CORRECTED TRANSCRIPT OF ORAL EVIDENCE
To be published as HC 327-i

HOUSE OF COMMONS

ORAL EVIDENCE

TAKEN BEFORE THE

Environmental Audit Committee

Embedding Sustainable Development: An update

Wednesday 11 July 2012

rT hon Caroline Spelman MP, rT hon Oliver Letwin MP

and Nigel Atkinson

Evidence heard in Public Questions 1 - 40

USE OF THE TRANSCRIPT

1.

This is a corrected transcript of evidence taken in public and reported to the House. The transcript has been placed on the internet on the authority of the Committee, and copies have been made available by the Vote Office for the use of Members and others.

2.

The transcript is an approved formal record of these proceedings. It will be printed in due course.

Oral Evidence

Taken before the Environmental Audit Committee

on Wednesday 11 July 2012

Members present:

Joan Walley (Chair)

Peter Aldous

Martin Caton

Caroline Lucas

Caroline Nokes

Mr Mark Spencer

Dr Alan Whitehead

Simon Wright

________________

Examination of Witnesses

Witnesses: Rt Hon Caroline Spelman MP, Secretary of State for Environment, Food and Rural Affairs, Rt Hon Oliver Letwin MP, Minister of State, Cabinet Office, and Nigel Atkinson, Head of Sustainable Development, Department for Environment, Food and Rural Affairs, gave evidence.

Q1 Chair: I wish to begin our session this afternoon by perhaps bringing a little transparency to the situation. I think that everybody is aware that there are many conflicting events going on in the Palace, not least a Government statement, and it is with great regret that I say to you that we are very low in numbers. Having said that, we did try to accommodate your availability and sit outside our normal committee time, so I do hope, Secretary of State and your Cabinet colleague, that you will understand that we are very low in numbers. I hope that we will maintain a quorum. I think it is probably going to be perfectly in order but if by any chance we do lose our quorum we might perhaps continue in an informal way on the most important items.

Caroline Spelman: Thank you very much for explaining that. Just from my point of view, you will be aware that there is a very big lobby of Parliament by dairy farmers.

Chair: There is indeed, and it is actually occupying the members of our Committee too.

Caroline Spelman: Dairy farmers in my constituency have asked if they could meet with me at 2.30pm, which is when I was told we would probably reach a conclusion, so if I could just put that on the table as well. Of course I understand that my first requirement is to be before you, but if we could accommodate everybody’s needs this afternoon, that would be good.

Q2 Chair: As long as we all understand the conflicting demands on our time, we will get through the session as efficiently and as much to the point as we can. Welcome to you both.

Caroline Spelman: May I introduce Nigel Atkinson who is our Head of Sustainable Development. I thought it might be useful if he was with us today because he has done an enormous amount of the background work.

Q3 Chair: We want to cut right through to what is important and as a Committee we want to know what progress has been made in the last 12 months since the vision for embedding sustainable development in Government was set out. Is sustainable development now fully embedded, and how are you working together on it? It would also be really helpful to know how some of the outcomes of Rio+20 are going to be embedded in a cross-cutting way.

Caroline Spelman: Absolutely. I wonder if I might encourage my colleague to speak first, and then I will follow him.

Oliver Letwin: Yes. Caroline undoubtedly will want to talk to Rio, of which she is the guru. There are two parts to the answer that I want to give. One part is to talk about the business plans and the embedding of sustainable development in them, and I would be delighted to do that in just a minute. I do not know whether you think that this would be helpful to the Committee but the other part is the answer relates to keeping our own house in order, the Greening Government Commitments. If you wanted to talk about that now, I would be delighted to do that as well, or would you like me to focus on the business plans first?

Q4 Chair: We are interested in the follow up to SOGE and all that the Government is saying, but I think we are more interested-and colleagues will correct me if I am wrong-in the more strategic aspects and looking at, for example, the business plans and the strategic decision making, the issues about the Green Book and the Treasury. Perhaps we could get down to the nitty-gritty and indicators of success. What are you using in respect of indicators of success? How will we know that the approach that the Government is now taking will work?

Oliver Letwin: In that case I will not talk about the Greening Government Commitments, but obviously I’d be delighted to do so at a later stage. Indeed, if you wanted, and subject to certain conditions, I think we could give you some working papers right here and now.

As you know, the business plans are a rolling annual process and, exactly as we foreshadowed when we last appeared before you, we have taken steps to try to make sure that that process embeds sustainable development through it. The first thing that we have done, therefore, is to ask each department explicitly to adopt an objective of sustainable development and, more particularly, to write into its own business plan the requirement that it should have a cultural shift, where needed, which would involve that department analysing how what it was doing, whatever it might be, would impact on sustainable development. The second thing is for the department to live up to its Greening Government Commitments, and the third is to focus a significant part, 25%, of its purchasing on small enterprises as part of its sustainability agenda.

Beyond that, specific departments have made a series of specific commitments that are related to sustainable development and if you would like me to do so, I would be delighted to talk you through some of the examples of that, some of which are really quite impressive. Clearly this is work in progress and will continue to be work in progress, and as we go through this coming year and I meet particular colleagues in their departments, I will be asking them about how far they are living up to the general cultural shift and also how far they are living up to the specific commitment. That is a very important part of the changes we are seeking to achieve.

Q5 Chair: But do you have indicators as such?

Oliver Letwin: There is a series of individual business plans of specific indicators that relate to that specific department, many of which in some cases, and in other cases some of which, are specifically related to sustainable development. So, for example, in DECC or in Defra a great part of their overall indicators-we can go through them if you like-relate to sustainable development; in other departments, obviously, most of the indicators do not relate to it. But the idea, the overall architecture, is that in order to achieve the overall sustainable development indicators, which Caroline might want to say something about, for Government as a whole being good, as the main thrust, each department needs to contribute to the achievement of things that lie within that particular department. For example, Defra and DECC have huge commitments here but they are unable to fulfil them unless other departments work with them in an appropriate way. The architecture is such that we attach the indicator, shall we say to Defra or to DECC as it might be in most cases, but by giving all departments this new duty and objective and by interrogating them on how they are doing it, we enable them to help Defra and DECC to deliver on their indicators. If you want to measure whether the Government as a whole is succeeding, you need to look at the overall Government performance on the sustainable development indicators, and look at Defra and DECC in particular, but if you want to know whether departments are culturally helping that to happen then you need to look at their business plans and their actions.

Caroline Spelman: You asked me specifically how this work in progress fits together with the outcome of the Rio+20 summit and we pick up our conversation with the Committee where we left off. I volunteered to come and give evidence to you before the Rio+20 summit and now we are here after that summit. While it was disappointing in the level of ambition, nonetheless there were some very important developments that do have a bearing on the approach that the Government is taking to mainstream sustainable development. For the first time in an agreement, we got clear acknowledgement of the concept of the green economy. I am very pleased to say the UK worked very hard behind the scenes to link that to important objectives such as poverty eradication, which help with the passage and acceptance of that concept among both developed and developing countries.

