Set up of a proposed £4 billion'Green Investment Bank' accompanies news of Energy Department's £250 million budget cuts

 

New reports have suggested that the UK government Environment department’s £250 million cuts will be generated from the conservation and green building schemes. This week, green organizations will be assessing the extent of the effects of the new big cut to be imposed by the government.

 

Currently, there are reports that the Department of the Environment, Food and Rural Affairs will lose around £162 million, or about 5.5% of its budget. The department of Energy and Climate change is expected to lose around £85 million, or about 2.5% of its budget. The two departments said that they would not be able to bring these savings by limiting recruitment and making in house spending only. The departments have been forced to make serious cuts to capital programmes that will greatly affect investments in the environment conservation sector in the UK.

 

However, most investors like farmers and landowners, about 200,000 in the UK, that receive billions of pounds in European subsidies will not be affected by most of the cuts. What this means is serious hampering to conservation and green building efforts via the significant withdrawal of funds for regional development agencies, that subsidize most agricultural, environmental and renewable energy schemes.

 

Department of Environment, Food and Rural Affairs spokeswoman said that it could take weeks to finalize details on the plan. The cuts, as she said, would include flood defense funding, surveillance of some diseases and IT programs for farmers and will greatly affect capital investments.

 

At the same time, the Queen last week announced the new energy bill in which households will now be entitled to borrow money from green investment bank to pay for carbon reducing measures.

 

The Queen’s speech was indicative of a radical shift in the UK’s housing and stock loans to allow people invest in measures like solar panels for energy generation. David Cameron had proposed to create a green investment bank that would loan individual households the money needed to invest in carbon reducing measures.

 

The “pay as you save” approach had a proposed allocation of £2 billion by the Labour party with the private sector expected to fund a similar amount that would allow households to repay the loan through their savings on energy. Even though it’s not clear how this environmental investment plans would work, the Tories had pledged £6,500 for every household while the Liberal Democrats had proposed £10,000 in the past. These investments, regardless, would allow households to invest in cheaper solar and insulation measures for environmental conservation.

 

June 1, 2010.