking with developing national and international initiatives, including plans announced in November 2010 to measure the nation’s wellbeing. We will introduce more frequent and up-to-date reporting of information and statistics online rather than producing annual reports on sustainability , and through Accounting for Sustainability, HMT will introduce connected sustainability reporting in 2011/12 – bringing together reporting on expenditure and carbon reduction, waste management and use of finite resources. We welcome the E AC’s renewed commitment to hold Government to account through scrutiny and appraisal of Government’s performance, policies and our new overall approach.

National and International Sustainable Development

We will continue to work closely with our neighbours in Scotland, Wales and Northern Ireland, sharing approaches and best practice in SD , and we will look to our European partners, the Commission and Member States to exchange experiences and agree joint approaches on issues which go beyond the UK’s borders.

Internationally, the recent negotiations in Cancun and Nagoya are prime examples of how the UK has led the way on this agenda working with key developing countries and through international organisations. We will continue to join up our objectives on mitigating climate change, with protecting biodiversity and reducing global poverty. This approach will play a role in the run up to the next Earth Summit in Rio in 2012 – where the UN will focus on two international themes: on the role of the green economy and poverty eradication in the context of SD , and institutional frameworks for SD .

4. Response to Recommendations

The Government has taken careful c onsideration of the EA C’s recommendations and conclusions . We agree with the essence of the report and recognise that the Government and EAC are clearly working towards the same objective. But have in some areas decided to take a different approach as we fe e l this will enhance our ability to fully mainstream SD in the way Government operates, procures and develops policy.

Government L eading by Example

Recommendation 1. The Government produced a sustainable development ‘Action Plan’ in November 2010, which set out how it would make its operations and procurement more sustainable. The Government must now set out a clear architecture for sustainable development, which describes how these goals will be implemented and monitored, and how responsibility for the necessary actions will be distributed between departments. (Paragraph 14)

Recommendation 10. The Government is reorganising the administration of the SOGE framework, and from 2011–12 a new system will replace the SOGE targets. This provides an opportunity, which the Government should grasp, to deliver the improvements in the coverage of the SOGE framework called for by the SDC, and to make the streamlining improvements sought by individual departments. (Paragraph 57)

We agree with the Committee’s recommendations 1 and 10 and have announced a mbitious new Greening Government commitments to replace the SOGE targets. The targets have been simplified and streamlined with a focus on greenhouse gases , waste, water and sustainable procurement. The new commitments allow departments greater flexibility in delivery, a step that recognises the hugely varied Government estate and operations covered by these requirements.

At the same time as streamlining the requirements, we are expanding and clarifying the scope of coverage of our commitments. T he new commitments w ill apply to all UK Government d epartments, their Executiv e Agencies and non-Ministerial d epartments in the UK. They do not apply to the estates and operations of the Devolved Administrations, their Executive Agencies and related bodies. To ensure that the reporting requirements are proportionate, these requirements will only apply to organisations with 250 full-time- equivalent (FTE) staff and floor space greater than 1000m2.

A phased implementation will be adopted to take account of the changes to the Non- Departmental Public Bodies (NDPB) estate driven by the review of Arms Length Bodies.

The Government is committed to being open and transparent with our performance against our sustainability commitments, so that the public and Parliament can hold us to account. All departments will need to submit plans for delivering the operational and procurement targets within the Greening Government C ommitments to the Cabinet Office , which will performance manage pan-government delivery and publish regular progress updates . We will also establish a Ministerial steering group to oversee delivery of these new commitments for Greening Government’s Operations and Procurement.

Working with others

Recommendation 2. We are unhappy with the way that the Government has consulted with the devolved administrations on the impacts to this shared body [the SDC]. We recognise that sustainable development is a devolved matter and that as a consequence the UK Government is entitled to develop and deliver policy independently. However, decisions which impinge on a shared strategy should not be undertaken lightly or unilaterally. (Paragraph 16)

We have noted the EAC’s view and were grateful for the opportunity to discuss this concern with you as part of the evidence for your report. As your report acknowledges, whilst the principles of sustainable development are shared across the UK, each Government is responsible for deciding its own approach to delivery, taking account of its own circumstances. We liaised with colleagues in the D evolved A dministrations prior to making an announcement on the future of the SDC in July 2010. Whilst the UK Government has decided to take a new approach, we will continue to work closely with our neighbours in Scotland, Wales and Northern Ireland, sharing approaches and best practice in sustainable development . We will also look to our European partner countries to exchange experience and agree joint approaches on issues which go beyond the UK’s borders.