But probably the biggest outcome from Rio, and I know you were there, Chairman, was the acceptance in principle of sustainable development goals. These would be universal, they would be applicable to every country and every Government and would have to be worked through in terms of the kind of approaches that we in the UK are taking. There are only 12 months during which a working group of 30 countries has to come up with the goals, precisely defined, with a proper evidence base, which then feeds into the post-2015 framework. In three years’ time, by 2015, we will have sustainable development goals as crisply and concisely articulated as the millennium development goals are, and which have successfully driven action to help the poorest countries, but these are goals that will affect all countries. Dovetailing that with what we do here, I would be quite keen, if I may, to draw the Committee’s attention to how this works with our Greening Government Commitments, because this is how, in anticipation of those sustainable development goals, we have set some very clear indicators for pan-Government and then by department to help drive the necessary action in every department on water, waste and greenhouse gas emissions. Waste recycling is also part of it.

In the interests of transparency, which is the kind of relationship we want to have with Select Committees, and which I always envisaged when talking about how the Environmental Audit Committee would hold us to account for progress in sustainable development, I would very much like to share the state of the work in progress with the Committee today. We have come prepared to show you how our Greening Government Commitments are coming on, to show you how that links to what we have just agreed to in Rio. Would you be willing for us to circulate this information?

Q6 Chair: Very much so, because I think that one of the targets that we have as the Committee is to understand how, post Rio+20, every aspect of the targets that we have to move towards sustainable development goals is going to be taken forward. I am sure it is going to be in order for us to examine that with you.

Following on from that, when looking through the business plans of the individual Government departments, it is not instantly clear how the aspirations of Defra and the Cabinet Office are reflected in them. I would be very interested to know how the work you anticipate will specifically-and I mean specifically-be linked to not just what goes on in the Government estates in different departments but to the actual procurement policies, investment policies, the comprehensive spending review and the Green Book of the Treasury. I am interested in all of these different aspects.

Oliver Letwin: We could go on for hours by dealing with everything, but let me go through two examples of departments that are a long way from Defra and DECC-MoD and FCO-and just take you through what we have in their business plans, and then come back to the Greening Government Commitments performance in a moment.

The MoD business plan, under the heading, "Define and deliver a long-term sustainable development strategy that supports the delivery of the department’s Greening Government Commitments"-that objective is pretty much uniform across departments-specifies 11 specific goals with dates. "1. Mainstream sustainable development principles within defence strategies, policies, decision-making processes, associated programmes, projects and activities. 2. Monitor delivery of a sustainable development programme." That is the Greening Government Commitments. "3. Cut greenhouse gas emissions from the Defence estate" and so on, that is there; "Progressively reduce the non-office water consumption", the same; "To progressively reduce the amount of waste and to have met the Government’s 2015 target for diverting waste from landfill". So that is to do with greening Government, but then beyond that, exactly to your point, "To agree targets for reducing our key suppliers’ greenhouse gas emissions", so driving it down into the supply chain; "To agree targets reducing our key suppliers’ water consumption and waste", again the supply chain; "Comply with Government buying standards in departmental and centralised procurement contracts", again the supply chain; and then, "Include a report on progress in mainstreaming sustainable development throughout the department’s operations, procurement and policy in the department’s annual report" in order to try to give this a public airing; and finally, "Achieve sustainable development objectives and targets".

In parallel with that, the FCO has adopted the following goals: "Ensure the FCO work to promote at the international level sustainable development and poverty reduction, underpinned by human rights, democracy, good governance and protection of the environment". Then the standard phrase that appears now in every business plan, I think, certainly in almost all, "The FCO will assess and manage environmental, social and economic impacts and opportunities in its policy development and decision making, implement the department’s plan to deliver on the Greening Government Commitments, procure from small business the aspiration of 25% of contracts". Then it goes on, "The FCO recognises the interconnections between society, the environment and the economy and supports Government aims to find solutions that deliver benefits for all of these while minimising negative impacts. Our long-term economic growth relies on protecting and enhancing the environmental resources that underpin it. The Coalition Government’s refreshed vision and commitments for sustainable development build on the principles that underpin the UK’s 2005 sustainable development strategy. The goal of living within environmental limits and a just society will be achieved by means of sustainable economy, good governance, and sound science." Then it goes on further to say, "The FCO will ensure that sustainable development informs our policymaking and broader corporate agenda. Key areas of foreign policy with strong, sustainable development dimensions as signposted in the SRP", the rest of the plan, "by sustainable development principle-"

Chair: Sorry, but I must cut you short.

Oliver Letwin: Yes. I am trying to give you a sense that embedded in these plans now, to a greater or lesser degree in different departments but to a considerable degree even in departments that you might not have expected to do so, are a series of cultural shifts.

Q7 Chair: I think then the question is: how are you going to satisfy yourselves that those cultural shifts are actually happening and monitor what is being done and, perhaps more importantly, what is not being done? Given that we no longer have the Sustainable Development Commission to keep tabs on all of that, how is that going to be monitored and followed through?

Oliver Letwin: We have an internal process but before I go into that, may I say we hope that we are also providing you, and indeed others but specifically the Select Committee, with instruments enabling you to investigate? Here are public commitments by departments of State. It is not for me to tell you who to call before you, obviously, but if you wish to call the Defence Secretary or the Foreign Secretary before you and interrogate them a year from now on how they have implemented these commitments, they will be there to do so.

Q8 Chair: If you read through the BIS business plan it talks about the role of the green champion in making sure that there are 50 members of staff or whoever who are then able to follow up. I understand that there is no longer anybody in that post and there is not any clarity about whether or not that green champion will be replaced. How do you keep tabs that what is intended is actually followed through?

Caroline Spelman: Perhaps giving Oliver a chance to look that up specifically, when we scroll back to how we were going to set about mainstreaming sustainable development, our original idea was that we would use the business plan, which is made public, to get a clear statement from every department in its business plan of how it would mainstream sustainable development within its own department to a time scale. They would be reviewed on a quarterly basis with the Minister for Government Policy, and we all come before him on a regular basis when, I assure you, he holds us to account for any slippage on our time scales. That is all made public, that is in the public domain and that is available to you.

In addition to that, I suggested that the Environmental Audit Select Committee might then hold respective Secretaries of State to account in the way you are doing with us now but, as Oliver has just said, you might wish to do that if you find that there is one department that in your view is falling behind the rest in terms of its commitments on sustainable development. In addition to all that, we have set up a Cabinet Sub-Committee, which has now met I think on two occasions already, where we review the Greening Government Commitments collectively. We met quite recently when we reviewed the data that we have given to you today and it is really heartening to me to see the commitment that every individual department is making to meet these commitments. So, for example, the paper target has been exceeded across Government with a 24% reduction. The Government as a whole is on track to meet its greenhouse gas emissions target with a total carbon reduction of 13% this year. Good progress is being made towards the waste target with a 9% reduction this year, and the Government has reduced its water consumption by 4% in the Greening Government Commitments that we have made.

