House of Commons Environment, Food and Rural Affairs Committee Departmental Annual Report 2012–13: Government Response to the Committee's Ninth Report of Session 2013–14 Eighth Special Report of Session 2013–14 Ordered by the House of Commons to be printed 13 May 2014 HC 1283 Published on 14 May 2014 by authority of the House of Commons London: The Stationery Office Limited £5.00 Environment, Food and Rural Affairs Committee The Environment, Food and Rural Affairs Committee is appointed by the House of Commons to examine the expenditure, administration, and policy of the Department for Environment, Food and Rural Affairs and its associated bodies. Current membership Miss Anne McIntosh (Conservative, Thirsk and Malton) (Chair) Richard Drax (Conservative, South Dorset) Jim Fitzpatrick (Labour, Poplar and Limehouse) Mrs Mary Glindon (Labour, North Tyneside) Mrs Emma Lewell-Buck (Labour, South Shields) Iain McKenzie (Labour, Inverclyde) Sheryll Murray (Conservative, South East Cornwall) Neil Parish (Conservative, Tiverton and Honiton) Ms Margaret Ritchie (Social Democratic and Labour Party, South Down) Mr Mark Spencer (Conservative, Sherwood) Roger Williams (Liberal Democrat, Brecon and Radnorshire) The following members were also members of the committee during the inquiry. George Eustice (Conservative, Camborne and Redruth) Barry Gardiner (Labour, Brent North) Dan Rogerson (Liberal Democrat, North Cornwall) Powers The committee is one of the departmental select committees, the powers of which are set out in House of Commons Standing Orders, principally in SO No 152. These are available on the Internet via www.parliament.uk. Publications The Reports and evidence of the Committee are published by The Stationery Office by Order of the House. All publications of the Committee (including press notices) are on the Internet at www.parliament.uk/efracom. A list of Reports of the Committee in the present Parliament is at the back of this volume. Committee staff The current staff of the Committee are David Weir (Clerk), Anna Dickson (Second Clerk), Sara Priestley (Committee Specialist—Environment), Boaz Nathanson (Committee Specialist—Agriculture), Clare Genis (Senior Committee Assistant), Lisa Stead (Committee Assistant), Sayeda Begum (Committee Support Assistant) and Hannah Pearce (Media Officer). Contacts All correspondence should be addressed to the Clerk of the Environment, Food and Rural Affairs Committee, House of Commons, 14 Tothill Street, London SW1H 9NB. The telephone number for general enquiries is 020 7219 5774; the Committee’s email address is [email protected] Eighth Special Report of Session 2013–14 3 Eighth Special Report The Environment, Food and Rural Affairs Committee reported to the House on Departmental Annual Report 2012–13 in its Ninth Report of Session 2013–14, published on 7 January 2014 as HC 741. The Government’s initial response was received on 12 March. The Committee considered this on 26 March, formally rejected it, and wrote to the Secretary of State requesting a response which better addressed the points made by the Committee in its Report. This further response was received on 24 April 2014. Government response INTRODUCTION This report sets out Defra’s response to the Efra Select Committee’s Report on Defra’s Annual Report 2012–131. EXPENDITURE AND ADMINISTRATION In order to answer the Committee’s key recommendations (1, 2, 7 and 8) highlighted in the Summary of its report we have set out our responses to those together. Our response to the Committee’s recommendations (3, 4, 5 and 6) on the administration of the Common Agricultural Policy follow at the end of this section. Budget and Resourcing 1. Recommendation 1. The Secretary of State needs to be clearer about what substantial cuts in Defra’s budget will mean for policy delivery. We understand that how Defra spends its remaining budget will be determined in line with his four priorities, but they are in themselves no clear guide to where the axe will fall. Administrative and efficiency savings will not represent the entire saving. We invite the Secretary of State to set out in detail, in response to this Report, what programmes and policies will be reduced or ended to meet the required budget savings. (Paragraph 9) As outlined by the Secretary of State, Defra determines its funding allocations in line with four priorities, as follows: • Growing the rural economy: investment through the Rural Development Programme for England and through the Government’s Agri-Tech Strategy2; work to influence other Government Departments’ programmes, for example to ensure DCMS broadband programme reaches rural areas; additional funds allocated to help communities, businesses and farmers to recover from the severe winter weather and floods. 1 Environment, Food and Rural Affairs Committee, Ninth Report of Session 2013–14, Departmental Annual Report 2012–13, HC 741, published 7 January 2014. 