Development of our inquiry
4. This year we amended our normal approach to this
type of inquiry by holding two oral evidence sessions with senior
Defra officials instead of the usual one. Our initial evidence
session, held on 19 July 2006, concentrated on the Department's
progress in meeting its efficiency savings and PSA targets. Our
second session, held on 4 December 2006, focussed on Defra's management
of its 2006-07 budget. Defra was represented in both sessions
by Helen Ghosh, the Department's Permanent Secretary, and Ian
Grattidge, Director of Finance, Planning and Resources.
5. During our first session, the Permanent Secretary
surprised us by telling the Committee that the Department was
currently dealing with some serious financial difficulties. She
explained that Defra was in the process of revising its own 2006-07
core budget, as well as those of some of its affiliated executive
agencies and NDPBs, such as the Environment Agency and Natural
England.[5] The Department
was making these revisions in-year to cope with an estimated deficit
in its 2006-07 budget of about £200 million. At this time,
the Permanent Secretary was unable to give exact details about
the extent and impact of potential cuts. Such details had yet
to be finalised. Instead, she gave rough estimates about the scale
of the problem.[6]
6. Over the summer, and particularly once Parliamentary
business resumed in October, the issue of Defra's 2006-07 budget
cuts received considerable attention from Members in the House
and in the media. Information about the causes and impact of the
budget cuts, however, was only made available by the Department
in a disjointed and piecemeal fashion. This was primarily through
answers to Parliamentary Questions and by ministers giving radio
interviews. A definitive explanation of the causes and impacts
of the cuts was not given by officials or ministers. Consequently,
in October 2006, we agreed to extend our inquiry into Defra's
Departmental Report 2006 to take further oral evidence specifically
about the 2006-07 budgetary changes. A second session with Helen
Ghosh and Ian Grattidge was held on 4 December about this issue
and the name of our inquiry was changed to Defra's Departmental
Report 2006 and Defra's budget.
7. Before and after both evidence sessions with these
officials, we sent written questions to Defra, prepared with the
assistance of the House of Commons Scrutiny Unit. Some of these
questions highlighted a number of technical details and discrepancies
in the Departmental Report; others asked for further information
relating to the 2006-07 budget. The Department's responses to
our questions are published as written evidence along with this
report.[7] Before our second
evidence session in December, we also sent written questions to
some of Defra's affiliated agencies and NDPBs affected by the
in-year budget cuts. These were the Environment Agency, Natural
England, British Waterways, the Veterinary Laboratories Agency
and the State Veterinary Service.[8]
We also invited two voluntary interest groups reliant on Defra
fundingthe Bat Conservation Trust and Butterfly Conservationto
comment on the impact on their work of these cuts. Written evidence
from all these bodies has also been published along with this
Report.[9] We are grateful
to all of those who provided this evidence.
Departmental changes in 2006
8. On 5 May 2006, the Rt Hon David Miliband was appointed
Secretary of State for Environment, Food and Rural Affairs. Mr
Miliband's foreword to the 2006 Departmental Report identified
progress on climate change as his "top priority" and
risk management and contingency planningparticularly in
relation to avian influenzaas key areas for continued focus.[10]
Mr Miliband also set out his priorities relating to energy, water,
waste, food and farming, land and the marine environment in an
open letter to the Prime Minister on 11 July.[11]
9. Mr Miliband gave evidence to the Committee on
12 July 2006 in relation to the Committee's inquiry into The
UK Government's "Vision for the Common Agricultural Policy",
and to discuss other areas of Defra's work.[12]
1 Liaison Committee, Second Report of Session 2001-02,
Select Committees: modernisation proposals, HC 692, para
16; Modernisation Committee, First Report of Session 2001-02,
Select Committees, HC 224-I. Back
2
Environment, Food and Rural Affairs Committee, Twelfth Report
of Session 2002-03, The Departmental Annual Report 2003, HC 832;
Fifteenth Report of Session 2003-04, The Departmental Annual Report
2004, HC 707; and Fourth Report of Session 2005-06, The Departmental
Annual Report 2005, HC 693. Back
3
Defra, Departmental Report 2006, Cm 6827, May 2006 Back
4
Defra, Resource Accounts 2004-05, HC 445, October 2005,
p 5. Back
5
Q 59 Back
6
Q 63 Back
7
Evs 1, 33, 43 and 44. Back
8
There was initially some confusion about the State Veterinary
Service's (SVS) in-year budget reductions. Although the SVS's
resource budget was reduced by £3 million, this money was
actually re-classified within the SVS as capital expenditure.
SVS's budget, therefore, has not been reduced in total. For further
information about changes to SVS's 2006-07 budget, see para 47
of this Report and SVS's evidence, Ev 101. For more information
about resource and capital budgets, see para 12 and footnote 14
of this Report. Back
9
Ev 81 [Environment Agency]; Ev 89 [Natural England]; Ev 95 [British
Waterways]; Ev 79 [Veterinary Laboratories Agency]; Ev 101 [State
Veterinary Service]; Evs 77 and 78 [Butterfly Conservation]; Ev
98 [Bat Conservation Trust]. Back
10
Defra, Departmental Report 2006, pp. 6-7 Back
11
David Miliband's letter to the Prime Minister, My priorities
for Defra, 11 July 2006. Available on Defra's website at:
www.defra.gov.uk/corporate Back
12
Environment, Food and Rural Affairs Committee, Session 2005-06,
The Work of Defra, HC1520-i Back