Thank you very much for inviting me to speak at your annual conference. It is good to be here in Manchester, where I know much has been done to embrace our devolution of responsibilities to local authorities
Local authorities have a key role to play in the delivery of our economic and environmental policies. Ranging from animal health to air quality. From rural broadband to climate change adaptation. From waste management to green infrastructure.
You have understandably chosen the ‘route to growth’ as the theme of your conference. Growth is our number one priority.
Some will say that there is a conflict between some of Defra’s responsibilities and the growth agenda. But growing the economy and improving the environment are not mutually exclusive. In many cases the two can, and do, go hand in hand because a flourishing environment is essential to our future survival and prosperity.
Sustainable growth is about ensuring a healthy environment and strong communities, whilst avoiding unnecessary restrictions on business. And it is also about understanding and maximising and the contribution that our natural environment makes to our economy.
So what are we doing to boost the economy in the short term?
Take regulation. We have put considerable effort into regulatory reform; to remove barriers to growth which are unduly rigorous or complex, or just don’t serve a useful function. The regulations Defra alone have introduced since January 2011 are expected to bring business savings of around £143 million per year. As a result of the Red Tape Challenge, we expect reform of environmental regulation will save business more than £1billion over the next five years.
And this modernisation of regulation is designed to lead to smarter, more efficient, more understandable, and better targeted protections. Pollution legislation will continue to be streamlined under a single framework. Inspection and enforcement work can be more effective by focusing on higher-risk businesses: through adopting a lighter touch for businesses that have earned it by having a track record of good compliance.
Take also food labelling regulations which are being consolidated to make requirements more transparent and easier to understand. Benefitting both consumer and businesses.
The relationship between regulators and business is also important. Business wants clarity and certainty for the purposes of making investment decisions, as well as a clear path through the regulatory hurdles that exist.
I am encouraged by the strong leadership that local government has taken on this front. I recognise that this has been driven in part by budgetary constraints and the need to make more efficient use of staff and other resources. But partnership working has also fostered the sort of place-based innovation that you are so well placed to deliver with your local knowledge and expertise.
Two years ago, Defra and LGA, working closely together, supported the setting up of 11 Total Environment pilots to help showcase different approaches to partnership working on local environmental ambitions. Now the sort of activities identified by the pilots are becoming much more widespread.
We have built on the approach to joint working with the announcement of 48 Local Nature Partnerships over the summer. We look to LNPs to have an oversight of local environmental priorities, working in partnership with community groups, environmental organisations, Local Enterprise Partnerships and others.
The wider Defra network has also recognised its responsibilities, including working collectively when engaging with local authorities. The Environment Agency, Natural England, and the Forestry Commission are working cooperatively in a variety of ways, managed through a ‘Single Voice’ steering committee. I know that Robert Light will be covering more of what the Environment Agency is doing when he speaks later.
Another way in which Defra is seeking to boost the economy immediately is via investment in infrastructure. Our investment in flood and coastal erosion defence generates a return of £8 for every £1 spent, just from avoided flood damage. The overall benefits may increase two- or even three-fold if wider economic benefits like regeneration and inward investment are included.
We want infrastructure investment to be a win-win for the economy, the environment and communities. That is why we have established the Major Infrastructure and Environment Unit. This Defra-led initiative operates across government, our agencies and industry. Its remit is to ensure that new development will benefit both economy and environment by ensuring the requirements of the Habitats and Wild Birds Directives are met as smoothly as possible.
As well as supporting sustainable growth across the economy, Defra has a particular remit to drive rural growth.
In September, Owen Paterson launched the Government’s Rural Statement. It underlines our** **commitment to Rural England; reflecting our vision for successful rural businesses and thriving rural communities. In practical terms, it shows you how we are placing rural interests at the heart of Government.
The Statement highlights the fact that rural areas have untapped economic potential. And to be clear, we are not just talking about agriculture. Rural economies are as diverse as the urban economy. Rural areas contribute to £205 billion (in gross value added terms), or 19%, to the English economy.
The findings from last year’s Rural Economy Growth Review resulted in actions and funding amounting to £165m to stimulate the rural economy. The package includes supporting the establishment of five Rural Growth Network pilots, led by Local Enterprise Partnerships. LEPs, of course, remain central to delivery of the Government’s growth agenda and I welcome the engagement and support local authorities have provided to them.
The five Rural Growth Network pilots will receive around £15million to help tackle barriers to economic growth such as a shortage of work premises, slow internet connection and fragmented business networks. More than 3,000 jobs and 700 businesses are expected to be created.
We also have a Rural Community Broadband Fund, which enables the development of superfast broadband projects in the final 10% of ‘harder to reach’ rural communities. I expect a third round under the fund to open in January, and I would like to encourage you to promote it to your local community groups and work with them to put forward the applications.