Recommendation 3. The Government has not committed to continuing the SDC’s capacity building work, by for example embedding Defra staff in departments or undertaking further department-wide ‘sustainability assessments’. The SDC has promoted sustainable development effectively through this work and has developed experience in this area which is at risk of being lost. There is still much to be done in developing capability across all departments. The Government must ensure that the SDC’s experience is transferred into Government and that it continues to work with departments to develop the capability needed by all departments to improve their sustainability performance. (Paragraph 24)

We agree with recommendation 3 of the report, that developing capability is a key issue. At the time of the inquiry we were working with the SDC to agree the transfer of functions into Defra; and it has been confirmed that this will include stakeholder engagement and some of its capability building work. We agree with the EAC that it is important that the SDC’s experience in these areas is not lost and have now offered transfers to Defra, under the Cabinet Office Statement of Practice (COSOP) to four SDC staff. We look forward to working with these experienced colleagues to build on and improve the ways in which we work across Government.

We do not consider that embedding Defra staff into other departments is the most effective way of mainstreaming SD, and will instead be focussing our capability-building efforts on ensuring that existing tools, such as impact assessments, are applied consistently and effectively, and ensuring that SD is reflected in core policy training.

Embedding SD across Government

Recommendation 4. While Defra has the expertise to help departments become more sustainable, it is not the best place from which to drive improved sustainable development performance across Government. After many years with the policy lead in this area, a different approach now needs to be taken, to provide greater political leadership for the sustainable development agenda. A new minister for sustainable development, ideally in the Cabinet Office, would provide a more effective base for driving action in departments. (Paragraph 34)

We agree in principle that a new approach to embedding SD throughout G overnment is needed. The coalition G overnment is committed to mainstreaming SD to ensure that we have a sustainable approach in all policy decision making and behaviours. SD is the responsibility of all of G overnment ; we do not agree that a new Minister for SD is the appropriate method for this. Defra will continue to lead the effort to mainstream SD with s upport at the highest level in G overnment , including Oliver Letwin, the Economic Affairs Committee and the Home Affairs Committee .

On 28 February we announced the Government’s vision and commitment to SD and a new approach to mainstream SD across Government, through enhanced M inisterial oversight and greater transparency in the progress we are making against key indicators (through regular publication, online, of data) . This framework gives us the means to deliver our commitment to improve the sustainability of our decision-making and operations and procurement across Government. These new measures , as outlined in section 3 , compl e ment a wider suite of current activity including the use of impact assessments and revision to Green Book guidance.

The Role of the Cabinet Office

Recommendation 5. An enhanced Cabinet Office role on sustainable development would need access to specialists and expertise to advise it and other departments on how sustainability could be better embedded in their decision making. Existing sustainable development experience in Defra should be transferred into the Cabinet Office, allowing it to assess the sustainability of departments’ policy proposals, Business Plans and operational and procurement practices. (Paragraph 35)

We agree to some of recommendation 5. There should be increased scrutiny of business plans to assess the sustainability of departments’ policy proposals. Defra, enhanced by the transfer of capability from the SDC, will take the lead responsibility for reviewing departmental business plans in relation to SD principles and will provide expertise to No . 10 and Cabinet Office to support their regular b usiness p lan appraisals. The Minister for Government Policy will then hold departments to account through the quarterly business plan review process. Future b usiness plans will be shaped by our new commitment to SD proof business plans to ensure economic, environmental, social and impacts are taken into account as far as possible.

Cabinet Office will also fulfil the crucial role of performance managing pan-government delivery of t he Green Government Commitments. All departments will need to submit plans for delivering the operational and procurement targets to the Cabinet Office, which will collate and challenge data, provide central support and publish regular progress updates.

The Role of the Treasury

Recommendation 6. A Cabinet Office lead would also need a Treasury ready to play a more committed supporting role, to use the sustainable development levers at its disposal. Treasury buy-in to the sustainable development agenda is essential. It is in a position to exert real influence over other departments, including the possible use of sanctions against poor sustainability performers. (Paragraph 36)

We do not agree that the Cabinet office is best placed to deliver SD, however as part of recommendation 6, we accept that SD is the responsibility of all Government and support from HM Treasury essential.

The Treasury will support green growth and build a fairer more balanced economy. Specifically its business plan sets out commitments to increase the proportion of revenue accounted for by environmental taxes. For example a consultation is underway on plans to introduce a carbon price floor by 2013. And through Accounting for Sustainability, the Treasury will introduce connected sustainability reporting in 2011/12 – bringing together reporting on expenditure and carbon reduction, waste management and use of finite resources.

In addition, Government has made a number of announcements and policy decisions which will support delivery of the transition to a green economy – including the Green Deal, greater support for export of clean technologies and Defra’s review of waste policies. In the Spending Review the G overnment committed £1bn for the Green Investment Bank with a commitment for additional significant proceeds from asset sales to help unlock the finance necessary to help move to a green economy.

