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Defra ofcials slammed over mid-year budget planning incompetence

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MPs THIS week suggested that the Department for Environment, Food and Rural Affairs (Defra) finance director and permanent secretary should resign following incompetent handling of the mid-year budget cuts.

'If this was a plc it would be looked for you both to move on.

Has that crossed your mind?' asked Labour MP for North West Leicestershire David Taylor of finance director Ian Grattidge and permanent secretary Helen Ghosh.

His comments were made at a one-off meeting of the Environment, Food and Rural Affairs Select Committee on Monday to discuss Defra's 2006 departmental report and budget.

Giving evidence to the committee Ghosh accepted that she did not fully understand how the Defra budget worked when the decision not to make cuts at the start of this financial year was taken. She claimed she did not realise that Defra effectively spends almost all its exible budget on 1 April, leaving little flexibility later in the year.

As a result of the decision not to cut the budget on 1 April, more than £200M of cuts were delayed until the summer, causing massive disruption to delivery agencies such as British Waterways and the Environment Agency.

However, Ghosh defended the action taken. She told the committee that 'a £200M budget cut signalled early in the year was by no means a disaster budget management'.

But the news worsened for those bodies dependent on Defra funding when Ghosh told the committee that 'if it was tight this year, it is no less tight next year'.

She was referring to next year's budget that has been promised to be in the hands of the delivery bodies by Christmas.

Ghosh said it will contain the same level of cuts seen in the reviewed 2006/2007 budget as Defra no longer has an end of year surplus, but one that will come in exactly on budget.

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