Treasury missed chance to coordinate environment policy in Spending Review – NAO

New report praises cross-government progress since 2010 but questions the value of Single Departmental Plans

By Jim Dunton

20 Jul 2016

HM Treasury failed to make the most of opportunities to coordinate cross-departmental efforts to achieve the government’s environmental goals in last year’s Spending Review, according to a new report from the National Audit Office.

The public spending watchdog said that while the November 2015 review contained some attempts to align funding to achieve environmental objectives, not enough was done to incentivise co-operation on issues such as carbon-reduction and biodiversity.

MPs on parliament's Environmental Audit Committee asked the NAO to investigate how joined up the review had been, saying it was important that spending decisions did not "saddle future taxpayers with higher costs as a result of avoidable damage to human health or the environment".

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The analysis, published under the direction of NAO chief economist Michael Kell, said there was clear progress in the 2015 Spending Review, compared with its 2010 counterpart, which contained no coordinated bids relating to the environment.

“In 2015, there was a coordinated bid relating to air quality and for projects intended to address issues relating to carbon reduction, such as the Office for Low Emission Vehicles and the International Climate Fund,” it said.

“HM Treasury could have done more to establish strong incentives for collaboration on environmental matters" – National Audit Office

“HM Treasury identified the departments with the most material impacts on carbon emissions, requested and received a ‘carbon return’ from each, and collated this information to assess the cumulative impact on carbon budgets.”

However the spending watchdog concluded that the Spending Review had still been“largely a bilateral process” between the Treasury and individual departments.

“HM Treasury could have done more to establish strong incentives for collaboration on environmental matters,” it said.

“For example, by signalling to departments that it would review carbon reduction proposals as a package, and by engaging more extensively with cross-government groups involved in planning for carbon budgets to do so. 

“While not as critical as for air quality and carbon, a cross-government view of the impact of the spending review on biodiversity might have brought to light useful information on the cumulative impact of bids on habitats and wildlife preservation, and might have prompted greater collaboration between departments on biodiversity issues.”

The report said the Treasury should have made more use of expertise in independent statutory advisory bodies on the environment to scrutinise bids and test the combined merits of its proposals.

The NAO also looked at the 2015 Spending Review’s decision to withdraw £1bn of capital funding earmarked to support Carbon Capture and Storage (CCS) projects. 

It concluded that neither the Treasury nor the Department of Energy and Climate Change had quantified the cost of delaying large-scale deployment of technology that the decision entailed, despite both agreeing that CCS was necessary in the long-term to meet decarbonisation targets.

"Vague" Single Departmental Plans

Elsewhere in the report, the NAO looked at the impact of the Single Departmental Plans, published in February this year, on cross-government environment objectives.

It said the plans, which were developed in tandem with preparations for the Spending Review, were “vague”, “lacking targets or time frame in most cases” and rarely made intended actions clear.

“Of the 53 clear environmental commitments made by the six departments that reference the environment, only eight had a clear time frame within which the commitment would be achieved,” it said. 

“Only 11 had a clear output and 13 had a clear input.”

Civil Service World asked HM Treasury for its response to the NAO report but had not received a response at the time of publication.​

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