What comes out when we meet together like that in the Cabinet Sub-Committee is a much deeper understanding right across the whole Committee of the challenges that individual departments face in meeting those specific targets. If you take Defra, for example, which has a huge number of laboratories and water usage, which is very difficult to reduce in terms of the laboratory work, then I am able to explain in the context to my Cabinet colleagues why perhaps that target is one of the most challenging for us to meet. The challenge for the Ministry of Defence, for example, in trying to meet the greenhouse gas emissions target, given their fleet of vehicles, many of them deployed in the theatre of war, is how do they balance prosecuting that effectively while trying also to reach their Greening Government Commitments. So what the Cabinet Sub-Committee is doing is opening up an understanding between Government Ministers of the practical challenges associated with mainstreaming sustainable development. It is not a tick-box exercise. You get down and discuss together how to mainstream this in each individual department given the characteristics of each of those departments.

It is still early days, but we are making significant progress, more progress I feel, just to round off, than was made when sustainable development was the preserve of a body outwith Government trying to beseech it to do these things. I feel that by embedding it and mainstreaming it we are really beginning to see some progress.

Q9 Chair: We can understand the points that have been made in respect of the Government estate and how each individual department responsible for its own housekeeping is looking to make savings or to change the way it follows through its policies, but there are issues with the actual strategic work of Government. For example, in respect of the Treasury and environmental taxes, and in respect of the work that is going beyond GDP and the definitions that are required, there is a question mark against how the new way of operating is informing in an informed way.

Caroline Spelman: Informing policy: this is now a different way of looking at the way sustainable development is being mainstreamed. I have just been describing how it is mainstreamed to the actual workings of Government, but this question is about how sustainable development is being mainstreamed into the actual policymaking. Let’s look at the policies where it has been mainstreamed. I mentioned Rio+20, but in advance of Rio+20 there are a significant number of policies that reflect our determination to see sustainable development at the heart of Government policy.

Take, for example, the reform of the planning system where sustainable development is now the key criterion on which planning decisions succeed or fail. That is transformational in terms of reforming the National Policy Planning Framework, and that has been enacted. Take, for example, the Green Investment Bank, there is an example of the Treasury, which you have referred to, committing £3 billion of our resources, which are under severe fiscal constraint, to enable projects that will be investment in the green infrastructure that might not secure that funding in other ways. Take, for example, our Water White Paper, which was published at the end of last year, which put at its heart the sustainability of the water industry over the next 20 years. There are a lot of different focuses we could have had for that Water White Paper but we made the decision to put sustainability at the heart. Our own department also has put into its Natural Environment White Paper the commitment of the Government to establish a natural capital committee to make sure that when we try to understand better the concept of GDP, we enhance our understanding with an understanding of the natural capital as well as the social and economic capital, three pillars of sustainable development. I could go on and on, but I genuinely believe that the concept of sustainable development has found its way absolutely into the heart of policymaking, not just in my own department.

Q10 Dr Whitehead: I wanted to try to delve a little into how business plans work, how they are refreshed and how the question of sustainable development comes into that process, particularly the refreshment process, and what may or may not come out of that in terms of particularly embedding sustainable development into policymaking. There is clearly a substantial distinction between a greening Government, which is, you might say, an administrative process of reaching particular targets within departmental practice, and the business plans of departments, particularly as they relate to policymaking where you have wider considerations about the sustainable development content of not only that business plan but how policies relate to that business plan as far as the Government is concerned. Could you take me through that process briefly?

Oliver Letwin: Yes. Obviously all of this is in the context of a whole series of other things that are pan-Government, so the way that the Treasury organises the Green Book and how it forces each department when it is engaging in project analysis to consider sustainability and not just straight fiscal issues and straight economic issues. It is in the context of the incentives that things like green taxes and ecosystem services and so on deliver, and it is in the context of developing the work of the ONS on a wellbeing index. Against all of that background and the things that Caroline was talking about, the next question is what happens when a department is addressing whatever it is that you would expect that department to be addressing-there are obviously many things in the course of a year-from the Secretary of State through other Ministers, and indeed from the Permanent Secretary through the whole official network. The question that we are all interested in is whether people are asking themselves in the right way at the right time, "Is what I am doing here, given the other objectives that I inevitably have, being done in a way that most contributes to sustainability or not?" That is the cultural shift we are trying to achieve. I am not going to pretend for a moment this is easy because if you are an official at level X and you are deeply embedded in trying to do something that the nation expects you to do, your superiors expect you to do, Parliament expects you to do and so on, there is a very considerable temptation to get on with doing that and not take a step back and say, "If I did it this way would it really be more difficult and would it contribute more to sustainability? Is there a balance I can shift?"

I don’t want to pretend that in the business plans we have some kind of magic lever that achieves that cultural shift. We are both grown-ups; we both know that this is a difficult cultural thing to achieve. But the idea of putting the pressure that business plans and business plan reviews and business plan refreshments have put and are putting on Permanent Secretaries and Secretaries of State is that we hope that in each department, by increasing the adopting objectives that the Permanent Secretary and Secretary of State have had to sign on to and by knowing that each quarter they have to come and explain themselves, this will lead them to ask the sorts of questions that we want them to be asking, that both you and I would want them to be asking, of officials, and that senior officials will then ask those questions of junior officials and gradually what might otherwise have been ignored is taken more account of.

The myriad ways in which that would play itself out across a huge range of Government activity are unknowable in advance. But, like any really important cultural shift, if we keep going at it-and I think this is something, incidentally, that is very much a sort of tripartisan agenda, so my sense is that now we have this process rolling probably for the next 10, 20, 30, 40, 50 years-we are going to have Governments of succeeding colours that continue in this spirit and somewhere along that line I think this will become completely the norm right the way through. That is the ambition, so that people just quite naturally get up in the morning if they are thinking of doing X and ask themselves, "Can I do it in a more sustainable way?"

Finally, what I should say is I think there is some reason to be hopeful of that because we did not encounter the kinds of resistance that you might have expected to encounter at the first stage of building this in. I am sorry I probably bored you silly reading the MoD thing, but the reason I cited the MoD is you might have thought that our colleagues in the MoD, who as Caroline says are fighting wars and have very big budgetary problems that they are addressing and all sorts of other things, perhaps would have said to themselves, "Well, we are the MoD; why would we bother with this?" That is not their reaction. That does not mean that every captain and every major general and every under-secretary everywhere thinks about this all the time but it does mean that at the very highest level they have signed on to it. I will be asking them the question, "What have you done of these things?" You can ask them that question, and as more and more of us ask them these questions, I think it will spread as a culture.

Q11 Dr Whitehead: The difference between the Environmental Audit Committee and Cabinet Office is Cabinet Office helps to run Government and the Environmental Audit Committee does not. Are there processes in terms of this issue of refreshing business plans that are more than an advisory audit, that are a process whereby, as you have mentioned, you are saying, "You really ought to be doing this", or, "You ought to do that"? When you said, "You really ought to be doing this", or, "You really ought to be doing that", that presumably, in principle, results in trade-offs or discussions about how that business plan might produce a better outcome of sustainable development policies, or are you simply saying, "This is not very good, is it?"

