Modulation post-2013

The ‘new modulation’ at 15% does not have to be match-funded by national Treasuries.  In practical terms this is likely to mean less Rural Development money in the UK than is currently the case.  The total modulation rate already drops from 19% to 15%.  The UK Treasury is pretty unlikely to want to match fund this (lower) level now it does not have to.

A very simple example illustrates the point.  (Because we don’t know the UK Rural Development allocation we have used a notional £100);

Current:  UK SPS budget = £100.   Modulation @ 19% = £19 raised.  Match funded by Treasury = £38 for Rural Development.

Future:  UK BPS budget = £90 (10% budget cut).  Modulation @ 15% = £13.5 for Rural Development.  And that’s it.