Corry Defra Regulation Review

Introduce and publish a refreshed set of outcomes for regulators, linked to the Environmental Improvement Plan, with a clear accountability framework involving measurable outcomes that are monitored regularly by the department and reported on to Ministers and the public.

Set up a programme of experiments or sandboxes where regulators identify projects where they will waive regulations and measure the results. Project scope will need to identify any barriers. This could be done, for example, with developers on specific sites to see how outcomes can be delivered. This approach can help stimulate a culture of experimentation and permission without undue risk, whilst avoiding any harm to the environment, with consideration given to legal powers needed where relevant. The approach would work well for areas where improvements are being sought, for example on nature recovery or port infrastructure developments, rather than on areas where risk is being managed, for example on biosecurity.

Scope a rolling programme of reform for specific regulations, being clear what can be done rapidly, where the quickest wins are and what will take longer. This review suggests areas of focus, but the department needs to work rapidly to scope them and establish the programme. Pending fuller scoping, early priorities for reform are: The Water Environment (Water Framework Directive) (England and Wales) Regulations 2017; The Conservation of Habitats and Species Regulations 2017; The Reduction and Prevention of Agricultural Diffuse Pollution Regulations 2018; and The Environmental Permitting Regulations 2016. Some of this is already underway.

Defra should swiftly develop plans to reform slurry application and storage to help address diffuse water pollution from agricultural sources. This is likely to involve changing the Farming Rules for Water and wider regulations relating to slurry application and storage. This should aim for a single set of regulations which farmers can understand and comply with.

The work to update the Environmental Permitting (England and Wales) Regulations 2016 to allow regulators more flexibility to take sensible, risk-based decisions should be accelerated due to the important role it plays in supporting net-zero and circular economy priorities (e.g. facilitating the development of low carbon industrial infrastructure, and for ensuring remediated soil is not unnecessarily categorised as waste).

The recommended programme of reform for specific regulations should also assess instances of overlap and duplication in the application of regulations, with the aim of streamlining priority areas, for example in the marine environment, where multiple regulators are involved in assessing the same applications for port infrastructure. Both the regulations and the regulatory practices need examining and streamlining.

Allow trusted nature conservation and environmental partners and other organisations with good track records greater autonomy, through memoranda of understanding (MOUs) and wider deployment of 'class licences' enabling them to move fast on restoring nature without applying to regulators for multiple permissions. Criteria would need to be developed to ensure that a consistent approach is taken for how autonomy is earned and then recognised and retained. This should include the previous track record of the organisation in applying for permits and/or licences, organisational compliance and positive real-world impact. Some monitoring will be needed and the MOU quickly and publicly rescinded if compliance is found wanting.

Defra should rapidly review and rewrite its existing catalogue of compliance guidance to ensure it is fit for purpose, removing any duplication, ambiguity and inconsistency. The aim of the review should be a streamlined, clear and up to date catalogue, signposted for each sector so that it is easy to navigate. Stakeholders and customers should be fully involved in this process.

Regulators should commence more frequent risk-based monitoring, using real-time and digital approaches. Clear strategic plans should be produced by each regulator for how they are taking a risk-based approach to monitoring, as well as their approach to making their monitoring information more accessible to the public, using live, up-to-date, data to support holding businesses and regulators to account.

Defra should review the entire approach to enforcement and sanctions for environmental regulation to bring as much consistency as possible in the approaches taken for different offences. This review should consider where changes to legislation might be needed and aim to create tougher penalties for deliberate non-compliance and persistent offenders, for example in the waste sector, with regulators able to issue speedy fines for minor offences without going through the Court system.

The Office for Environmental Protection (OEP) plays an important role in providing independent scrutiny to Government action on the environment. However, as with our general approach, the OEP must ensure its focus is on outcomes not just process. Their recent report on the previous Government's progress towards delivering the Environment Act targets helpfully supports the need to go further and faster. Consideration should be given as to how the OEP can increase focus on the outcomes that are desired and support regulators to take more risk to achieve those goals within the Government's wider objectives.

