Director of Policy and Advice Judicaelle Hammond delves into the detail of the Chancellor’s Spending Review and what this means for members.
Compared to the Chancellor’s previous outings on big announcement days, Wednesday’s Spending Review was a muted affair. In fairness, the economic outlook is less than rosy, and Rishi Sunak’s boss had been busily announcing various expenditure packages over the previous two weeks. The latest, the ten-point plan for a green industrial revolution contains some ambitions relevant to CLA members.
Going under the bonnet of what was announced this week, let’s start with the good news:
- The overall budget for agriculture is maintained;
- The Annual Investment Allowance will be maintained at £1m. It was due to revert to its previous £200,000 ceiling on 1 January 2021. This was something the CLA had called for, and good news for our members at a time when they might want to make competitiveness investments or diversify.
- In principle, the £1bn available for the Green Home Grant in 2021/22 is good news - again, something the CLA had called for. However, the scheme currently fails to address the challenges faced in traditional buildings, or off-mains gas dwellings, both of which are prevalent in rural areas. We will lobby government to change some of the rules so that our members have greater access to the scheme.
At the other extreme, the allocation of £1.2bn for superfast broadband rollout between now and 2025 (instead of the £5bn previously promised by the prime minister) is cause for consternation. We will work with other rural organisations to challenge this.
In other areas of expenditure, there are slow starts and missed opportunities:
- £92m from the Nature for Climate Fund is earmarked for next year. Given that this is meant to fund not only tree planting but also peat restoration, it is not obviously sufficient to meet the UK Government’s target of 30,000 ha of new trees a year. The CLA will continue to ask for simpler schemes and more attractive payment rates.
- The UK Shared Prosperity Fund, which replaces EU-funded regional development (such as LEADER and the Growth programmes), is merely being piloted next year, and we will have to exert pressure on LEPs, across Whitehall and in Parliament to make sure both the pilot and the eventual scheme are rural-proofed. The pilots will spend £220m. The planned pot is £1.5bn a year. This is a timid start.
- On flood management, the only game in town remains new defences. The £200m innovation programme is not additional money, and it’s over six years. The CLA will continue to campaign for an extra £80m a year to be spent on maintenance of existing defences.
- Last but not least, a £12bn envelope for the green industrial revolution sounds massive. It’s a start, but it’s spread over a number of years, it’s rather less than what France and Germany are committing to spend, and it is fairly tech- and urban-oriented. The challenge for the CLA will be to work with others to promote nature-based climate solutions, and ensure that the infrastructure needed for net zero - upgraded electricity grid, EV charge points - does not bypass rural homes and businesses.
Let’s hope for a more forward-thinking Spending Review next year.