What the spending review means for farmers

Taken from the Farmers Guardian

Defra has been criticised for a lack of detail on what its spending settlement will actually mean. Here is what we do know:

Defra’s overall settlement

Defra’s budget will be cut by £700 million to £2.2 billion in 2014/5 from £2.9bn in this financial year. Over the four years, Defra will reduce resource spending by 29 per cent, capital spending by 34 per cent and its administration budget by 33 per cent. Defra’s 8 per cent per year on year cuts are among the very highest across Whitehall. .

Rural Development Funding

Defra is able to reduce its contribution to rural development funding by £66 million, while maintaining spending on its schemes.

It has benefited from exchange rate movements, which mean it is receiving more in rural development funding from Brussels, enabling it to reduce the UK match fundng element.   

Farming Minister Jim Paice told journalists the amount of money available for the RDPE over the next four years will actually see a small increase from £573m in 2010 to £590 in 2013.

He said there was enough money to push ELS participation to meet Defra’s 70 per cent targets and for uptake of HLS to grow by  83 per cent as ‘classic’ stewardship schemes agreements expire over the next few years.

Responsibility and Cost sharing

All we know is that Defra will ‘take forward proposals to involve the industry in sharing the responsibility and cost of disease control’ to help cut its £357m animal health budget. .

No detailed decisions will be made until Rosemary Radcliffe’s advisory group published recommendations on the policy in December.

 A Defra spokesperson said: “We’ll be making efficiencies in how we do things, but we’ve made no secret of the fact that the industry will need to share both the responsibility and some of the cost of disease prevention and control.”


Administration costs by £174 million through reductions in staff numbers, more efficient IT and procurement practices, increased use of shared services across Government; reducing the size and cost of DEFRA’s corporate estate.

Defra and its arms length bodies will lose between five and eight thousand jobs out of a current workforce of around 30,000. Mrs Spelman said: “I can’t get away from the fact that this will involve jobs.”

Defra’s quangos will be reduced from 92 to 39 (see page 3).

Red Tape

Again few details, other than a promise to ‘reduce red tape and unnecessary burdens on farmers and food producers, without compromising standards’, following the Macdonald red tape task force report early next year. Mrs Spelman did indicate the number of inspections could be cut . “We have double or triple inspections doing the same thing,” she said.


An expected 15 per cent efficiency saving will be made in the procurement strategy for flood and coastal defences. Savings achieved from this will be reinvested into ensuring improved flood protection can be expected for 145,000 households in England.

Other Defra policies

Funding will be stopped for 7 waste PFI projects, saving £3 million by 2014-15 and more in the longer term. Reforming the Environment Agency’s staff lease car scheme – saving up to £3 million per year.


The BBC will contribute £300 million to the £530 million the Government plan to spend over the next four years to bring super-fast broadband to rural parts of the country that the private sector will take longer to reach. Pilots will go ahead in the Highlands and Islands, North Yorkshire, Cumbria and Herefordshire.

Renewable Energy

 Fears that the Renewable Heat Incentive (RHI) would be chopped were allayed by George Osborne when he committed £860 million to ensure farmers and other operators will be paid premium prices for every unit of renewable heat they produce. However, feed-in tariffs, which pay a premium on every unit of green electricity produced, will be refocused on the most cost-effective technologies saving £40 million in 2014-15.