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£400 million for low-carbon Britain - Defra announces 2008/09 budget settlement

DEPARTMENT FOR ENVIRONMENT, FOOD AND RURAL AFFAIRS News Release (News Release ref :51/08) issued by The Government News Network on 21 February 2008

Setting out details of Defra's 2008/09 budget settlement, Hilary Benn has announced an increase in funding for clean energy technologies, investments and enterprises to over £400 million over the next three years.

As part of the domestic Environmental Transformation Fund (ETF), the Carbon Trust will receive £47.4 million to bring forward new energy technologies such as offshore wind, third-generation photovoltaic power, marine energy and biomass heating. This funding will also be used to increase the Carbon Trust's energy-saving loans scheme for small and medium sized enterprises by a further £12 million to £62 million since 2003.

In addition, over the next three years the government will also provide around £10 million for a new anaerobic digestion demonstration programme. Up to four commercial-scale facilities will show the potential of this technology to create renewable energy, reduce greenhouse gas emissions and avoid waste being sent to landfill.

The 1.4% real increase in Defra's overall budget on 2007/08 shows the government's commitment to the environment with significant new investment in the following areas:

* low-carbon technology - domestic ETF fund increased to £400 million plus £800 million to tackle environmental challenges in developing countries over the next three years;

* sustainable waste infrastructure - over £2 billion Private Finance Initiative credits provided over the next three years;

* flood protection - spending £2.15 billion over the next three years; and

* Rural Development Programme for England - resources doubled to £3.9bn available to 2013.

Announcing the budget settlement, Hilary Benn said:

"Now is the time to act together to tackle climate change and protect our environment. The Government must lead the way by ensuring we are investing in building a low carbon Britain.

"Defra spending will increase to almost £4 billion over the next three years but we must invest wisely. That is why we are focusing our efforts on helping to provide sustainable options for the future as well as supporting and influencing governments, businesses and consumers locally and globally."

As part of the 2008/09 budget settlement:

* Natural England will receive £176 million to enhance biodiversity, landscapes and wildlife in rural, urban, coastal and marine areas;

* The Environment Agency will receive £796 million to protect and improve the environment in England and Wales;

* Animal Health will receive £128.1 million to combat disease and ensure animals are healthy; and

* The Rural Payments Agency will receive £255.8 million to effectively administer the Single Payment Scheme payments.

The settlement takes into account all of Defra's essential spending while providing enough flexibility to ensure the department can protect against risks such as flood management and animal disease.

Notes to Editors

1. The establishment of the domestic Environmental Transformation Fund, jointly funded by Defra and the Department for Business, Enterprise & Regulatory Reform, was announced on 9 October 2007 by Hilary Benn and John Hutton alongside increases to £2 billion of credits for local authorities to attract private investment in sustainable waste and recycling facilities. Funding through the waste Private Finance Initiative will rise from £280 million in 2007-08 to £700 million in 2010-11.

2. Hilary Benn today increased the domestic element of the Environmental Transformation Fund from £370 million to £400 million over 2008/09-2010/11.

3. The allocation of the remainder of the domestic Environmental Transformation Fund in 2008/09 will be determined by the Department for Business, Enterprise and Regulatory Reform and Defra in due course.

4. Gordon Brown as Chancellor announced in the Budget 2007, an international Environmental Transformation Fund of £800 million to help tackle climate change and environmental challenges in developing countries and to reduce poverty through environmental protection from 2008/09-2010/11.

5. More information on the Environmental Transformation Fund is available at: http://www.defra.gov.uk/environment/climatechange/uk/energy/fund/

6. Defra is focusing on changing behaviour in the UK through awareness-raising campaigns such as Act on CO2. See http://www.direct.gov.uk/actonCO2 for further information.

7. Defra also announced increases of £200 million to over £2 billion to manage the impact of climate change on flooding and coastal erosion as part of the Comprehensive Spending Review for 2008/09 - 2010/11 on 9 October 2007. Investment across government will increase from £600 million in 2007-08 to £800 million in 2010-11.

8. On 8 December 2007, Hilary Benn confirmed a doubling of the Rural Development Programme for England to £3.9 billion between 2007-2013, supporting environment-friendly farming and improvements to the land to improve wildlife, water quality and contribute to tackling climate change.

9.The RPA allocation includes costs associated with the Older Cattle Disposal Scheme.

10. Details of funding for Defra delivery bodies for 2008/2009 is available at http://www.defra.gov.uk/corporate/busplan/spending-review/budget0809.htm

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Press notices are available on our website http://www.defra.gov.uk

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