A BETTER ENVIRONMENT - A SUSTAINABLE FUTURE

Energy efficiency and climate change policy will benefit significantly from Defra's 1.2 per cent real-terms increase, a sum representing £261 million per year by 2007-2008 which will also enable us to continue to work towards sustainable waste management, through improving recycling and minimising waste.

This, together with efficiency gains of at least £610 million in 2007/8, including £300m within local government expenditure on waste services, will allow Defra to move towards achieving its priorities.

Climate change will be a key theme for the UK when it takes the presidencies of the EU and G8 next year. More resources for reducing carbon emissions and improving energy efficiency paves the way for the UK to continue leading by example in tackling the issue.

Main highlights of the settlement include:

• Climate change and energy efficiency - Further action will be taken to make progress towards the domestic target of moving towards reducing carbon dioxide emissions by 20 per cent by 2010. The government's PSA target for climate change will also now be shared with the departments for Transport, Trade and Industry and Defra.
  
• Fuel poverty - An extra £95 million provided per year by 07/08 compared to 04/05, by improving the energy efficiency of homes under the Warm Front scheme;
  
• Waste - An extra £155 million PFI credits per year by 07/08 compared to 04/05, an extra £20 million per year by 07/08 for the new waste management Performance Reward Grant, providing investment in sustainable waste management and a new programme to support effective management of waste by business. This is in addition to overall increases in Local Government funding.
  
• Rural communities - The Treasury has worked closely with Defra and other departments throughout the spending review process to ensure that where policies impact on rural areas they address the different obstacles to delivery and needs of rural communities.
  
• Common Agricultural Policy, agreed in 2003 - A decoupled single farm payment will be introduced from 2005. At the same time, the Government will continue to press for further agricultural policy reform and implement the Sustainable Food and Farming Strategy.
  

Margaret Beckett, Secretary of State for Environment, Food and Rural Affairs, said: "This settlement is good news as it will allow us to consolidate work already done and build on the ambitious goals set out in the last spending review.

"Further action will be taken to tackle climate change at home and abroad. In particular our aim is to move towards the domestic target of reducing carbon dioxide emissions by 20 per cent by 2010 by increased spending on energy efficiency. I look forward to continued close working with other government departments to help meet these and other sustainable development goals.

"Increases in funding, will allow Defra to invest in critical areas like energy efficiency, fuel poverty, flood defences and, importantly, waste management.

"The settlement also reflects the priority the department is giving to sustainable farming and modernising rural communities. With this new financial commitment Defra can plan ahead and invest in building a healthy, sustainable and safe future for us all."