Oliver Letwin: Let me step back. I was smiling slightly when you said that the Environmental Audit Committee, unlike Cabinet Office, did not have an effect. You may be surprised to know-I don’t doubt you are surprised to know-the Environmental Audit Committee has quite a significant effect on Government. I rather think it may have more effect on Government from time to time than bits of Government have on Government. Nevertheless, I hope that we can, from the Cabinet Office, have a significant impact of the kind I was describing. It is very crucially not our intention, and nor are we in any way empowered, to seek to micromanage each department’s activities. That would be an impertinence and a catastrophe. The whole business plan structure is not designed that way and has never been from the beginning. It is designed, on the contrary, to be a process in which the Secretary of State and the Permanent Secretary quite personally take ownership of a set of objectives, which are not our objectives but are theirs and they have become the Government’s objectives because they are the objectives of the Secretary of State and the Permanent Secretary of that department. Therefore, as Caroline would verify, being on the other side of some of these conversations, I don’t sit there and start asking impertinent and ridiculous questions about exactly how she is managing to achieve something.

The question that arises in the course of going through the business plans is, "You said", not, "I said": "You said you were going to achieve X by such and such a date. Have you?"-obviously I have some people who can help to research that question-and, "If you haven’t, why haven’t you and what are you going to do about it?" It is very much not micromanagement from the outside. It is very much trying to get the culture to respond inside departments and produce the results that the department has aimed to produce. Therefore, where we can embed the concept of thinking about things that have to do with sustainability as a mainstream activity of that department, what we hope is that it will not be a question of our saying to them, "Why aren’t you doing it?" but of their saying internally, "Let’s get on with this. Let’s achieve this. Let’s make sure that that question never gets asked".

Q12 Dr Whitehead: As you have described it, this is essentially a sort of a rubric against KPIs almost whereby you are saying, "You should do this, this, this, this and this", and, "You have not done this thing quite as well as you said you would do it so buck your ideas up or sort this out for when we come to the next refresh". Two questions: how does that then impact on policies that the department may be advancing that obviously will have an impact on whether those performance indicators are reached or not but could have a wider policy implication as far as sustainability is concerned and presumably should be, in theory, part of your process of testing and analysing whether the policy is sustainability facing or non-sustainability facing, and how does that approach impact on that process of policy formation; secondly, if a business plan simply has gaps in it are there people looking at the gaps as well as looking at the things that are in it and how are the gaps incorporated into the plan if those are identified?

Oliver Letwin: To answer the last part of your question first, this is a work in progress. We are trying, and will continue to try each year as we refresh the business plans, to get departments to install in their business plans for the coming year more reference to sustainability. That is the way the gaps that you are talking about begin to be filled, as well as, of course, checking on whether they are achieving the things they have already accepted as objectives.

To come back to the earlier part of your question, let me take the example again of the MoD for a moment, simply because, unlike DECC and Defra, it is not conventional, so to speak. One of the great activities of the MoD is to buy the weapons of war. Procurement is a huge activity-I do not need to tell the Committee this-of the MoD. I think it could genuinely be said of ministries of defence through the past 100, 150, 200 years, however long the Ministry of Defence and its predecessors, the Ministry of War, and so on, have been operating, that when they were engaged in what is now many tens of billions of pounds of procurement each year they did not ask themselves the question of, "How do we try to procure machinery that is not only more effective at fighting our enemies and defending our citizens but also less damaging to the environment?" I do not think that was on the agenda. It is pretty important that it should be.

Dr Whitehead: War is rather damaging to the environment.

Oliver Letwin: Indeed. There are all sorts of questions that arise that are very macroscopic, but there is also this very important non-macroscopic question that nevertheless is very important, which is, "As we are buying things that are there to defend our country and project our power, could we buy things that have less impact on the environment?" What the MoD is accepting is the principle that when it does this task that you might think had nothing to do with sustainability, it will instead think about it in terms partly, not wholly, of sustainability. That will enter its calculations.

I think quite near to Caroline’s constituency there happens to be a British manufacturer who has devised an extraordinarily intelligent way of reorganising the engines of machines bought by or potentially to be bought by the MoD for export that reduce the carbon output of machines of war. We need to generate circumstances and a culture in which that then becomes something that gets built into procurement contracts and so on. I think we are beginning to achieve that. That is the sort of thing we are trying to achieve.

Q13 Dr Whitehead: My particular interest, though, is in how that machinery relates itself to the policy process in terms of, for example, whether you would say, as a result of a refresh of the business plan, "Look, you are pursuing a couple of policies here that appear to be completely inimical to the idea of mainstreaming sustainability"?

Oliver Letwin: No. I can argue this head-on. It is not our ambition to stop doing things that the Government is committed to doing but rather to do them. The origin of the business plans does not come from nowhere. It comes out of the Programme for Government. The Programme for Government states our ambitions as a Government and our intentions, and the business plans are about fundamentally making that happen. The point of embedding sustainability in the policy process, and in the business plans therefore, apart from the Greening Government Commitments, is to make sure that we do what we are setting out to do in the most sustainable way we can. It is not to say we happen to have goal X but I have woken up one morning and have managed to have a conversation with the Prime Minister and Deputy Minister, and we decided to abandon goal X because we no longer think it is sustainable. We believe that the Programme for Government, balancing everything with everything else, is a programme, among other things, for increasing the sustainability of our country. Within that there are many things, some of which are more devoted to that task, some devoted to other tasks, that have to be carried out, but in all of them we want to see departments thinking, "How can I do this in the way that is the least damaging and the most beneficial to the environment, to society?"

Q14 Dr Whitehead: In a sense that is post-policy, isn’t it?

Oliver Letwin: Yes. Policy comes in many layers, so there are very high-level objectives, and then you gradually work out how to do them. No doubt the Committee will be very informed of views about HS2, for example, but it is a policy of Her Majesty’s Government to pursue HS2, as it was of the previous Government.

Chair: Isn’t that the whole crux of the matter?

Oliver Letwin: Let’s take that policy. There are two questions you might ask. You might ask the question, is this the right policy? The Committee, of course, is entirely able to ask that question and so are opposition parties, and so are commentators and journalists and so on. Of course, that is part of the democratic debate in the country. But the Government has a settled policy. We are pursuing HS2, as the previous Government did. However, that is a very general policy. There are lots of ways you could design HS2; you could design it in a way that was the least offensive to ecology, to biodiversity and so on, or pay no attention to such matters. What I am saying is that in trying to mainstream sustainability into the business plans, if a department is promoting HS2, we are trying to get them to ask themselves if they are consciously doing so in a way that has least adverse possible consequences and the greatest-

Q15 Dr Whitehead: I understand that, but doesn’t that lead us into a problem? For example, let us say the Government had a policy of covering the country with as many houses as it conceivably could on every single-

Caroline Spelman: But it has not.

Dr Whitehead: I know it doesn’t-I appreciate that this is a hypothetical. In that case, because the process of business plan refreshment in the way that you have described is post-policy, the logical outcome would be to say, "While you’re covering every single blade of grass with housing would you please make sure that they-"

Oliver Letwin: No, it would not.

Dr Whitehead: It would not be sustained.