2 Joint-funded by Defra, BIS and DFID. 4 Eighth Special Report of Session 2013–14 • Improving the environment: we had already protected the floods budget; an additional £130 million has been allocated for urgent repairs to flood defences; an increase in £5m for waste crime; and an increased share of the budget for agri-environment schemes in the next Rural Development programme. • Safeguarding animal health: Funding was re-allocated to minimise risks and increasing preparedness for animal disease outbreaks including investing in stronger bovine TB control measures to support the implementation of A Strategy for Achieving Officially Bovine Tuberculosis Free status for England which was published in April 2014. • Safeguarding plant health: we have invested £7 million in plant health to protect the UK from incursions of plant pests and diseases, mitigate and manage existing outbreaks of plant pests and pathogens. This has included building capacity in industry, the voluntary sector and the wider public to understand, respond to and build resilience to plant and tree disease and pests. The Committee asked where cuts have been made and how this has impacted policy. The Main Estimate Memorandum, which will be sent to the Committee on 28 April, gives detailed variances between the 2013/14 budget after the Supplementary Estimate and the 2014/15 budget. There were significant adjustments made in the Supplementary Estimate, primarily to deal with floods, which mask the level of savings made from one year to the next. Other changes made in the Supplementary Estimate reflect reallocation of budgets between resource and capital and internal movement of responsibilities between Directors. The table below shows the movement in Defra’s budget from 2013/14 main estimate to 2014/15 main estimate. 2013–14 Main 2013–14 Supplementary 2014–15 Main Estimate Estimate Estimate Resource DEL 2,122 2,000 1,992 Comparison of Defra’s Resource DEL Budget 2013–14 to 2014–15 Delivering the significant savings required by the SR10 settlement has been a challenging process. Defra has planned for and is delivering the savings required as part of the SR10 settlement through both the core Department and its wider network bodies over this period. Additional reductions (on top of SR10) to Defra’s budget of £19 million in 2014/15 and £18 million in 2015/16, have also been factored into budgets for those two years and are reflected in the table in the Annex. Delivering the savings required for both SR10 and 2015/16 has needed Defra to undertake strong financial management and tough decision making on the reallocation of funding in line with Ministerial priorities to protect floods and prioritise animal and plant health. We are confident that through the application of rigorous financial control, Defra will continue to manage within its budgets. Looking forward, significant savings will be delivered through: • Efficiencies and changes in operating models. These include, for example, changes in the way Shared Services for Defra, the Environment Agency and other network bodies are delivered by moving to a Joint Venture. A Joint Venture is a business agreement in which Defra and a private partner jointly agree to set up a new organisation to develop and run the business/project. Eighth Special Report of Session 2013–14 5 • Investments in the Strategic Improvement Programme for the RPA are delivering and will continue to improve performance, reduce costs and prepare for delivery of CAP reforms in the future. At Natural England savings will be delivered through restructuring and back office efficiencies. • Contract negotiation in areas such as waste PFI and the Marine Management Organisation Royal Navy Contract are producing sizeable savings. • Reprioritisation in RDPE programmes during the transition year as schemes wind down prior to the launch of a new programme in 2015 will also create savings. • National Parks have delivered and will continue to make savings but have received some protection compared to other parts of the sector to ensure that they can still deliver their priorities. • Better prioritisation of evidence investment will deliver substantial savings. • There will be also be savings from the Waste and Resources Action Programme as Defra reduces its activities in areas of waste management where businesses are better placed to act and there is no clear market failure. By taking this approach, Defra is ensuring it maintains essential capability and keeps the impact of the budget reductions to a minimum. The Table in the Annex details where the main Resource DEL savings will be achieved. 2. Recommendation 2. We understand that nearly all Government departments face budget cuts, but savings must not have an adverse impact on the Department’s ability to respond to emergencies. We invite the Department to set out its position in relation to reported reductions in staff at the Environment Agency, the future of Fera and reduced activity in the waste sector. (Paragraph 14) Ministers have prioritised flood defence spending and agreed to maintain the Environment Agency’s capital programme with a six year capital settlement of £370 million in 2015/16 and the same in real terms each year until 2020/21 (see also details on the impact of Partnership funding in our response to recommendation 15 below).