1.We and our predecessor Committees have struggled to clarify with successive Secretaries of State and senior Defra officials their strategy for determining which policies and priorities will be altered by repeated spending reductions. We seek such a statement in response to this report now that the 2015 Spending Review has been announced and now that it is clear that Defra resource funding from HM Treasury will reduce by 15% by 2020. (Paragraph 14)
2.We recommend that Defra publishes urgently its strategic approach for achieving the necessary reductions in its budgets for the next Spending Review period. Detailed plans for implementing this, including how administrative savings are to be made, must then be provided at the earliest possible date. (Paragraph 15)
3.Given the scale of savings required under the Spending Review, it is highly likely that difficult strategic choices will need to be made, particularly as the more achievable cost-efficiencies have been made in response to budget reductions during the last Parliament. Successful delivery of vital environmental, agricultural and rural services will not be possible without strong leadership and a sharp focus on priority areas. (Paragraph 16)
4.The new Common Agricultural Policy has a highly complex set of rules to which farmers and government agencies must strictly adhere if EU funding is not to be jeopardised. This complexity means that there is a high likelihood of further disallowance penalties being incurred which will be payable by Defra in future years. It is essential that Defra continues to press the EU for simplified CAP arrangements, including a more effective set of rules which minimise financial risk and deliver the optimum outcomes for farmers, food supply and the environment. (Paragraph 22)
5.We welcome the commitment from Defra and the Rural Payments Agency to making CAP payments to farmers promptly and the promising start made in December to paying 2015 Basic Payment Scheme claims, but in view of long-running problems with such payments, we will continue to monitor over the coming months the performance of the Agency and its new IT claims processing systems.
6.We have announced an inquiry into air quality issues in view of the health and environmental impacts of air pollution. In that we will assess not only whether Defra’s plans are adequate for meeting specific nitrogen dioxide limits so as to avoid wasting potentially significant sums of public money in paying EU fines, but also whether the Department has a sufficiently robust policy for reducing air-borne pollutants to levels that safeguard health and the natural environment.
7.Defra’s policies must not only ensure compliance with current EU rules for environmental standards but be future-proofed against coming challenges. Robust policies and adequately funded programmes are needed to tackle air and water pollution and to minimise the risk of being fined huge sums by the EU. Incurring large fines at a time of reducing budgets prejudices the delivery of vital services and is completely unacceptable since it removes money from delivery of vital services. (Paragraph 29)
8.Defra’s six-year commitment to capital funding for flood defence work brings welcome certainty at a time of budget constraints. The large number of properties at significant, and in some cases increasing, risk of flooding means that prioritising spend on flood defences is essential if the UK is to minimise potentially huge costs of future flood events. Considerable economic gains may be made for local communities by unlocking for development land that would otherwise be unusable owing to flood risk. (Paragraph 34)
9.However, the Department has not obtained a firm commitment from the private sector that it will provide the level of investment necessary if funding targets are to be met. We welcome Spending Review assurances that funding to maintain flood assets it to be protected since investing in assets without assurance that they will be kept in adequate condition to meet rising challenges of flooding is not the most cost-effective use of money and reducing investment in activities such as dredging is a false economy. (Paragraph 35)
10.We are concerned that Defra’s requirement to find reductions of 15% in resource budgets over the next four years may affect vital flood protection work. We recommend that Defra set out within the next three months the implications of the Spending Review settlement on resource budgets for maintaining flood capital assets and for undertaking routine maintenance work such as the dredging of rivers. (Paragraph 36)
11.Failure to manage threats from animal and plant diseases causes significant costs to farming and rural communities. Sound science is essential to provide a robust evidence base for decisions on policies to tackle diseases. (Paragraph 40)
12.We welcome Defra’s investment in science and research to identify effective ways to minimise threats from animal and plant diseases, and we recommend that the Department ensure that the costs and benefits of supporting such research are explicitly taken into account in future funding decisions. (Paragraph 41)
13.Opinions differ strongly over how best to manage threats from diseases such as bovine tuberculosis (bTB). Defra must establish a thorough evidence base for underpinning policy formulation and communicate it in a fully transparent manner to set out clearly the reasons for the policy decisions it takes. Defra must publish full data on bTB incidence in areas where badgers have been culled. (Paragraph 42)
14.Tackling diseases such as bTB require a holistic approach and we recommend that the Government rolls out at the earliest opportunity all aspects of its strategy which are underpinned by a strong evidence base. We further recommend that Defra takes into account approaches by devolved administrations and the evidence as to the effectiveness or otherwise of the different nations’ approaches to managing bTB. (Paragraph 43)
15.Defra still has work to do to ensure that rural issues are addressed robustly by a number of other government departments. A small department such as Defra cannot attempt to monitor across Whitehall all of the actions that affect rural communities. Instead, it must put in place the right mechanisms to ensure that individual departments to take account of rural issues. (Paragraph 46)
16.Defra must champion rural communities more vigorously by ensuring that all government departments embed rural evidence effectively into their policy-making processes. We recommend that the Department respond in full to Lord Cameron’s review of Rural Proofing Implementation within three months explaining how it will achieve this. (Paragraph 47)
17.Absence of effective internet and mobile phone connectivity hampers economic growth in some rural areas. The Government must support timely and efficient roll-out of fast broadband to all communities if rural areas are not to languish in the broadband slow-lane. It should aim for 100% coverage as near as is practically possible for all communities. We recommend that Defra communicate strongly to the Department for Culture, Media and Sport the need for rural areas to take a central place in broadband and mobile telephony coverage plans, including in the development of Universal Service Obligations on the sector. Any new Universal Service Obligation must in practice deliver affordable connections at sufficient speeds to all areas of the country. (Paragraph 49)
18.Staff engagement is central to the effectiveness of Defra’s operations. Whether on the front-line responding to floods and animal disease outbreaks, or in back-office functions developing policies and supporting those delivering services, a motivated workforce underpins an effective Department. It is to the credit of staff working for Defra and its agencies that they have risen to the challenges to enable services to be delivered despite reducing resources. It is a concern, though, that Defra scores below the civil service average for staff engagement and on staff views of leadership. Clearly there are greater challenges in some agencies than others. We note what the new Permanent Secretary told us about a focus on staff and their development and a renewed focus on leadership. (Paragraph 53)
19.We recommend that, in updating the Committee on how the Spending Review will impact on service delivery, Defra inform us about its strategy for maintaining morale among staff and for ensuring that valuable expertise is not lost.
20.Defra’s ministers and senior leadership team must give greater priority to managing delivery bodies such as the Rural Payments Agency if the Department is to ensure effective outcomes from its policies. A shared vision and strategic direction is essential but this requires firm leadership and constructive relationships founded on good communication. (Paragraph 56)
Prepared 14 December 2015