Treasury gives Defra £100 million ‘bonus’

19 November 2010

William Surman of the Farmers Guardian reports:

THE Treasury has awarded Defra a £100 million ‘bonus’ for agreeing to an early settlement on its spending cuts during the Comprehensive Spending Review, it emerged this week.

Caroline Spelman, the Defra Secretary, said the bonus was a ‘very important feature of our settlement’ when she agreed to cut £661 million from her £3 billion budget over the next four years.

Under the deal the Treasury will allow Defra to retain all proceeds from the sale of capital assets, such as national forestry and properties that form part of the departmental estate, up to the value of £100 million.

Mrs Spelman revealed the agreement while defending Defra’s spending cuts in front of the parliamentary select committee on Environment, Food and Rural Affairs (Efra) this week.

“It hasn’t always been the case that the Treasury has allowed a department to keep proceeds from asset sales. I commend the package we secured with the Treasury that contained this valuable element,” she said.

The settlement was described as a ‘bonus’ payment by Defra’s top civil servant Dame Helen Ghosh who said the money could be put towards any capital project within the Department.

Mrs Spelman added: “It will be perfectly possible for us to use the proceeds from sales of our assets towards increasing capital spend on flood defences for example.”

Over the course of the next four years Defra anticipates recovering between £30 and 40 million through the rationalisation of the Defra estate, plus tens of millions from the ‘planned sequential sales of the forestry estate’ and ‘possibly’ some more from the Covent Garden Market Authority.

The Treasury has given Defra an added incentive to sell its assets ‘at the right time’ by allowing the department to keep 120 per cent of profits if the sales are higher than the £100 million originally budgeted for.

The revelation came as cross-party MPs on the Efra committee grilled Mrs Spelman over ‘savage’ departmental cuts.

Efra chairman Anne McIntosh MP said Defra had left the British people exposed to flood risks and Neil Parish MP raised concerns over Britain’s ability to cope with an animal disease outbreak.

But Mrs Spelman reassured members that ‘none of the cutbacks will affect our front line services’ such as flooding or animal disease.

Instead she said savings would be made by ‘cutting back office costs’ and ‘driving efficiencies’ through the department. She added Defra’s 30,000 workforce would be reduced by up to 8,000 over the next four years.

via Treasury gives Defra £100 million ‘bonus’ | News | Farmers Guardian.

Leave a Reply

A sample text widget

Etiam pulvinar consectetur dolor sed malesuada. Ut convallis euismod dolor nec pretium. Nunc ut tristique massa.

Nam sodales mi vitae dolor ullamcorper et vulputate enim accumsan. Morbi orci magna, tincidunt vitae molestie nec, molestie at mi. Nulla nulla lorem, suscipit in posuere in, interdum non magna.