Govt slashes RDA budget by £270m, DEFRA by £162m

By Elaine Watson

- Last updated on GMT

Related tags School food trust Food standards agency Defra

Govt slashes RDA budget by £270m, DEFRA by £162m
The new coalition government will cut £270m from regional development agencies (RDAs), cut DEFRA's budget by £162m and slash £600m from quangos this year as it embarks on a radical cost-cutting drive to save £6.2bn.

While the School Food Trust has emerged relatively unscathed, with bosses having to reduce budgets by just £1m (an 11% reduction), staff at the Food Standards Agency​ are still anxiously waiting to hear their fate as the finer detail of the proposed Public Bodies Bill to tackle quangos has yet to be spelt out.

In a seven-page document issued by the Treasury​ this week, chancellor George Osborne also revealed that DEFRA (Department for Environment, Food and Rural Affairs) would have to save £162m (roughly 5.5% of its 2010/11 budget, but well below the 20-30% cuts some industry observers were predicting).

Some of this would contribute to the £270m savings that the government will make from cutting funding to RDAs, said DEFRA officials. The rest will come from limiting recruitment and reducing the number of non-permanent staff; "operational savings"​, efficiencies in flood management; and "savings within the delivery of selected programmes".

RDA budget slashed by 20%

Speaking on behalf of all RDAs, Sir Harry Studholme, chair of the South West RDA, said: "England’s RDAs have been asked to find £270m of savings ​[approximately 20% of their overall budget for the year].

“This will not be easy, particularly as we are already six weeks into the current financial year and RDAs will have already committed substantial parts of their budgets.

“We do not yet know which individual projects and areas of RDA work will be affected, but each RDA is likely to have to find a share of the overall reduction in the next few weeks. We cannot rule out at this stage looking to delay or scale back on some projects to which we are already committed.”

Pam Alexander, chief executive at the South East England Development Agency (SEEDA) added:"SEEDA is ready to make its contribution to these significant cuts.

"We will now work with local government, businesses and other partners to determine how to achieve the savings that the government and the country needs while protecting the areas of the economy in the South East where our work can make the most difference."

Transport spending cuts

However, the Freight Transport Association (FTA) questioned the logic of proposed swingeing cuts to the budget at the Department for Transport, which has been asked to find £683m of savings in 2010-11.

FTA chief economist Simon Chapman said:“While we accept that tough public spending decisions have to be made, it is short-sighted to under-invest in the UK’s transport network.

"Infrastructure is key to the UK’s economic recovery and without improvements in the way we move goods by road, rail, air and water we are selling our businesses short and consigning operators to years of congestion and delays."

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