It is widely anticipated that George Osborne’s Comprehensive Spending Review will be the most severe spending restraint since the 1930s, with projected departmental savings of 25-40% requested by the Treasury.
The CSR is due to be published 21 October and it will set spending limits for every government department to 2014-15.
But spending cuts are already happening; ‘in-year’ savings amounting to £6.2 billion were announced on May 24. Defra’s contribution to the 2010-11 savings, which include savings contributed by Environment Agency and other Defra family agencies, amounts to £162m (5.5% of its budget). As part of these Caroline Spelman announced the abolition of the Commission for Rural Communities.
The NFU’s priority is clear: investing in the long-term competitiveness of UK agriculture and its ability to produce more and impact less. We recognise that the scale of the spending cuts required mean that no area of government can be immune - and indeed, ring-fencing specific activities may only make cuts worse for other sectors or activities.
The choices Defra must now take cannot be characterised as ‘environment versus production’ – this is too simplistic. Alongside Defra’s priority of supporting and developing British farming and food production, the department must also enhance and protect the environment and promote a resilient rural economy.
Defra funding includes support for animal health and welfare, flood protection, climate change and countryside conservation. The NFU is arguing that Defra should first prioritise efficiency savings and reduce back office costs, rather that frontline delivery. Ministers should also identify ways in which these outcomes could be provided at lower cost or in different ways, perhaps in partnership with the industry.
Anxiety about Defra’s future funding is running high. Farming needs functional flood defences, accessible agri-environment schemes, timely and accurate administration of Single Payment Scheme and livestock movements. It is too soon to identify which Defra functions will be effected by the Comprehensive Spending Review, but severe cuts in Defra’s budget may mean that ‘efficiency savings’ will be insufficient to protect front line activity.
In this context the NFU will continue to argue that Defra Ministers must avoid cuts where it would damage the long term competitive prospects of British farming.
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