Source · Select Committees · Environmental Audit Committee
Recommendation 5
5
Accepted
Use 2025 Spending Review to set out natural capital approach to spending and growth benefits.
Conclusion
We expect the Government to use the June 2025 Spending Review to set out how it has taken a natural capital approach to the evaluation of spending decisions as well as to set out how the approaches taken will grow the UK’s stock of natural capital; and what the expected benefits of this approach will be for nature and the wider economy. (Recommendation, Paragraph 37) 55 Market supply
Government Response Summary
The government confirms it established processes for Spending Review 2025 to assess climate and environmental impacts of fiscal decisions, requiring departments to provide relevant information for spending bids. It further highlights that the Spending Review committed over £2.7 billion annually from 2026–27 to 2028–29 for sustainable farming and nature recovery.
Government Response
Accepted
HM Government
Accepted
HM Treasury’s Green Book sets out that all policies, programmes and projects must be developed and assessed against how they deliver on the government’s climate and environmental objectives, as well as other policy priorities. Building on the extensive guidance already provided for evaluating and monetising natural capital impacts, the Government has published updated supplementary guidance to the Green Book on Enabling a Natural Capital Approach, including additional guidance on valuing biodiversity. To ensure due consideration is paid to the climate and environmental impacts of fiscal decisions, we have established processes to assess the climate and environmental impacts of fiscal events, with these impacts informing, alongside other policy considerations, decisions made by Ministers at Spending Review 2025. HM Treasury required departments to provide information on the climate and environmental impacts of their spending bids, building on approaches taken in previous spending reviews. As set out at the Spending Review, the Government is continuing to invest in the natural environment, confirming investment of more than £2.7 billion a year to support sustainable farming and nature recovery from 2026–27 until 2028–29.