MPs accuse DEFRA of financial mismanagement

The Environment, Food and Rural Affairs committee has blamed financial mismanagement for a £200 million deficit in the annual DEFRA budget.

In its report, DEFRA’s Departmental Report 2006 and DEFRA’s budget, the Committee recognised that some factors such as the 2006 avian influenza outbreak were beyond the department’s control.

But it said that the department itself has to take much of the blame for its precarious financial situation.

Among its criticisms the committee found the department had been “careless” and “over-optimistic” about the amount of money it would receive from the Treasury.

On top of this error, additional costs such as the Rural Payments Agency debacle and the avian influenza outbreak were enough to “tip the balance”, said the committee.

The result was sudden, unplanned, poorly explained and highly disruptive mid-year restrictions on the budgets of agencies, public bodies and voluntary groups reliant on DEFRA funding.

This, in turn, led to important environmental programmes and projects being postponed.

The committee said it is extremely concerned that funding will continue to be very tight for the department and its agencies over the next few years.

It is calling for spending priorities to be published as soon as possible to show how further efficiency savings will be met.

Commenting on the committee’s findings, the chairman, the Rt Hon Michael Jack MP said: “Our report reveals the shock to DEFRA’s financial systems of having to move from the cosy world of an underspending department to one of tough Treasury rules on departmental financial accountability.

“Tough financial times lie ahead for DEFRA—the report confirms that the department will need to be on top of its financial game if it is to meet all its many obligations from paying farmers on time to reducing their greenhouse gas emissions.”

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