Oliver Letwin: I must hand over to Caroline, but let me use that example, because Caroline raised it a little earlier, and it is very apposite. I think these examples begin to tease out what is the core of the matter. The Government has a high-level policy to make the planning system significantly simpler and to increase the extent to which we did something, which incidentally in terms of sustainable development too is very important, namely to house our population properly. But there are many ways in which you could go about the business of simplifying our planning system and housing our population properly. Although this was before we had managed to get this into the business plans, arising from the discussions that both Caroline from Defra and I from the Cabinet Office and others had with DCLG, we insisted from the beginning that we tried to pursue DCLG policy in a way that adopted the principle of sustainable development as the core of that policy. The description of something as pre or post policy is an insufficient description to capture the essence. To capture the essence, one has to recognise there are high-level objectives, but in order to translate those into what happens on the ground you have to proceed in various ways-

Q16 Dr Whitehead: I appreciate it is a descending title of policy detail. However, what I think is important is to identify the point at which the interrogation of the business plans sits within that high-level down to lower-level process, and it sits about in the middle.

Oliver Letwin: Yes. About the middle is a reasonable description in the sense that in building the essence of the policy, which probably comes just under the headline here, loosely, we are definitely doing it. We are definitely trying to mainstream it. If you are asking from where does the policy itself in its highest form come, it is the Programme for Government and pre-dates this.

Caroline Spelman: I think the reason why it has not been difficult to examine these business plans from the point of view of sustainable development is there is no argument in principle because the Government itself has agreed to mainstream sustainable development. That is a given at the very highest level.

When you refresh the business plans-being on the receiving end, I will talk to you about what the process is like-and you come back before Oliver on a quarterly basis it is not as though there will have been no intervention between the concept of an idea popping into the head of a Secretary of State and its appearance in the business plan. In no way is it like that. This undergoes a process of very careful scrutiny, both at the ministerial and official level, from the point of view of analysis and advice to be given to each department on sustainable development. It is working alongside the elaboration of a policy idea from the very outset.

Planning policy is a very good example of where there has been a decision at the highest level to give sustainable development pre-eminence before the policy was even fully drawn up because of the recognition of the fact that we have had a period of unsustainable development with lots of negative consequences and that needed to change. This refreshment of the plans gives a very good opportunity for interaction by my officials and by the Cabinet Office officials in providing assistance to other Government departments as they look through the things they have promised to do by a certain time. We cross-examine those from the point of view of considering whether they are going to help us with the mainstreaming of sustainable development. Guidance can then be provided for ways in which a policy can be ameliorated.

We have touched briefly on the vexed question of High Speed 2-and I declare an interest, it comes through my constituency-but if you look at the coherence, in the Greening Government Commitments there is a pan-Government determination to reduce the number of domestic flights. Indeed, we are succeeding in getting Government as a machine to reduce the number of flights taken internally within the country. You must buttress that by considering the sustainability of that policy and questioning how else people are going to move around. Increasingly they are going to take the train. So there is coherence in looking at these different policies. Having made the high-level decision to proceed with high-speed rail because capacity needs to be developed to meet the demand that comes from the move away from using more environmentally detrimental forms of travel, the question is then how you do it in a sustainable way. That is the next tier of advice and debate. That is not the responsibility of my department, but the Department of Transport, which will be assisted most ably by those in my department to help them with the elaboration of the next stage so that it is done as far as possible in the most sustainable way.

Q17 Dr Whitehead: Just a couple of brief follow-on thoughts. When we last spoke to you we were talking about the results of the business plan review process, including any trade-offs, although the question of trade-offs is possibly an academic point. But the refinements of the business plan process might be available to allow transparent scrutiny of that process itself at work. Is that your intention now or is that not on the agenda?

Oliver Letwin: All that we can publish is what there is and all there is are the business plans. There is not some sort of apparatus underneath it, or if there is, I do not know about it. Precisely because we are trying to run a rather leaner bureaucracy, we have not specialised in having vast amounts of paper. We are trying to keep it to the word.

Q18 Dr Whitehead: But, for example, departments are required to report sustainability performance in annual reports and accounts for 2011-2012. How does that tuck into the refreshing of the business plan process and-

Oliver Letwin: That requirement is in the business plans. The two tie together in the sense that the reports and accounts have to reflect.

Q19 Dr Whitehead: Is that the publication of the progress or the process, or are there other elements?

Oliver Letwin: I am sorry. I apologise, I may have misunderstood you. You can go to the web and get a precise account-it is remarkable to me that it does not generate more interest-an unvarnished account of where departments have got to in relation to each of the target dates that are set here under each heading. 4.1.1 will be listed as March 2015 in this case and you will be able to see it but most of them are way in advance of March 2015, March 2011, March 2012 and so on, and you can go to the web and you can see where the department did or did not succeed. We list the ones that have not succeeded and give an explanation. This is very, very transparent.

Caroline Spelman: Just in terms of transparency, again today what we have shared with you are the standard commitments that every department has agreed to in these performance indicators. They are also going to be published and made transparent. You will be able to track how each of the Government departments is performing in relation to those standard areas that allow us to see a degree of comparison, albeit read through the challenges that each department faces. We are trying to do this as transparently as possible and I think we are tangibly making progress in this area. I think the business plan has been a very powerful instrument in terms of embedding sustainable development and enabling the Government to continually improve on the sustainable development dimension of policymaking and delivery.

Q20 Chair: Just before we move on, would it be fair to say that the way that the Government is approaching it is that once the actual individual policies have been agreed, it is then about the implementation and how sustainable that implementation of those policies is? The example that comes to mind is the at one time long-standing policy of the Department of Transport, which was basically to have an appraisal that said, "Okay, we’re going to have a new road and are we going to take route A, B or C?" but the appraisal never questioned whether or not the new road was the best use of the spending in the first place or whether or not there could be some alternative. Is it fair to say that the Government’s implementation of this is not about the choice of how policies are arrived at but simply the implementation of them?

Oliver Letwin: No, I don’t think that would be accurate. We are engaged here in a very deep discussion, because there is not a simple dividing line between policy and implementation, and I think we are all aware of this. It is very difficult to pin it down.

Let me use your example for a moment. For example, when departments are appraising a road, the Green Book now specifically requires them to ask themselves the question: is there an alternative? They have to assess that in ways that attend not just to the economics but to the sustainability-not that, incidentally, I think the economics and the sustainability ultimately diverge; I think they ultimately converge.

Let me give you a very powerful example of that. This is outside the business-plan processes. We are now deep into the design of things. I do not know whether you call this policy or implementation, but in the design of the electricity market reforms, which undoubtedly you will have interrogated DECC about or will be interrogating DECC about, we have very much focused on the question of how do we ensure that negative generation, energy efficiency, is as present as a means of providing capacity or reducing the need for increased generation as the possibility of adding a generator? Before you come to the question of which kind of generator should this be and how do you make it one that has the least possible adverse consequences for carbon and for the environment more generally, you ask the question: do we need a generator in the first place or can we more cheaply and more efficiently have some energy efficiency? That drives you back towards not just the Green Deal but a whole series of other things to do with smart meters and smart grids. I need not lecture you about this.

I think there is an important point that we are not just talking here about full-steam ahead in a particular direction and just asking the question do you go one degree to the right or one degree to the left? We are asking at a much earlier stage than that, if we have a general objective-I do not know whether you call that a policy or not-to make sure that the lights are on, how do you achieve that in a way that is most sustainable? That may well include not generating but being more efficient.

