More than one deficit

17th June 2013


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IEMA

Paul Suff argues that the government risks creating an unmanageable environmental deficit by continuing to slash Decc and Defra's budgets

Whether or not you believe austerity is the solution to the UK’s economic ills, there is little debate that reductions in public expenditure over the past three years have resulted in cherished and urgently needed projects being either axed or pared. Spending on the environment has not escaped the cuts. Decc and Defra have seen their budgets slashed since 2010, and now face more constraint, as the chancellor demands that another £11.5 billion is squeezed from public spending.

Decc, led by Liberal Democrat Ed Davey, has been one of the first departments to agree new budget levels with the Treasury, pledging to reduce its funding by up to 10% in 2015/16. It means the energy and climate change department faces cuts of about £400 million to its annual budget the next election after whichever party wins.

With a large chunk of its expenditure locked into nuclear waste management, Decc has little room for manoeuvre over where the axe falls. And, with the Treasury keen to exploit potential shale gas deposits in the UK, support for low-carbon technologies appears vulnerable and could explain Davey’s reluctance to support a new EU target for renewable energy.

His opposition to plans by the European Commission to raise the EU target for renewables from 20% by 2020 to 30% by 2030, while at the same time calling for Europe to commit to a 50% reduction in greenhouse-gas emissions is illogical: more renewables capacity is fundamental to the decarbonisation of electricity generation, which, in turn, is essential if the EU is to achieve Davey’s ambition to halve its greenhouse-gas emissions against 1990 levels over the next 10 years or so. As the committee on climate change points out, pursuing a gas-fired energy strategy is sensible only if the world abandons its efforts to tackle climate change.

Over at Smith Square, home of Defra, Owen Paterson, the Conservative secretary of state, has been less accommodating to demands from the chancellor to contribute more to deficit-reduction plans. As the environmentalist went to press, Paterson was resisting further big reductions to his department’s budget.

The environment department experienced some of the steepest cuts in the coalition’s first spending review, with its total budget, when inflation was factored in, cut by 30%, compared with an average of 19% across Whitehall. Capital spending was a major casualty, with expenditure on flood defences, for example, falling by 27% year on year, despite the UK’s flood risk rising significantly.

Earlier this year, Paterson gave the go-ahead for building to start on 93 new flood defences this year, boosting spending on flood risk management in 2013 to £294 million. Although that is still less than when the government came to power, the change of course at Defra came after floods in January and February engulfed several parts of the country and follows widespread flooding in 2012.

Environment Agency figures reveal that 7,950 properties in England and Wales were flooded last year, and that there were 78 days of flooding. Another round of reductions to Defra’s budget is likely to put further pressure on how much is allocated to flood defences, leaving communities without much-needed protection.

Support for renewables and flood defences could provide a spur to the ailing economy. A recent health check on the UK economy by the International Monetary Fund found little sign of growth returning. While the budget deficit remains stubbornly high and absorbing MPs’ attention, austerity risks worsening our environmental deficit.


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