Page last updated at 01:20 GMT, Thursday, 4 September 2008 02:20 UK

Flooding budget 'badly handled'

Flood sign
The 2007 floods hit Gloucestershire, Humberside and many other areas

Ministers failed to budget properly ahead of last year's floods and animal disease outbreaks, an MPs' report says.

The public accounts committee said that the Department for Environment, Food and Rural Affairs should have ensured enough funds to deal with such events.

Almost 50,000 homes were flooded, while many birds were slaughtered after the outbreak of HN51 bird flu and farms disrupted by foot-and-mouth disease.

But the government said it had shown "solid financial management".

The events of last year cost the department (Defra) an extra 60m, which had to be funded by reducing budgets for other activities in the department, the committee said.

'More rigorous'

In 2007/08, the department received 3.617bn from the Treasury but failed to allocate final budgets until five months into the financial year.

The committee's chairman, Conservative MP Edward Leigh, said: "As the risk of overspending became clear, the department had to make in-year budget cuts to its planned activities.

"This is a clear example of poor financial management harming the delivery of services."

The cross-party committee said there had been a lack of awareness of good financial practice among Defra's board members.

But it said the management board has since put in place "more rigorous" financial systems and that problems experienced in the last two years were not expected to recur in 2008/09.

Mr Leigh added: "The many lessons of what had gone wrong should be closely studied.

"Foremost among them are that a taut financial management culture has to be instilled throughout the organisation, from the management board downwards."

The department's budgets should also include "realistic provision for unforeseen events based on historic experience", Mr Leigh added.

For the Conservatives, shadow environment secretary Peter Ainsworth said: "This report lays bare the shambles at the heart of Defra"

But a Defra spokesman said: "The demands made on the department's budget last year were exceptional, with bird flu, flooding and foot-and-mouth all coming in short succession.

"It was testament to its solid financial management that Defra was able to manage the cost of these unforeseen events by reprioritising within its annual budget and avoiding the need to place additional burdens on taxpayers."

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