Q21 Dr Whitehead: Forgive me; you are absolutely right, in my view. That is the exactly the question that should be asked of DECC right now, but then the Energy Bill comes out and there is nothing in it on demand-side management, would you then say, "We are very disappointed" or would you say-

Oliver Letwin: But on the contrary, the whole structure of what is DECC is doing is about demand-side management and the Green Deal is about demand-side management and the smart meters and smart grid are about demand-side management and the EMR has been designed to deal with and give a value to demand-side management. I think it is. This is the subject of a debate that you are probably better to have with the Secretary of State for DECC, although I would be happy to join in.

Q22 Chair: You are making the core point: we need to look at the assumptions that determine the specification that then results in a different policy and proposal. It is cross-cutting. It is not a question of having that discussion with DECC; it is having it with your good selves.

Oliver Letwin: I am happy to engage in it. You will be interested to know from my personal experience, because I have a lot of conversation with Ed Davey and his team about EMR as you might expect-incidentally so does the Treasury, as you might expect-that the Treasury for its reasons, I for my reasons and Ed for his reasons all share the view that we need to design the EMR in such a way that it gives a proper value to energy efficiency. Very often we will find that buying negative demand is the cheapest way of solving a problem, cheapest economically and also best sustainably. All I can tell you is that from my personal experience we are very, very keen on achieving just that.

Caroline Spelman: That happens systematically, in my experience, for each of us as departments. The Thames Tunnel is another example of where, with the Minister for Government Policy, we had a thorough cross-examination of the sustainability of that whole project, I mean with rigour, even having proceeded to the stage where it is accepted we are going ahead. We then examine the whole financial framework against another great cross-examination of whether it is the most sustainable way to finance the project. This does happen all the time.

Chair: We might return to this at some later stage, but I know that Martin Caton is going to move to the detail of the Treasury and the Green Book.

Q23 Martin Caton: I would like to look first at impact assessments, and perhaps I could start by asking where the Government has got to on better reflecting sustainable development and environmental protection in the impact assessment process?

Caroline Spelman: I suggest that Nigel starts off on this one while I find the right place.

Nigel Atkinson: There have been several improvements in Green Book guidance and impact-assessment methodology. There are three in particular that I would like to draw attention to.

Chair: Could you just speak up a bit? I am having difficulty hearing.

Nigel Atkinson: I am sorry, I will speak up. First of all, we have revised the methodology for undertaking impact assessments to more fully integrate approaches for dealing with sustainable development within that methodology. That was done last summer. The results are published. They are on the BIS website. We intend, later this year, to undertake what we are calling a baseline evaluation of the extent to which impact assessments are indeed picking up this guidance and using it appropriately and whether there is any scope or need to improve that. The other thing that has been done specifically in relation to the Green Book is that Defra, working with Treasury, have updated and produced new supplementary guidance on valuing environmental impacts. Those things mark a major strengthening of our approach to producing the evidence that supports decisions. I think that point is worth making, that some of this is about support to departments at the bottom level, if you like, for those who are creating or assessing the detailed policies that support the sort of commitments that the Minister was talking about earlier. That support covers not only impact assessments and guidance in relation to them but I think also develops the capability of civil servants to use these things better. At the moment there is a drive across the Civil Service to create a set of core competences for all civil servants that they will be assessed against and expected to have. We are expecting sustainable development, the requirement to understand and have expertise in sustainable development, to form a part of those core competences.

There is also an initiative across the Civil Service to create more coherence in the training and learning and development tools that are provided across Whitehall. Again, we are making efforts to embed sustainable development and the need for appreciation of sustainable development into those. All of these things come together, so we have new methodologies but we are also supporting staff in trying to understand and appreciate how to use them.

Oliver Letwin: May I just add that a particular passion of mine is part of this-the question of monetisation of benefits that the NAO is also focused on. Do you want to talk about that now?

Q24 Martin Caton: I am going to come on to that in a minute. Can I go back to what Mr Atkinson was saying. You have said that there is a new methodology. Part of that new methodology has involved dropping from the impact assessment pro formas 10 criteria that had to be looked at. They included sustainable development and environmental impact. Is there any danger that what you will end up with is less comprehensive than if you still had those requirements in?

Nigel Atkinson: That is certainly not the intention and not the direction of travel, not the intention behind making the changes. The very fact that we have done this is to make sure that we more closely integrate considerations that should already have been included, that that can be done more coherently, more clearly.

Q25 Martin Caton: Can you explain the rationale for dropping those specific impact tests?

Nigel Atkinson: The rationale for mainstreaming sustainable development generally is not that we pigeonhole this thing into a particular place and only the people who deal with that particular thing have to think about it, nobody else has to bother, but that everybody needs to think about sustainable development in everything they do. I suspect that is what is happening in relation to the impact assessments as well, that people need to think about the three pillars and assess impacts across that spectrum rather than focusing on one only or pigeonholing one only in one place.

Caroline Spelman: The force of the impact assessments is that if your impact assessment does not pass, your policy is not going to be cleared. Every Minister who wants a policy through the clearance process knows that it has to pass muster, including the test of whether or not this policy helps with our overarching objective of mainstreaming sustainable development. It is not an easy process. Sometimes a policy is held up for a considerable period of time as a really intensive discussion takes place about whether it does pass muster. I have to say I was not aware that there was any drop in terms of sustainable development and the criteria in the impact assessments. I assumed it was integral because we have agreed to mainstream it. Maybe Oliver, you would like to come in on your-

Oliver Letwin: No, we will continue. The Regulatory Policy Committee independently verifies whether the impact assessments have been correctly calculated and as part of that process the environmental impacts have to be assessed, so there is no question of relaxing them.

Q26 Martin Caton: Thank you. Perhaps we can come on to your passion for monetising all costs and benefits. Do you recognise that there are some things that cannot be monetised?

Oliver Letwin: Yes. I think this is a very important area, one in which we are at the foothills of a huge ascent. Of course there are things that we will never succeed in monetising. If we are going to achieve what the Green Book is setting out, to achieve what the impact assessment process is setting out, to achieve what I think we share as an agenda with the Committee to achieve, then as the NAO points out, and as the Natural Capital Committee, and indeed the task force that Caroline set up, pointed towards, we have to get much cleverer about taking a whole series of things whose values have not been monetised and building them in so that, if I can put it this way, even those who are just focusing on numbers will see these things as contributing. I think, for example, the Bishop of Liverpool’s recent report on forestry, which, as the Committee will be aware, focuses very heavily on getting the Natural Capital Committee to undertake a serious look at how you value the ecosystem services provided by forests, is absolutely on the nail. Otherwise, you have the terrible problem that there is an apparent contradiction between an economic or fiscal objective and an ecological or social objective.

The way to persuade people who are looking just at numbers-and the public in general looks at numbers, the media looks at numbers, treasuries look at numbers-is to say you should take account of these other effects, to the extent that we can, to put those other effects into the numbers on a basis that is rigorous and accepted by economists and so on and not just dreamt up for the occasion. I think that is something that has made progress over some years, it certainly has not just started under this Government, and is making further progress now. I hope that we and the Committee will together, and indeed together with the EFRA Committee as well, push this forward. What is very encouraging is that there is very much an awareness of that inside the Treasury too, as reflected in the Green Book. This is not just a specialism of those of us who happen to care about it. It is, I think, something that is now very widely understood in Government.

