Two weeks ago, Dame Glenys Stacey, chair of the interim OEP, told MPs in a committee hearing that although the watchdog’s budget had originally been trailed as being ring-fenced for five years, the updated proposition was for a reduced three year budget.
This prompted Green MP Caroline Lucas to submit a question to DEFRA, asking what the reason for the reduction was and why it had not been communicated to parliament.
In the government’s response, environment minister Rebecca Pow, said: “The intention, subject to finalising parliamentary passage, is to provide the OEP with a five-year indicative budget, with a ring-fenced budget for each spending review period”.
This restores the government’s position to the funding commitment made in 2019 in a pre-legislative scrutiny response.
Pow continued to say that DEFRA has agreed the approach with the Treasury in order “to give the OEP the greatest possible certainty over its finances for the coming years”.
The OEP will be required to report annually on whether it has sufficient funding to carry out its functions, and DEFRA will share this information with parliament, confirmed the minister.
In the hearing held by the Environmental Audit Committee and the Environment, Food, and Rural Affairs Committee in early July, Lucas also questioned whether Dame Glenys Stacey was concerned that the exact number of years the money would be ring-fenced for was not currently written into the Environment Bill.
Stacey dismissed the concerns, saying that the issue with ring-fenced budgets is that they are “concretised”, so if “something unexpected comes along we’re there with our begging bowl being asked to be treated with exception ... Yes [a ring-fenced budget] gives us some protection but the real question is will government fund us appropriately year in year out”.
Greener UK, a coalition of environmental organisations, welcomed the government’s commitment to provide a five-year indicative budget, but the group’s senior parliamentary affairs associate Ruth Chambers warned that “such to-ing and fro-ing highlights why long-term funding must be underpinned in the Environment Bill”.
She added: “It is really good news that the government has decided to recommit to a five year budget for the OEP. This appears to have come about after persistent probing by parliamentarians and civil society, highlighting the hazards of allocating funding for short periods at short notice with no legal underpinning. The government should now amend the Environment Bill to put this commitment into law."
The Environment Bill is currently progressing through the House of Lords, with report stage due to begin following the summer parliamentary recess.