The Environment Agency is by its very nature a stand-alone agency—and that is one of its strengths. It has a board, a chief executive and a chairman. The grant in aid is a lump sum and the agency is free to make its own priorities. It is free to determine how much to allocate to its various functions and responsibilities.

The Environment Agency has also been very effective in controlling costs and reducing its overheads, which generates more funding for it and is an aspect of its freedom to determine its own priorities. The agency currently allocates about £12 million to enforcement of waste issues.

It is also the case that fines that go into the Consolidated Fund can be allocated to areas that are considered to have the highest priority. There is a strategic issue as well. I know the arguments range for and against. The hon. Lady might know that DEFRA sponsored a successful conference on environmental law and environmental review, where a wide-ranging discussion took place on the nature of environmental law. I cannot offer any more comfort than that, except for saying that this will inevitably be an ongoing debate.

It is important to weigh up the arguments for and against. However, at the present time it is felt that the Environment Agency should be funded through its grant in aid. There is a distinction between the agency and local authorities. We should also bear in mind that the powers for local authorities are permissive, while the agency has duties and responsibilities.