2004 SPENDING REVIEW

PN A11

12 July 2004

DEFRA PROGRESS TOWARDS A SUSTAINABLE FUTURE

As part of the Government’s commitment to Sustainable Development, today’s settlement delivers increased resources for the Department of Environment, Food and Rural Affairs (DEFRA).  This will allow Defra to continue to focus on  priority areas, including addressing climate change, tackling fuel poverty, improving waste management, encouraging energy efficiency, improving flood and coastal defences, reforming the Common Agricultural Policy, and improving service-delivery in rural areas.

DEFRA’s spending allocation will increase from £3,153 million in 2004-05 to 3,533 in 2007-08, equivalent to average annual real terms growth of 1.2%.  In addition, DEFRA has agreed to realise  £610 million efficiency gains by 2007-08, around half of which will be released for further investment on priority areas.

The Secretary of State for DEFRA, Margaret Beckett, said:

"This is a good settlement for the environment and for Defra which will allow us to significantly increase funding for our priorities, and help to deliver a sustainable future for everyone. It will make a real difference to our work on climate change, flood defence schemes, energy efficiency and sustainable waste management. The settlement will also give a major boost for Defra's fuel poverty programme. This will help us support all those on low incomes to stay warm at home - our target is for 2010."

DETAILS

• 
  An additional £95 million per year will be provided by 2007-08 compared to 2004-05 to improve the energy efficiency of homes, in support of the Government’s target to eliminate fuel poverty by 2010;
• 
  An extra £20 million per year is provided by 2007-08 for the new Waste Management Performance Reward Grant introduced in 2005 , to reward Local Authorities for sustainable waste management, and PFI credits for investment in new value for money recycling and waste disposal facilities will be £155 million higher in 2007-08 than in 2004-05 to further encourage a shift from landfill;
• 
  Additional support (rising to £146 million by 2007-08, funded from the recycling of landfill tax revenues) will be provided for programmes aimed at businesses to minimise waste, increase energy efficiency, develop further the market for recyclates and increase diversion of waste from landfill; 
• 
  Of this additional support, at least £40 million a year by 2007-08 will be recycled  to expand the Carbon Trust’s programmes supporting business in improving energy efficiency and up to £20 a year to co-fund the DTI’s Technology Strategy;
• 
  Further action will be taken to tackle climate change and make progress towards the domestic target of moving towards reducing carbon dioxide emissions by 20 per cent by 2010, with climate change to be one of the central themes of the UK’s EU and G8 Presidencies in 2005. The Department for Transport will share the joint climate change PSA target with Defra and the Department of Trade and Industry, recognising the transport sector’s contribution to greenhouse gas emissions;
• 
  Action will be taken to implement agreed reforms to the Common Agricultural Policy, driving forward further agricultural policy reform, and taking forward modernisation of rural delivery following the Haskins review; 
• 
  Flood and coastal defence remains a priority, following the extra £150 million allocated in the 2002 Spending Review, with Defra and the Environment Agency continuing to improve standards of protection focusing on areas most at risk; and
• 
  Good progress has been made on Sustainable Food and Farming following the £500million invested in the 2002 Spending Review. Spending Review 2004 will build on this progress, for example by the roll out of the entry-level environmental stewardship scheme across England in 2005.

DEFRA and its core agencies and sponsored bodies plan to realise efficiency savings of at least £610 million by 2007-08, through a range of measures:

• 
  a total reduction of 2,400 back office or central department civil service posts and the relocation of 390 posts out of London and the South-East, with further proposals for relocations due by March 2005;
• 
  a step-change in the way CAP schemes are administered, through the Rural Payments Agency change programme (saving more than £50m);
• 
  rationalisation of delivery functions following the Haskins Review, realising efficiency gains of £45 million through the Modernising Rural Delivery Plan (£15m) and the England Rural Development IT Programme (£30m);
• 
  an Environment Agency Efficiency Programme, saving £75m, in part by  streamlining back-office functions and a greater emphasis on the provision of online services;
• 
  streamlining of DEFRA’s policy-making and back office functions, delivering around £85m of efficiencies;
• 
  improving procurement practices, largely through IT system improvements for commercial contracting, saving around £35 million; and
• 
  working in partnership with Local Authorities to deliver around £300 million of efficiency gains on waste services, achieved in part through the roll-out of best practice from more efficient local authorities, and the standardisation of procurement operations. 

 1 Full resource budgeting basis, net of depreciation    

NOTES FOR EDITORS

1. The Government said in Budget 2003 that increases in landfill taxes from 2005/06 would be revenue neutral to local authorities and business as a whole.

2. The Waste Management Performance Reward Grant will from 2005/06 provide non-ring-fenced incentives for local government to deliver a step change in sustainable waste management performance.

3. For further details of the 2003 Haskins Review of Rural Delivery, please visit the  DEFRA website .

4. Reforms agreed to the EU Common Agricultural Policy (CAP) in June 2003 and April 2004 largely or fully decouple the link between subsidies and production for many important sectors and make receipt of the Single Farm Payment dependent on meeting minimum environmental standards. The Government is continuing to press for further reform. 

5. Media enquiries to HM Treasury Press Office on 0207 270 5238.

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