Environment: Official green watchdog fears cuts

The Government's green watchdog says it is facing cutbacks and hundreds of jobs losses because ministers are sticking to their Tory predecessors' spending plans. But, says Nicholas Schoon, the threat can be lifted if it is allowed to charge polluting industry more.

The Environment Agency will have to cut 500 staff over the next three years unless it is allowed to boost its spending, its leaders warned yesterday.

Ministers in the Department of the Environment, Transport and the Regions have flatly rejected the agency's plea for the Tory government's spending plans to be changed - plans which would see real falls in its total income over the next three years.

Now it hopes it will be allowed to raise the charges it imposes on the firms in monitors by above the rate of inflation, to make up the shortfall. That idea was anathema to the last government but this one may be persuaded.

A large industrial plant operating several processes which emit pollutants into the air and rivers can be charged tens of thousands of pounds a year for inspection and monitoring by the agency. A small above inflation increase could bring in an extra pounds 5m which, said chief executive Ed Gallagher, could make all the difference.

The agency, created just 18 months ago by amalgamating several other organisations, has a pounds 560m a year budget and 9,500 staff who monitor and control pollution of land, air and water as well as overseeing flood defence and water resources.

Its chairman, Lord de Ramsey, and Mr Gallagher said activities which bring real environmental gains but which it is not compelled by law to carry out will have to be cut. One of these is its efforts to control fly-tipping, which is rising around the country after the introduction of a tax on waste dumping at landfill sites. In Northampton instances of fly tipping have risen 60 per cent.

Also under threat are its efforts to educate and persuade polluting industry, especially smaller firms, that cutting their output of toxic substances into the environment can boost efficiency and save money.

Mr Gallagher said he feared cutbacks could leave the Government vulnerable to legal challenges by environmental groups to the European Commission, and eventually the European Court.