Defra's budget will be cut by a further 9.6% in 2015/16 under spending plans announced by the chancellor. Decc, meanwhile, will have another 8% shaved from its budget
The cut to the administrative budget of the environment department is one Whitehall’s largest and leaves Defra with £100 million less to spend in 2015/16 than in 2014/15.
The Treasury says it expects Defra to save £54 million through “better joint working” between the department’s bodies, which include the Environment Agency and Natural England.
Although Defra’s overall capital expenditure budget will remain the same between 2014/15 and 2015/16, it will fall 7.7% in real terms.
The latest financial settlement for central government departments means that between 2010, when the coalition came to power, and 2016, Defra’s administrative budget will have declined by more than 30% – from £2.3 billion in 2010/11 to £1.6 billion in 2015/16.
The energy and climate change department, meanwhile, is expected to save £83 million in 2015/16 through administration “efficiencies”, such as replacing IT systems and by cutting costs associated with external bodies, such as the Nuclear Decommissioning Authority.
According to the Treasury, the completion by 2015/16 of major programmes, such as the electricity market reform and the green deal, will enable Decc to reduce its resources.
George Osborne told parliament that regulators, had agreed a £78 million cut in costs in 2015/16. This means most bodies, including the Environment Agency, are facing a 5% real-term reduction.
The lower settlement for Defra will also affect other bodies, including Wrap, which is partly funded by the environment department. Wrap has announced that the amount of money it receives from Defra will fall by 40% over the next 18 months – taking it to £15.5 million in 2015/16.
Chief executive Liz Goodwin said less money from Defra would mean that Wrap has to focus on fewer priorities and stop doing some lower impact work. She also said the environment department currently provides less than half of Wrap’s income.
“We will still be receiving significant funding, which will allow Wrap to continue to achieving improved use of resources,” she said.