Publish new Strategic Policy Statements for all regulators, starting with the Environment Agency (EA) and Natural England (NE), with the aim of restating the Government's priorities and mandating regulators to use constrained discretion to deliver the desired outcomes, taking account of the place-based dynamics, within the law. These statements should be consistent across all regulators to avoid the current situation where different instructions create confusion and inefficiency. Regulators have indicated that the current lack of uniformity in guidance is counterproductive.

A short review is needed to assess the current landscape of chargeable services and cost recovery across Defra, so it can go further in applying the polluter pays principle, to support the Department in providing faster and more transparent digital services to customers.

Defra should explore launching a Nature Market Accelerator to bring much needed coherence to nature markets and accelerate investment. This should be small, focussed and industry funded to provide independent assurance on the governance and standardised processes needed to guide and protect the interests of suppliers of nature-based projects; investors in biodiversity and ecosystem services; and other intermediaries and third parties involved in trading. Clear market rules and governance will be essential in delivering public goods and services. Further functions could include more hands-on intervention including identifying projects and matching of projects to investors.

Given the UK's financial and scientific expertise, Government should publish a call for evidence on further opportunities to increase private investment into nature from economic sectors who impact upon or benefit from our shared natural capital, for example through the role nature-based solutions can play as economic infrastructure.

Proposed nature-based solution (NBS), such as wetland mosaics for flood alleviation, currently go through full planning permission, equivalent to major infrastructure, which increases time and cost. Defra should conduct a six-month sprint, with industry, on removing the barriers to using NBS to flooding and pollution including planning, benefit-to-cost ratios, orders of magnitude of risk, BNG, and licensing, and then propose a way of reducing or removing these. Scientific evidence is still emerging on the potential application of NBS to tackling pollution, however there are examples of constructed wetlands reducing phosphorous in treated wastewater. A 'state of the science' assessment should consider the very latest evidence on the viability of nature-based solutions in this context.

Defra needs to quickly evaluate and improve the current compliance nature market schemes (including biodiversity net gain (BNG) and nutrients credits) to make any early adjustments needed to maximise their delivery. The schemes should be streamlined and simplified, with consideration given to whether there are different ways to aggregate BNG credits to help local authorities, farmers and landowners deliver wider environmental improvements.

Following the agricultural transition, Defra needs to set out publicly how rural grants and payments can be used by farmers and landowners, in combination with green finance, to balance food production and nature outcomes. The production of Defra's 25-year farming roadmap will be an opportunity to do this. This should set out where grants and payments have delivered multiple outcomes, how they can be integrated with green finance, and where they will need to continue to evolve to meet the needs of farmers and food production whilst delivering nature recovery outcomes.

Two 'digital champions' (a Minister and a senior official) should be appointed to accelerate the digital transformation of Defra and its regulators, setting priorities for investment and publishing an external plan within the next six months on how the customer experience and regulatory outcomes will be improved by the changes, and where any remaining paper processes will be removed. This should also cover how Defra will increase the transparency of the work of regulators by making live monitoring information accessible to the public, so they can see for themselves how regulators are improving the environment in their area. External experts should help guide this work.

Defra needs to build on the early progress being made to deliver a permitting portal which will show the progress of applications and increase transparency, by continuing to accelerate this work and ensuring consistency of approach across regulators, with a clear business case relating to the economic growth benefits from the investment. Staged delivery should be put in place across 2025 and 2026.

Use the momentum of the Defra Group AI Strategy 2030 to identify three high-ambition applications of AI which will (1) build Defra's role as a digital regulator, (2) support both economic growth and nature recovery outcomes, and (3) have an economy of scale across regulators. These applications should be generated from a cross-organisational 'bottom up' approach and be supported by Defra's Ministerial 'digital champion'. These applications could include, for example, applying AI to the geo-spatial information held by Defra to assess habitat changes; auto-filtering of permit or license applications, or using monitoring information to automatically trigger inspections.

