Key departments agree to resource budget cuts

Defra and the Department for Communities and Local Government (DCLG) have agreed to cut 30 per cent of their resource spending budgets over the next four years, pre-empting the Comprehensive Spending Review on 25 November.

The review will show how the Government plans to eliminate the national deficit by 2020. Departments were asked to model 25 per cent and 40 per cent cuts to unprotected spending ahead of the review.

The two departments, along with the Department for Transport and the Treasury, have agreed to cuts to resource spending of eight per cent for each of the next four years, Chancellor George Osborne revealed on 9 November. He said the money would come from efficiencies and closing "low-value programmes".

But industry groups are worried that the cuts will eat into essential programmes and departmental responsibilities. The NFU cautioned that any cuts to Defra's budget cannot impact the department's responsibility to drive through its food and farming strategy, animal health, flooding and payment functions.

Union president Meurig Raymond said: "Our priority is for farming businesses to be productive and profitable, and we are concerned that cuts of up to 30 per cent could damage front-line delivery services that underpin this aim." He called for savings to be found in "back-office functions".

Raymond added: "The NFU also has concerns about cost recovery - if this simply means paying for the continuation of services that could be delivered more effectively and efficiently. We believe that there is scope for some services, including some provided by agencies such as the Environment Agency, to be delivered more cost-effectively by other providers."

The NFU will meet with ministers to find out how farmers and growers will be affected. Despite fears that local authorities would bear the brunt of the DCLG's funding cuts, that department's savings look set to come from its own central budget - not from local government grants.

Local Government Association chairman Lord Porter said: "We hope this is an early indication that DCLG is leading by example by looking at ways to absorb some of the funding cuts it will need to make as part of the spending review rather than passing them on to local government. We would encourage other Whitehall departments to follow suit."

Porter added that a "new way of working" is needed, with public money controlled locally by those who know where it is needed. "This will not only help us improve services but also help achieve shared local and central government ambitions to boost housebuilding, close skills gaps and grow local economies - and relieve pressure on the Exchequer," he said.

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