Caroline Spelman: We did publish a discussion paper at the end of last year to help departments with techniques for integrating non-monetary evidence into the valuation process. I know that is something of interest to the Committee because you recommended that the Social Impacts Task Force needs to deliver tools embedding sustainable development into policy appraisal. We are trying to assist across Whitehall with the exercise of capturing those non-monetised benefits so that decision making is improved by doing that.

Q27 Martin Caton: The means you use for dealing with those non-monetised things comes under the catchy title "Critical success factors or multi-criteria analysis and stats".

Caroline Spelman: Catchy title.

Martin Caton: Are you confident that staff in departments have the right training and, just as important, the right attitude to give full consideration to non-monetised social and environmental factors? Perhaps this comes back to what Mr Atkinson was saying about upskilling.

Caroline Spelman: It is very hard to know who should answer that question, because we don’t have line management responsibility for the staff. Does it not come back to the fact that what is happening here is progressively moving sustainable development from something that was dealt with outside of Government, which the Government itself in more or less respect had to respond to, to something where it is integral? Successive generations of civil servants, as they join the Civil Service, are going to be joining a body of staff whose political leaders, regardless of party I would think, over time see sustainable development as needing to be integral to what they do. That is what is happening. Of course it may take time but increasing numbers of people are going to understand the importance of this.

Just to relieve the Committee of this suggestion, there has not been resistance to this. We have arrived at a point, happily, in our society where people do understand that narrow measures of GDP result in decisions being made on too narrow a basis and that we need to broaden that understanding, and genuinely I think that is across party. That is the state we have arrived at. There is more progress to be made but I do not meet people in my department, or in other departments, resisting that change. Why wouldn’t you to want to make your decision on a better basis by factoring in the economic, social and the environmental? Of course you would. You are going to make a better decision.

Q28 Martin Caton: Thank you. Can I move on to the Green Book? Has the new Green Book supplementary guidance on environmental impacts been used by any departments yet?

Caroline Spelman: How would we know?

Oliver Letwin: I am afraid I am certainly not in a position to tell you. I do know that it will have to be used as people make project appraisals. I assume that people will have made project appraisals since its publication, so I assume that the answer to your question is yes, but the Committee perhaps could write to Permanent Secretaries to ask for details.

Nigel Atkinson: I think it is worth referring to the point I made in my first intervention: we are intending later in the year to conduct a baseline review of impact assessments and how well they have taken up the new methodologies that we have spoken about. So I think that is probably the place where we will start to form a view about how well these things have been picked up.

Q29 Martin Caton: Thank you. Minister, I think you started saying that departments would have to use the supplementary guidance, so it is mandatory?

Oliver Letwin: Her Majesty’s Treasury has a very high degree of influence on the activities of departments and if it publishes guidance-how do I put this-I think it would be a very brave decision, in "Yes Minister" terms, for the department in question to ignore it.

Q30 Martin Caton: Mr Atkinson, you have mentioned that you are going to be reviewing all this, but is there some process for an ongoing monitoring of the supplementary guidance?

Nigel Atkinson: I think the reason we are calling it a baseline review is that we want to see what gaps that reveals, what need for improvement, and on the basis of what we identify there, we will put in place some process to improve.

Q31 Martin Caton: Why doesn’t the Regulatory Policy Committee explicitly have a role of assessing environmental and social impacts?

Oliver Letwin: The structure of things is very important to understand and absolutely critical to the operation of all of this. The RPC is not a part of the governmental machine. Although of course it is paid for by the taxpayer and is sponsored by the Government, it is wholly independent. It has to be because otherwise the whole of the impact assessment process would be a joke. We need to make sure that there is some effectively external and wholly independent body that is there to verify whether the thing has been properly done. It is a corollary of that that its name is a gross misnomer. It is not a regulatory policy committee, it is an enforcement of the rules committee and its role is to make sure that when a department has prepared an impact assessment it has done so in accordance with best practice and the rules of the preparation of those things. It is not there to take a view about whether the policy is a good policy or a bad policy in any dimension, economic, social or environmental. It is just there to say to the Reducing Regulation Committee that this either is or is not a properly prepared impact assessment. It has the ability to make that a public pronouncement and, because it is wholly independent, we on the Reducing Regulation Committee and, much more importantly, the relevant Secretaries of State therefore have to pay attention to it. The process rule is you, the Secretary of State, can’t get clearance for the thing you are trying to do if, at the last stage, when the impact assessment is about to be implemented, the Regulatory Policy Committee, so-called, has not validated the impact assessment. That also means that the Reducing Regulation Committee has not approved it and will not approve it.

Q32 Martin Caton: That does not explain why environmental and social impacts are not considered by that Committee.

Oliver Letwin: It does not consider any impacts, environmental, social, or economic. It considers the question, "Has the impact assessment correctly calculated the things that it is required to calculate, including social impact and environmental impact?"

Q33 Martin Caton: So it is doing it?

Oliver Letwin: Certainly. There are experts here but, yes, certainly. It is looking at the question, "Are the calculations that are in the impact assessment correctly performed?" and that will include the calculation of whether the environmental impacts have been correctly performed. It is not asking the question, just so that it is absolutely clear, "Is this a good policy in environment terms, economic terms, fiscal terms, or any other terms?"

Q34 Martin Caton: I understand that. Your memorandum states that you intend to develop the environmental guidance further. In what areas are you looking to do this?

Caroline Spelman: Do you mean for sustainable development in particular? Sustainable development indicators are due to be published later this month, we hope on or around 24 July. That will be an important opportunity for us to seek stakeholder views and to inform publication of the final set, which is due to be in 2013. They will provide Ministers across Government and the public with high-level measures to determine whether the UK is developing on a sustainable path. I think also, back to the question of policy development, the SD indicators could help inform policy development. It is something that will be of real interest to the Environmental Audit Committee. As you continue to examine the way in which we are progressively mainstreaming sustainable development, the publication of those indicators and their implementation will be another tool for the Select Committee to use when, as we had always envisaged, you would interrogate different departments that in your view were not managing to make sufficient progress. We have transparent ways of seeing whether they are and new indicators to help us measure whether people are on course.

Q35 Peter Aldous: I do not think we have much time but I was just going to look at the Greening Government Commitments and also the sustainable development indicators. With the last SOGE targets produced and also I have noticed the draft Greening Government Commitments we have here-the SDC always used to produce some narrative to set in context the figures-the most recent SOGE indicators did not do that and on the draft here you have not done that. Do you intend to provide such a narrative?

Caroline Spelman: It is a draft and we have supplied it to the Committee today to give you a first taste, if you like, of the progress that is being made. I agree with you that it does need to be couched with some explanation. When the final set is out, you might well want to spend some time with us talking through our progress against these but a narrative is required. Before you came into the room, I explained a couple of the things about why it is challenging for Defra, which has so many laboratories, to meet those targets in relation to reduced water consumption. We are managing to meet it but it is a more challenging target for a department like ours that has to use that water. Waste, for example, is another big challenge for Defra because we have significant hazardous waste from our laboratories that can’t just be recycled. Hazardous waste has to be disposed of in a completely different way. Some narrative is required to accompany the reading of the performance indicators, and when we come to the final set I think it would be sensible for us to do that. We are quite happy to be asked for some of it today, if you wish to, but certainly we are happy to return to give the wider explanation when these figures become final.

