Sustainability Committee - Budget Report

1. The Committee has considered the spending plans for sustainability 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 16 October 2008, when it took evidence from Jane Davidson AM, Minister for Environment, Sustainability and Housing, Claire Bennett, Head of Climate Change and Water Division; Philip Nash, Head of Corporate Strategy and Jasper Roberts, Head of Waste and Local Environment Quality Unit.

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

·The level of committed spend within the draft budget.

·The number and value of Strategic Capital Investment Fund (SCIF) bids put in by the Minister

·The number and value of EU funding bids submitted the Minister

·The funding for Home Energy Efficiency Scheme (HEES) and the replacement HEES scheme. In particular, the methods for identifying the fuel poor and the allocation of capital investment.

·The delivery and prioritisation of aims within the environment strategy.

·Delivery and funding plans to achieve the 3% Carbon reduction target by 2011 and clarification on when the reduction programme will begin.

·Whether any allowances had been made in the budget for the inflation rate

·The decision to only increase revenue expenditure for waste spending.

·Funding for surface water drainage

·Possible Barnet consequential from Westminster legislation in particular the proposed Marine and Planning Bills.

·The budgetary provisions for the Environment Protection and Waste Management LCO.

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

·A list of proposed capital projects.

·A breakdown of the £46 million SCIF bid for HEES

·A note on the proposed investment in waste

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

·The reliance of the Minister’s budget on bids for SCIF and EU funding. While the Committee welcomed the substantial bids made by the Minster, they expressed concern about what would happen to the proposed schemes they were due to fund if these bids were not successful. They were particularly concerned about the reliance on the success of £46 million bid to make major inroads into the ever growing problem of fuel poverty in Wales and to make a major contribution to the One Wales 3% carbon reduction and the Welsh Assembly Government’s microgeneration targets.

·A lack of preparation within the Government, and in particular the lead Department of Environment, Sustainability and Housing, for achieving the 3% Carbon reduction target by 2011. The Committee felt that increased investment would be needed in 2009-10 in order to make sufficient preparations to achieve this target and there must be urgent clarification on when the Government 3% Carbon reduction programme will begin.

·The lack of capital investment in HEES. The Committee questioned whether the scheme was deliverable, and suggested that with the proposed change in criteria this budget would need to be frontloaded to meet the anticipated demand at the end of the current HEES programme and the start of the new programme.

·The reduction from the draft spending plans on waste by £8.1 million and the proposed policy of acquiring £500 million from market place to implement their waste policy. The Committee considered this to be a particularly concerning area given the current market climate.

·The level of proposed capital investment in flood defence measures, including those identified for SCIF and EU funding bids, and the ability of the proposed resources to meet the need for improvements in protection from flooding. . The complex structure for investment into flooding involving the Government, Local Authorities and water companies concerned the Committee as it was unclear who was undertaking the spending on this.

Recommendations

6. The Committee therefore recommends:

·That the Minister for Environment, Sustainability and Housing prepares a detailed plan, indicating where additional capital funding is to be obtained from to ensure that the projects planned using SCIF and European capital funding are able to be implemented if those bids are unsuccessful.

·That the Minister for Environment, Sustainability and Housing reviews the preparations needed in 2009-10 to achieve the 3% (or greater) annual carbon reduction from 2011 and ensures sufficient funding is made available in her own and other Minister’s departments to ensure the relevant preparations are made.

·That the Minister reviews the introduction of the revised HEES scheme and allocates additional funding from subsequent years to the first year of operation to ensure that all new and existing applications can be funded.

·Given the increased risks of flooding due to climate change, the Committee recommends that the Minister should seek to invest further resources from within her budget to capital expenditure on flood defences.