Recommendation 8. The Government must complete its work without delay to integrate the findings of the Government Economics Service review of the economics of sustainable development into impact assessments and the Treasury’s Green Book. The Government should provide a commitment that the Treasury’s ongoing review of the Green Book will fully reflect these ideas, and that once revised the Treasury will monitor compliance by departments. (Paragraph 48)

We agree with recommendation 8. Defra is in the process of developing Green Book supplementary guidance on accounting for the environment in policy appraisal, working with HM Treasury towards publication in spring 2011.  This will bring together recent work published over the last few years by Defra on valuing ecosystem services and the development of practical guidance and tools for environmental valuatio n in policy appraisal.  Impact a ssessment guidance relating to valuing environment impacts was published in February 2010 and can be found at: http://www.defra.gov.uk/corporate/policy/guidance/index.htm .

One of the recommendations of the Government Economic Service (GES) Review related to the development of a natural capital asset check.  Defra is commissioning some scoping work to develop our thinking with a view to taking forward more detailed work during 2011, building on the results of the National Ecosystem Assessment. Further actions in relation to natural capital and appraisal will be detailed in the Natural Environment White Paper to be published in spring 2011.

Ministerial Leadership

Recommendation 7. Top level political leadership must be brought to bear, and the Government should consider how it could add such new impetus to the sustainable development agenda. A new Cabinet Office minister for sustainable development and the Prime Minister could be in the driving seat, and to encapsulate that high level commitment a Cabinet Committee with terms of reference addressing sustainable development should be established to oversee departmental performance and encourage more sustainable decision making across Whitehall. This would include Ministers from all departments, the new minister for sustainable development and perhaps the Prime Minister. (Paragraph 42)

We agree with parts of recommendation 7 , notably that top level leadership is important and commitment for our new approach to embedding SD must be at the highest level in Government. However we do not agree that a new Mi nister and Cabinet committee for SD are the correct vehicles for this . R ather , we have taken a different approach to ensure high level scrutiny and oversight of all de partments pol icies and behaviours, through our refreshed vision and commitment to mainstreaming sustainability; the Environment Secretary’s role on key domestic policy Cabinet committees, including the Economic Affairs Committee, to enforce the Government’s commitment to sustainability across policy making; and through a Ministerial Steering Group that will oversee delivery of new Commitments for Greening Government’s Operations and Procurement.

Sustainable Social Development

Recommendation 9. The social aspects of sustainable development need to be taken into account. The Social Task Force needs to deliver tools for embedding this in policy appraisal, and the Treasury must support this work and give a commitment to apply it. (Paragraph 49)

We agree with recommendation 9. The need to account for the social aspects of policies when assessing SD has been recognised and this has led to wider cross Government work to ensure we identify and measure social impacts as systematically and consistently as possible. The UK’s Social Impacts Taskforce [5] , co-chaired by Defra and DWP, has developed a conceptual framework to guide our work on understanding the relationships between the social impacts of policies, their effects on the UK’s underlying produced, human, social and natural capital, and implications for wellbeing. This is an analytical framework designed to improve our understanding of the relationships between different measures of policy impacts; and to help us interpret the policy implications of the aggregate measures of wellbeing being developed by the UK’s National Statistician. It will help us to develop the best advice for Ministers at the point at which policy choices are made.

Setting out the framework will also help to resolve some of the debates about terminology which beset this field, so that we can focus on the substantive issue of understanding how best to use analysis of social impacts in developing advice for policymakers. The framework is intended to be consistent with, and to complement, our existing framework [6] for developing advice to Ministers on the broad social costs and benefits of alternative policy and investment options. We have adopted a ‘capitals approach’ to assess sustainability in terms of whether the stock of wealth-creating and quality of life assets we pass on to future generations is better or worse that than what is available to us today, which is an important analytical component of mainstreaming SD .

S ustainable D evelopment Indicators

Recommendation 11. Government must introduce a full set of indicators to measure sustainable development, including well-being, which can be used to develop policy. The Committee welcomes the Prime Minister’s initiative to explore how a measure for this might be generated. But this must be done in a way that fully takes account of sustainable development principles (‘happiness’ may not always reflect sustainable development), while providing a practically useful tool for policy evaluation and decision making. (Paragraph 62)

We agree with recommendation 11. We are working in line with the EAC’s recommendation to introduce a full set of indictors to measure SD, including wellbeing. The existing SD indicators, which are highly regarded internationally, have been successful in helping people to understand the concept of SD and to summarise progress in a wide and diverse range of economic, environmental and social priorities. The indicators include a number of measures of wellbeing, introduced in 2007 to meet commitments made in the 2005 strategy.