To return now to where I started; Growing the economy and improving the natural environment, hand in hand. Our long term economic prosperity and social wellbeing will only be secure if we act now to build our resilience to future economic risks and pressures. But this must not be seen as a burden. Far from it. Nurturing sustainable growth provides huge opportunities for UK business.
Take the global market for low carbon and environmental goods and services, for example. This is now worth £3.3 trillion.
Defra can help business to seize opportunities to move into these new and growing markets. We are working through the new £3 billion Green Investment Bank to promote access to finance which delivers a growing and sustainable economy.
We have launched a business-led Ecosystem Markets Task Force to examine opportunities for UK business from expanding green goods, services, and markets which value and protect the natural environment. And we are positioning ourselves as a world leader in the development of national environmental accounts and economic valuation of the natural environment with advice from our Natural Capital Committee.
Considering the impacts of climate change, the economic consequences are that it could cost 5 to 10 per cent of GDP if we continue on the basis of business as usual. You will also all have seen the images of the impact of Hurricane Sandy. Although we cannot say with certainty that Sandy was a consequence of climate change, we all observed that the US was not ready to deal with the impacts.
Our ‘Climate Ready’ programme considers necessary adaptation measures required for a more resilient society, including infrastructure, health and emergency services and a robust natural environment. Getting adaptation right holds real opportunities for the UK now and in the future. There is a role for all sectors, including local government.
Local government plays a crucial role in the resilience of local spaces communities and businesses. Councils have a real chance to begin to embed climate resilience within risk management and procurement processes and start prioritising action according to local risk, in partnership with communities and businesses.
I welcome the LGA’s ‘Climate Local’ initiative. As many of you will know, its purpose is to help councils seize opportunities and capture benefits of a changing climate. Importantly it allows councils to move beyond mitigation and take real action to become more resilient.
For example, through building on their flood risk management responsibilities, dealing with drought, and managing the impacts of extreme weather. As an initiative developed by the sector, for the sector, it is one I strongly support and I encourage Councils to follow the strong leadership of those who have already signed up.
Turning finally to resource and waste. More efficient use of resources, including waste prevention and the management of waste produced has the scope to make a significant positive contribution to the economy.
The English economy has the potential to save over £23 billion through low and no-cost resource efficiency measures, which will benefit LAs directly - through measures they implement, and indirectly by a reduction in waste management costs.
In addition to the saving opportunities through waste prevention, there will continue to be extensive opportunities in the handling and recovery of material waste resources. Opportunities for growth and employment already exist in design, infrastructure build and the consequent operation of waste treatment facilities.
The type of jobs created will change as the UK moves to more complex technological solutions for waste management. These are likely to require a higher level of competence, skilled labour, professional and technical roles.
The landfill tax continues to rise - reaching £72 per tonne in 2013. So the financial savings to be made from reducing waste and business opportunities in collecting and recovering this material will each grow significantly in the coming decade.
There are also new markets for recovered products. So materials currently seen as waste come to be seen as a valuable** resource for another process or sector of industry. There are already mature recycling markets in several products; most metals, paper and glass, but significant opportunities to further develop areas such as **plastics and food waste.
High quality standards in recycling operations are important to support growth by maximising the economic value of the waste material collected. Revenue from the sale of quality recyclates can provide an income stream to local authorities, householders and businesses, which may in turn encourage investment in the sector.
We intend to develop and publish an Action Plan for consultation on the quality of recyclates shortly which sets out our vision for improving the quality of recycling. More generally, DCLG’s reform of planning regulations will assist in delivering growth of the waste industry.
Local authorities have an important role in promoting high quality recycling. You should not be afraid, in your procurement of services, to become more demanding of the level of quality achieved and where the material ultimately ends up. As collectors of recyclable waste, I’m sure you recognise that the way you run the collection service, and particularly your communications with householders can affect quality.
I hope I have illustrated today that the Government’s intense focus on reducing the deficit and driving economic growth is a shared task for us all, and is here to stay. There is much that we are already doing. But we must strive to do more, and be transformational.
Three weeks ago Lord Heseltine published his independent report into how the UK might more effectively create wealth. It is too soon to give you a Government reaction to this. It is, however, a stimulating report and one that is being very closely considered. And, standing here in Manchester, I think I must point out to those who have not noticed, that the closing quotation in the report is “What Manchester thinks today, the world will think tomorrow”.
Working to deliver economic growth alongside improving the environment means we at Defra have to confront difficult issues. I recognise that you, at local authority level, face many of the same challenges and conflicting priorities. But I hope today I have demonstrated that we at Defra are looking for ‘win-win’ ideas where environment enables growth - rather than holds it back.
I am confident that our trust in localities to come up with place-based and innovative solutions is and will be well-founded. And that together we can bring about truly sustainable solutions- where growth and environment are mutually reinforcing and support thriving, sustainable communities