Oliver Letwin: Can I just add, and is a very important point, it says draft, and it is a draft, but it is not just a draft; it is a work in progress. It is nothing like what the final document will look like. That certainly will have to include that kind of context, but also the figures are a work in progress. They are the best figures we are currently able to accumulate at the centre. We are working with departments to quality-assure them and we are giving this to you on the understanding that it is not for publication at this stage and for your information only. I am very grateful for that.

I do draw your attention to the fact that it is also highly specific and pretty unvarnished. Although we are proud of the record across Government, you will observe that there are departments in any given domain-four or five here-that are performing very well and some departments in any given domain that are not performing at all well. It may be that either or both of those are wrong in the sense that as we quality-assure these numbers we may find that the numbers move round a bit. In addition, I am sure we are going to find that there are departments that are performing much more strongly genuinely when the numbers are assured in some domains than in others. Our intention is to get those departments that are doing best-and our thought is at a meeting of Permanent Secretaries, a rather awesome occasion-to stand up and give an explanation, not just of the background but an explanation of what they have done that has meant that their department has managed to outperform many others in the room by a significant amount. Of course, it will be particularly those Permanent Secretaries who are sitting there in the room whose departments have not performed so well in that domain who will be, we hope, listening to that.

Q36 Peter Aldous: Are there any departments that are, let us just say, star pupils and are there any who should be going to the back of the queue and checking-

Oliver Letwin: The last thing I want to do is to have us on record being unpleasant about colleagues, but if you look at the figures they speak for themselves and what you will find is there is not an overall pattern. Different departments perform well in different things. That suggests that there is a lot of cross-fertilisation and learning to be done.

If you look briefly at water-let me be upfront about this, because we have been transparent about the work in progress, you will see it for yourselves so I am not telling you you can’t look at it-it is an interesting case. We adopted the ambition of reducing water use across Government. We could just have produced for you a figure, finally quality assured in due course, now in draft, of 4%, which happens to be, as far as we know, the truth. We have not done that. First of all, we have shown you what each department is producing, and you will see that they are very various. They span the vast terrain from 35% improvement to a couple of departments that have actually got worse. We had another promise that we made, which was to report against best practice benchmarks and that is on the final column on the right. What you will observe there, what we observe there, is that we are not anywhere near that. We are improving, but we are not yet anywhere near where we need to be.

Chair: I very much hope the Cabinet Office are leading by example.

Oliver Letwin: I was going to say that it is apparent to me, as someone who camps in the Cabinet Office, that the Cabinet Office itself-and I can say this because it is about ourselves-is not doing well on water.

Chair: I think that is a slight exaggeration.

Oliver Letwin: Exactly. I am pleased to be able to tell you, if you look at some of these others, that we are doing incredibly well on waste and on greenhouse-gas emissions and paper. We are not doing very well incidentally-I can say this too because it is the department in which I sit-on domestic flights, at least in the sense of data. We have not managed yet to get our travel agents to give us a disaggregations of domestic versus international flights.

Chair: No doubt they will after today’s hearing.

Oliver Letwin: What I am pointing out to you is we are being very unvarnished about this and we are being very unvarnished about it because this helps us. We are trying to make sure that we do live up to these commitments. The only way we can do that is by being pretty open about it, and we keep pushing on the basis of people being able to see what is going on. When you see the final reports, you will see the context. You will also see, however, the unvarnished figures.

Caroline Spelman: Just to add to that-because Oliver is quite rightly avoiding any suggestion of the Oliver Letwin end-of-term award for progress on sustainable development, because it is mid-term for this work-the immediate impact of having these standard measurements for water, waste and domestic flights and so on is that what happens among the Secretaries of State is they start asking each other, "How did you do that then? How did you get a 60% reduction in paper? What is it you are doing differently that we could be doing?" and you get the cross-fertilisation of best practice. I think that is one of the most practical demonstrations I can give you of the benefit of mainstreaming sustainable development and being transparent with you and with ourselves about the progress we are making. It is driving changes of behaviour, which is notoriously one of the most difficult things to achieve.

Q37 Peter Aldous: Are departments providing plans of how they are going to meet their targets?

Oliver Letwin: No. What has happened at the moment is that they are providing the information about what they have done. We do not want to ask them to enable us to micromanage their activities. It goes back to an earlier discussion. What we want to do is to get them to do it well, all of us. Rather than ask each department to spend time producing plans-we don’t care how they do it, we don’t care what their internal process is, we care what the result is-we do want to get those who are succeeding to show how they have done it so that other departments can learn from it.

Q38 Peter Aldous: A final point on the targets. This covers the period from April 2011 and it is going to be finalised in the autumn. That is an 18-month period and, as you yourself said, it is a work in progress document. Do you intend in future to have something more formal published, say quarterly or half-yearly?

Oliver Letwin: I don’t know, and we will certainly take that away if it is a suggestion of the Committee. This covers the period from April 2011 to April 2012, so at the moment it is very timely, and I think that some of this data is more complicated to collect than one might think. While I started by being very surprised that it took so long, now I have gone into how it gets collected, in many cases, I have discovered that it does take some time to quality-assure it. There is no point in our putting out public figures that are not right. I think we are better off doing it on an annual basis and making sure that it is right each time, although I think I can say, with Caroline, that we would be delighted each year to come back to you at an earlier stage, this sort of period of the year, and show you the work in progress so you have the chance to interrogate us about it before the public does.

Caroline Spelman: If we just consolidate on the annual reporting, because once again the SDI indicators will be published annually as well on Defra’s own website, so it makes sense, we are working up a system for you to be able to judge us quite transparently. We are showing you the work towards that today. What I think we need to do is to move to that annually so that everyone, the whole world can see, how the performance is progressing over time.

Chair: I am just very conscious, Minister, that you did say you needed to leave at 2.30pm.

Q39 Peter Aldous: Are there plans to extend this type of approach across the remainder of the public sector?

Oliver Letwin: We would very much like to do that. You are speaking to apostles of this and I am conscious that for our colleagues it is very difficult in some cases and many of them deal with very disaggregated systems. We will certainly be having discussions with colleagues about that.

Q40 Chair: Just finally, I am conscious that in the Government’s response to our Embedding Sustainable Development you did say in recommendation 10 that departments would be required to submit plans for delivering operational and procurement targets. That seems to be slightly in contradiction-

Oliver Letwin: I am sorry, perhaps it was bad phrasing. That was a reference to what we have done, which is that now in every business plan there is a commitment to produce the results that we are seeking here. In every business plan it now states that it is part of their plan to do this. We have not asked them, and we never intended to ask them, to produce the detailed plan by which they will do it, that is up to them. It is now a measure in the business plan by which they will be judged whether they are achieving the commitments in the Greening Government. I am sorry, perhaps it was the phrasing.

Chair: Maybe we should come back to that. I think our time is up. You have been very generous with your time and apologies again for the smaller attendance than usual because of other commitments in the House. Thank you both very much indeed for coming along.

Prepared 9th October 2012