Supplementary memorandum submitted by
Sir Donald Curry (A 62)
During my oral evidence to your Committee on
13 February, you asked me to let you have some further details
on the costs of the proposals in the Policy Commission's report.
I have provided this below.
The £500 million figure we quoted in our
press release was intended to give an idea of the scale of taxpayer
funding required to support our package. It did not represent
a fully scoped budget, an exercise that we simply lacked the time
to carry out. The question of precisely how much funding is needed
will now have to be worked through by the Government if and when
they decide to take our proposals forward. However, for your information,
our own rough estimate of costs was constructed on the following
Figures are for the period up to 2005-06.
|Additional (1) modulation match funding in England
|Additional (2) modulation match funding for Scotland, Wales, NI
|Proposals for improved R&D structure (inc. demonstration farms)
|Assurance, collaboration, local and regional food marketing, and improving food chain efficiency
|More advice and better regulation (3)
|DEFRA additional running costs (4) ||30
|Miscellaneous initiatives across Government (5)
1. Assuming 10 per cent modulation begins in 2004, this
is the additional funding required to match the additional receipts
raised by the new higher rate.
2. Though our remit applied only to England we say in
the report that we would hope that modulation would take place
on a UK basis. We therefore included an estimate of the costs
of the additional match funding needed in Scotland, Wales and
3. Some costs are assumed to be met from 2004-05 onwards
from modulated receipts and their match funding.
4. For reality we felt the need to include some measure
of extra internal resources for DEFRA to support these various
initiatives and especially developing the IT interfaces and other
administrative support needed to run an easy to access, light
touch "broad and shallow" agri-environment scheme.
5. This is a very broad figure covering items such as
better regimes to police importation of illegal meat and development
of a national nutrition strategy.
These figures represent the additional public expenditure
required to implement the Commission's specific proposals, on
top of DEFRA's existing baseline and already planned commitments.
Committee members also asked about the funding required from industry.
We would expect there to be contributions from industry to the
costs of the Food Chain Centre and its benchmarking work, and
promoting Red Tractor assurance schemes. Initiatives on collaboration,
improving food chain efficiency and local and regional marketing
will also require industry contributions. But the main contribution
from the food and farming industry would be in terms of the direct
payment recipts being redirected through modulation. At 10 per
cent modulation around £90 million a year of receipts would
be being redirected, over and above the effects of the modulation
I trust this is helpful to you.
Sir Donald Curry
28 February 2002