Chancellor George Osborne’s Budget has revealed that the two key departments for the sector will see their departmental budgets cut by 2014.
The Department for Environment and Rural Affairs will see its Resource Departmental Expenditure Limit fall from £1.9 billion in both 2012-13 and 2013-14 to £1.7 billion in 2014-15. However, its Capital Departmental Expenditure Limit will increase from £0.4 billion this year and next to £0.5 billion in 2014-15.
While the Department of Energy and Climate Change will see its resource budget increase from £1.2 billion in 2012-13 to £1.4 billion in 2013-14, before falling to £1.1 billion in 2014-15. Its capital budget will increase from £2.1 billion in 2012-13 to £2.2 billion for the next two financial years.
However, the Budget also revealed that Defra had an underspend of £0.2 billion in its resource budget in 2012-13 and Decc had a resource underspend of £0.3 billion in the same year.
The Green Investment Bank also had a £0.6 billion underspend in the last financial year.
In a Budget that had little for the environmental sector, the Chancellor confirmed that Landfill Tax will increased by £8 per tonne from 1 April 2014 to £80 a tonne. It will increase to £72 per tonne from 1 April 2013.
The Chancellor also announced in his speech that there would be more support for energy intensive industries from 2015, although the documentation surrounding the Budget gave little detail on what this would entail. Any reduction in energy costs for large industries would be welcomed by the paper mills, although they will need to wait to see if there is any benefit to them.