Defra should fast track the sharing of data across regulators and externally, making external commitments to do more. Understanding and interrogating the huge amount of existing data Defra already holds as an organisation should be a high priority in Defra's digital and data transformation strategy, with a much greater presumption on information sharing, and increasing the amount of timely (released as close to real-time as possible), sustained and useful (minimum level of aggregation) data made publicly available. This will build organisational efficiency and an economy of scale, whilst building trust in our regulatory landscape as 'citizen scientists' have increasing access to our data.

Establish a Defra Infrastructure Board to accelerate the delivery of significant projects by providing early and strategic perspectives on priorities and outcomes. This should include a rolling, forward-looking pipeline of Nationally Significant Infrastructure Projects and other wider complex projects where relevant; in-depth lessons learned from previous projects; working closely with developers to understand specific barriers; use of Imperative Reasons of Overriding Public Interest (IROPI) where needed to justify projects; and a transfer of legal risk from regulators to the department. This Board should ensure regulatory decisions balance costs and proportionality, escalating high-cost or disproportionate issues to Ministers. In the long term, the Government should improve and strengthen the outdated Regulators' Code, to clarify the role of regulators in considering the costs of compliance and proportionality for those being regulated.

Consolidate the statutory duties, principles and codes of Defra regulators to a core set, reflecting the Government's priorities and helping to provide discretion, e.g. a duty to deliver on/consider climate change/net zero. This will address the increase in regulator-specific and regulator-generic legal obligations and resulting 'regulatory overload' which has emerged over time, resulting in confusion for those who are regulated whilst also weakening accountability. Further work is needed here to scope the legal obligations and to ensure consistency with any wider approaches. Updated duties will need to be consistent with refreshed outcomes and strategic policy statements.

Support better cooperation between regulators and appoint a lead regulator for all major projects in which multiple regulators have an interest. Some changes to regulatory structures or regulations would be necessary to grant a lead regulator authority to make decisions on behalf of other regulators. In the meantime, Defra should promote more information sharing and clearer processes for major projects. This should be agreed by regulators at the outset of projects, with emphasis on projects which represent significant private sector investment and/or have a high degree of complexity. This should include developing a framework that outlines how a lead regulator would operate in sharing information and supporting decision making, and the criteria for appointing a lead regulator. In addition, where projects interact with a single regulator, there should always be a named contact provided.

Assess potential for regulators to have targeted pay flexibility so they can employ and retain staff, particularly specialist staff. This should be considered as part of the Spending Review settlement and involve seeking specialist pay rates, or more flexible pay bands, especially for positions that require unique skills or are difficult to fill. This can help ensure that salaries are competitive with the private sector and experienced staff are retained.

Ensure regulators are devoting the right balance of time and resourcing to driving outcomes including growth. Defra should review this as part of the Spending Review settlement and ensure that operating models (a) are maximised to attract private sector investment; (b) allow regulators to recover the full cost of services, removing barriers which exist at present; (c) consider what new approaches are needed, especially in the EA, to avoid staff being pulled away from essential regulatory functions to deal with emergencies.

Use LNRS across the 48 strategy areas as a basis for building and embedding 'local Environmental Improvement Plans (EIPs)' which cover all elements of the national EIP, which Combined Authorities can work with local partners to deliver. This consolidation of various local plans and strategies is a major task which should build on the opportunities of the Devolution White Paper to set out clear environmental plans at a local level. Alongside this, there is an opportunity to ensure that funding being provided to local authorities and other partners to be spent on environmental outcomes is considered and brought together, as far as possible, to be directed towards delivery of the plan. As part of the EIP refresh, or shortly afterwards, Defra should implement the following action.

Review the funding streams connected to place-based delivery, for example biodiversity net gain, to ensure they can be used as flexibly as possible to help local authorities and regulators deliver the Government's Environmental Improvement Plan and Local Nature Recovery Strategy ambitions.