Sustainability Committee

2 December 2010

Report on the Draft Budget Allocation 2011 – 2012.

Background

1. The Committee has considered the spending plans for sustainability priorities of the Welsh Government as set out in the Draft Budget Proposals 2011-12 and associated documents.

2. The Committee’s scrutiny of the Draft Budget Proposals 2011-12 took place on 25 November 2010, when it took evidence from Jane Davidson AM, Minister for Environment, Sustainability and Housing, Matthew Quinn, Director, Department for Environment, Sustainability and Housing; and Brian J Pickett, Sustainable Futures - Operations Team, Finance.

Scrutiny of the Minister

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

• How the draft budget relates to departmental priorities in terms of outcomes;

• How the Minister prioritised capital expenditure;

• What discussions had taken place with other Ministers regarding cross-cutting themes;

• What assessment had been made of the impact of cuts on sustainability objectives and targets;

• What options had been considered for savings in the environmental delivery bodies;

• How the Minister planned to ensure that Environment Agency Wales was getting value for money with regards to the charges made on it by the Environment Agency centrally;

• How equality of opportunity issues had impacted on the design of the budget;

• What funding the Minister had secured from the Invest-to-Save scheme;

• The impact of budget cuts on delivering climate change objectives;

• The impact of capital reductions on the flood and coastal risk programmes;

• How the investment in the food waste programme would be utilised;

• The position of the Sustainable Development Commission post March2011;

• The impact of the contaminated land programme ceasing;

• The intended use of the budget allocations for nature access;

• The impact of the budget cuts on the planning system;

• How the Minister planned to develop capacity ahead of the devolution of building regulations in December 2011;

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

• The process of securing Invest-to-Save grants, and the projected savings within her department from the investment in flood defence and energy efficiency projects;

• The impact of energy efficiency measures in securing financial savings across the public sector;

• The future of the Planning Improvement Grant for Local Authorities;

5. Following the session, the Committee made the following observations:

• The Committee welcomed the relative protection the Minister had given to the DESH budget compared to that of DEFRA in England;

• The Committee expressed concern that, with the exception of the cancellation of the contaminated land programme, the Minister had failed to provide clarity on where cuts were to be made and could not identify any outcomes or objectives that would be negatively impacted by the cuts;

• The Committee was also concerned that there appeared to be a reliance on efficiency savings being made in statutory bodies, especially given that the future structure of these bodies is currently unclear;

• The Committee was further concerned that the Minister did not provide any assessment of the impact that the cuts in delivery bodies’ budgets will have on their ability to deliver;

• The Committee was concerned that DESH had been awarded £2.9m for the Invest-to-Save programme for energy efficiency and £0.8m for the flood defence programme, yet the Minister was unable to clarify to the Committee what the expected savings from these projects would be;

• While welcoming the Minister’s decision to protect the capital budget for flood protection, the Committee is concerned that the Minister is unable to specify exactly where the savings will be made in the revenue budget to pay for this, especially given that the revenue budget has also been cut

• The Committee expressed concern that there seemed to have been a significant cut in the funds set aside for building capacity ahead of the devolution of building regulations when compared with the Minister’s previous statements;

Recommendations

• The Minister should provide greater clarity regarding where savings are to be made to pay for those areas of the DESH budget that have been protected, and what One Wales objectives will not be achieved as a result;

• The Minister should provide full details of how she intends to fulfil her capital commitments when, in real terms, the budget for capital drops by 20.9% in 10/11 and 32.6% in 13/14, and the revenue budget by 4.4% in 11/12 and 9.5% in 13/14. The Committee does not feel that the Minister adequately explained how she was going to be able to capitalise a substantial portion of the revenue budget without having an effect on her Department and agencies’ ability to deliver on their objectives;

• The Minister should clarify the situation regarding the Invest-to-Save grants awarded to her department and the projected savings from these projects;

• The Minister should make an assessment of how the budget cuts will affect the Welsh Government’s ability to fulfil the obligations set out in the Marine and Coastal Access Act 2009 and the Flood and Water Management Act 2010 and its ability to build capacity ahead of the devolution of building regulations;

• When making a decision regarding the future of environmental delivery bodies in Wales, the Minister should publish clear and detailed information on the financial implications of her decision;

• The Minister should think creatively regarding opportunities for additional revenue-raising by public bodies within her remit.