National Assembly for Wales

Rural Development Sub-Committee

Budget Report

1. The Committee has considered the spending plans for Rural Affairs priorities of the Welsh Assembly Government as set out in the Draft Budget Proposals 2009/10 and associated documents.

2.The Committee’s scrutiny of the Draft Budget Proposals 2009/10 took place on 20 October 2008, when it took evidence from Elin Jones AM, Minister for Rural Affairs, Huw Brodie, Head of Rural Affairs and Heritage; Huw Davies, Head of Rural Affairs and Heritage Business Unit and Rory O’Sullivan, Head of Countryside Policy Division.

3. The Committee sought clarification and further details on the following points during their scrutiny session with the Minister:

  • Reconciliation of the 2008/09 budget with the 2009/10 draft budget
  • The One Wales Commitments which had been funded in the budget
  • The separation of the Companion Animal Welfare Scheme and Cost Sharing and Responsibility BELs from the Animal Disease Control and Welfare SPA
  • The budgetary provisions for the Red Meat LCO
  • The funding arrangements for the organic farm conversion scheme
  • The planned expenditure for bovine TB eradication and whether the allocation was adequate
  • Whether any funding had been allocated to introduce Gamma Interferon testing for bovine TB
  • The areas of bovine TB expenditure DEFRA were responsible for and the areas which were under the WAG remit
  • Budgetary provisions in relation to the Rural Development Plan (RDP)  for the variation in the exchange rate between the Euro and Sterling
  • Whether there would be any budgetary implications from the review into Axis 2 of the RDP
  • Possible funding consequences arising from the proposed Marine Bills.
  • The funding for the young entrants scheme
  • The increase in the Forestry Commission capital costs

4. The Minister undertook to provide further information on the following points:

  • The unspent balance on voluntary modulation funding.

5. Following the session, the committee expressed concern about the following points:

  • The reconciliation of this year’s draft budget proposals to figures presented in the final budget 2007 was made difficult due to the restructuring of the MEG. While the Committee welcomed the clarity this restructuring will bring to the scrutiny of future budgets, the process was made more complicated for this year. Conflicting figures were presented in the MEG allocation tables and the Draft Budget Report 2009-10.  This made the scrutiny of changes in expenditure between 2008-09 and 2009-10 extremely problematic.
  • The funding for the bovine TB compensation scheme.  Whilst the Committee understood that the compensation payments were demand led, they were, nonetheless, concerned that the budget had remained at £11 million, although the payments had exceeded £16 million in the year 2008-09; and given that the introduction of bovine TB health checks in October 2008 would probably result in a far greater demand for payments during 2009-10 felt the provision was inadequate.  Furthermore, the Committee expressed serious concerns that there was no guaranteed source to meet these payments as the initial extra funding for the compensation payments would need to come from the Rural Affairs budget, and then there would need to be a discussion with the Finance Minister to raise additional funds.
  • The funding for the organic farming conversion scheme.  The Committee recognised this, also, was a demand led scheme, but were concerned that there were no controls on the applications and there were no provision for additional funds if there was a substantial increase in eligible farms.  The Committee were concerned about the Minister’s restructuring of funding within her budget for this scheme, would have a serious impact on new entrants to Tir Cynnal and Tir Gofal.

Recommendations

6. The Committee therefore recommends:

  • That the Minister for Rural Affairs reviews the funding for bovine TB compensation payments and prepares a plan of where additional money can initially be found in the Rural Affairs budget.
  • That the Welsh Assembly Government gives consideration in any future restructuring of budgets to the impact this may have on reconciliations and provides sufficient information to promote clarity and transparency.
  • That the Minister for Rural Affairs reviews the funding for organic farming conversion scheme and identifies where additional money can be found within the Rural Affairs budget.