Exclusive: Defra faces spending cuts of up to 50 per cent

The Department for Environment, Food and Rural Affairs (Defra) has today set out its priorities for the next five years, despite growing fears that swingeing spending cuts could cripple the department.

BusinessGreen.com has learned that Defra has been ordered to present three spending scenarios to the Treasury detailing cuts of 25 per cent, 40 per cent and 50 per cent in the department's budget. The plans are expected to be delivered to the Treasury today and will be used to inform the government's autumn spending review.

A Defra spokesman admitted that the department was assessing how to deliver cuts over the next four years of 25 and 40 per cent, although he downplayed suggestions that cuts of 50 per cent would be imposed, arguing that such deep cuts would represent a worst-case scenario.

"We are working over the summer on where we can deliver savings and the department's budget for the full parliament will be announced on 20 October," he added.

BusinessGreen.com has also learned that the department is preparing a review of the arm's-length bodies it supports, which could see the control of a wide range of agencies transferred to voluntary and community groups. In particular, it is looking at the possible mutualisation of British Waterways.

In addition, sources familiar with the matter said that funding for the Sustainable Development Commission in England will be axed, although the body is likely to continue to operate in Wales and Scotland.

A spokeswoman for the Sustainable Development Commission refused to confirm whether or not the body was facing the axe, although she added that talks were ongoing between the commission and Defra about its future and that an announcement was likely next week.

The cuts prompted accusations from one observer that the government was using the deficit as "the fig leaf for a whole deregulation and decentralisation agenda".

The revelations come as Defra today officially set out its priorities for the next four years as part of the government's Structural Reform Plan (SRP), which aims to establish clear goals and measurable targets for each Whitehall department.