Sustainability and HM Treasury
The report summarises:
The Treasury is an influential government department with control over public spending, taxation policy, regulation and major projects. It is uniquely placed to take an overarching perspective and ensure departments and their policies across Government work to promote sustainability. There is considerable evidence, however, that the Treasury fails to do this.
We heard multiple examples of where the Treasury has ridden roughshod over other departments’ objectives, changing and cancelling long-established environmental policies and projects at short notice with little or no consultation with relevant businesses and industries. These decisions caused “shock” and “uproar” among sectors affected, with some businesses describing them as “devastating”. All these changes, taken together, have had a damaging effect on investor confidence.
We found that the technical and political frameworks the Treasury uses to support these choices consistently favour short-term priorities over long-term sustainability, and comparatively expensive, glamorous low carbon technologies (e.g. offshore wind, wave,tidal and nuclear) have received more attention than cheaper alternatives (e.g. onshore wind and energy efficiency) which might represent better value for money. In part, this is because the frameworks do not take adequate account of future environmental costs and benefits. As result, a number of Treasury’s decisions could lead to higher costs to the economy in the future. Cancellation of the Carbon Capture and Storage Commercialisation Competition was a case in point.
Ministers cannot make well-informed decisions unless they have access to all relevant information including long-term costs and benefits. The Treasury needs to do more to factor these into its decision-making processes, so that decisions are subject to a systematic “green-check”. It must set out concrete steps on how it will incorporate new evidence on natural capital into its ‘Green Book’ appraisal process and its reporting and accounting mechanisms.