Agriculture & Horticulture Development Board chiefs say it will make savings

Agriculture & Horticulture Development Board (AHDB) chiefs say the body is on track to make savings, although its move to Stoneleigh Park, Warwickshire, created a £10m deficit.

Concerns had been raised that, despite the Horticultural Development Company (HDC) finishing the financial year with a surplus of £654,000 - which chairman Neil Bragg noted in his sector report "will be available for horticultural research in future years" - it would end up short of cash because of the AHDB deficit.

This was because accounts showed that the HDC needed to transfer £780,000 to AHDB central funds as its share of the deficit.

However, AHDB chief executive Kevin Roberts explained: "The £780,000 from the HDC is a notional transfer. It is a cashflow issue rather than a reserves issue."

The money is expected to be available this financial year through annual savings anticipated to reach £3.8m for the next three years.

The AHDB will also receive a £4.75m grant from regional development agency Advantage West Midlands in this financial year, which will redress the budget deficit, Roberts said.

Redundancy pay, terminating leases on properties and pensions are part of the costs.

Commenting on the raw figures from the report, HTA director general David Gwyther said: "There is no clear evidence of the savings that were going to be made by the new organisation coming through."

Plans are underway for a new building - budgeted at up to £11m - to be developed at Stoneleigh by spring 2011, but for now the levy bodies are in rented premises.

Bragg said: "We've got to be prudent about what we are spending money on but the combined structure of all the levy bodies means we've got flexibility now to do things we've never had the opportunity to do before. The biggest threat to us at the moment is continuous erosion of centralised funding."

NFU chief horticultural adviser Phil Hudson said he believed there was the potential for savings to be made through the relocation.

He said: "At a very basic level, if you have got organisations duplicating a number of functions such as human resources, IT and finance, the fact this will be done by one organisation implies there will be substantial savings.

"They can get more bang for their buck but it is about the management driving it through."

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