Having led such pioneering work the UK was one of the first countries to produce an official set of wellbeing measures (as part of the SD indicators), we are keen to ensure that Defra continues to influence work in this field nationally and internationally, with the aim of there being measures that strongly highlight the link between SD and wellbeing and that help steer policy. In consultation with the SDC we have already undertaken a review of the existing 68 indicators in light of the ‘Stiglizt Commission’ and drawn up a provisional short-list of indicators which have the potential to serve as a ‘headline’ and supporting set of indicators. We shall be working with other departments to develop these further, particularly in terms of enhancing their relevance to SD priorities and to steering policies. Defra will then report on the indicators to give an overview and assessment of progress.

However, it is unlikely that these alone will be sufficient to identify how policies should be changed and whether policies are truly being successful. We believe that beneath the ‘headline’ and supporting set of indicators, we will need to work with departments to identify other more detailed supporting statistical measures that would help to breakdown, evaluate and steer policy development. Defra would then collate these measures and periodically publish reviews on particular themes.

Defra officials will also be working closely with the Office for National Statistics on the Prime Minister’s initiative to develop a measure of wellbeing – in particular ensuring that this builds on Defra’s earlier work in this field and can feed into wider work on SD indicators.

Working with Others

Recommendation 12. Government must make greater effort to engage with NGO and academic expertise in sustainable development, and assist such groups in scrutinising its work in this field. It must also be prepared to involve these bodies at earlier stages of policy development work, to assist it in developing more innovative ways of addressing sustainability issues. (Paragraph 73)

We agree with recommendation 12 . The transfer of stakeholder engagement function from the SDC will ensure that we continue to work effectively with interested parties from a wide range of groups and individuals including but not limited to NGO and academic expertise in SD . Our "SD Scene" electronic newsletter, and our web presence, will underpin further efforts to engage and involve a wider group of stakeholders.

Since 2006, Defra has contributed the major share of funding to the Sustainable Development Research Network (SDRN), which brings together more than 500 private and public organisations and over 2,000 individuals with an interest in sustainability both nationally and internationally. The network aims to facilitate and strengthen the links between providers of research and policymakers across government, promote SD in the academic and research community and work with funding bodies to encourage relevant research. It provides cost effective access to academic and business expertise, shares knowledge and disseminates best practice. Due to the cross-cutting nature of SD, Defra will seek funding contributions from other Government departments for the network to continue to build upon what has been achieved so far.

Communicating the New Approach to S ustainable Development

Recommendation 13. A new Sustainable Development Strategy should be developed to revitalise Government engagement on this essential foundation for all policy-making. It could link sustainable development into other overarching policy themes, like localism and climate change. A new Strategy should set milestones for the development of important sustainable development programmes including putting sustainable development more firmly in the Green Book and developing well-being measures. It should make clear the remits and responsibilities of all departments as well as the leadership architecture for sustainable development, including the role of ‘central departments’ and any new cabinet committee. It should also set out how the possible use of sanctions by those central departments could be used to encourage better performance by departments. (Paragraph 78)

We do not agree that development of a new SD strategy is the right method for revitalising Government engagement on SD. The Government’s new SD vision and approach to fully embed SD throughout Government sets out our high level principles and strategy for the future. Our new approach has an emphasis on action , leadership f rom the top down and departments taking responsibility for their own performance in relation to SD. All of this is underpinned by our commitment to be open and transparent so that both public and parliament can scrutinise our progress. In particular we welcome the EAC’s commitment to scrutinise the Government’s sustainability performance, in particular on operations and procurement, and the appraisal of our policies and in our new overall approach.

18 March 2011

[1] Level of reduction to be confirmed in due course and will build on the existing 10% target which runs until May 2011.

[2] This commitment will be subject to review to ensure that it is sufficiently challenging in light of the structural changes (i.e. reduced staff numbers and building closures) that will follow from the Spending Review. This will include further analysis of the costs and the benefits. The Government will also announce its ambitions for diverting waste from landfill following the outcomes of the Waste Policy Review to ensure that the ambition for Government’s action on waste is consistent with that set for the household and business sectors.

[3] For non-office water use departments will set their own water reduction targets focussing firstly on areas which are subject to water stress.

[4] Defra Statisticians will take the lead on this and will report annually on a high level set of indicators to provide an overview, linking with other initiatives, such as work on measures of wellbeing. The high level set will be supplemented by periodic (policy-specific) indicator reports, which will be developed by Defra Statisticians in consultation with statisticians in the relevant policy Departments.

[5] The Social Impacts Taskforce is tasked with developing better assessments of the social impacts of policy in appraisal and evaluation. It is chaired by Amanda Rowlatt (Department for Work and Pensions) and Richard Price (Department for Environment, Food and Rural Affairs)

[6] HM Treasury: The Green Book: Appraisal and Evaluation in Central Government, Treasury Guidance. (London, 2003)