Source · Select Committees · Public Accounts Committee
Recommendation 2
2
Defra has not set out precisely what environmental regulation should achieve and how the regulators...
Recommendation
Defra has not set out precisely what environmental regulation should achieve and how the regulators should be set up to achieve this. Regulators currently operate across a complex landscape, with overlapping responsibilities, differing cultures and inconsistent approaches. Yet Defra has not set out clearly what environmental regulation is intended to achieve, nor how regulators should be configured to deliver those outcomes. Regulators want greater clarity from Defra. The lack of strategic direction from Defra limits the regulators’ ability to plan coherently, target resources effectively or demonstrate how their work contributes to statutory environmental objectives. Defra sees no overall benefit in merging the regulatory responsibilities of Natural England and the Environment 3 Agency, despite forthcoming changes to water regulation presenting an opportunity for further wide-ranging reform. The Environment Agency has yet to establish a responsive and proportionate approach to inspections, and both regulators lack clarity from Defra over where they are empowered to take risks and innovate. recommendation a. As a first step towards developing a coordinated plan, Defra should set out a clear vision for environmental regulation with a focus on what matters and what makes the most difference b. Defra should take the opportunity presented by the changes in water regulation to explore the merits of bringing all its regulatory functions together to improve efficiency and enable the establishment of a single organisational culture which balances protection and enhancement of nature and the environment with supporting economic growth. c. If Natural England and the Environment Agency are not to be merged, then Defra should conduct a thorough examination to determine where they could cooperate more closely, such as in planning, legal functions, comprehensive advice and IT.
Government Response
Response Pending
HM Government
Response Pending
The government agrees with the Committee’s recommendation. Recommendation implemented Defra has set out a clear vision for environmental regulation through the Strategic Policy Statements (SPS) for the Environment Agency and Natural England published on 12 March 2026. These set out the government’s strategic priorities for each regulator in terms of how they deliver on environmental protection, nature recovery and economic growth. They also set out the government’s expectations that each regulator will exercise constrained discretion, ensuring strategic decision-making is prioritised over process compliance. The government disagrees with the Committee’s recommendation. Defra is already undertaking significant structural reforms of its Arms’ Length Bodies (ALBs). Following the Independent Water Commission, Defra has agreed to establish a new single water regulator by abolishing Ofwat and bringing together the relevant functions from the existing regulators (of Ofwat, the Drinking Water Inspectorate, the Environment Agency and Natural England) into one new body. This is a major reform and requires sustained focus to implement effectively. In addition, Defra is delivering ambitious, system-wide reforms arising from the Corry Review and the internal Optimising Delivery (Hancock) Review. These reforms prioritise action within existing legislative frameworks to promote joint working (such as LER pilots) and to strengthen culture, capability and decision-making within regulators (including through new Strategic Policy Statements for the Environment Agency and Natural England). Defra is also testing more integrated, place-based approaches through pathfinders with Mayoral Combined Authorities and protected landscape organisations. Significant activity is underway across Defra and its ALBs to strengthen culture and delivery at different levels. Defra’s Planning Reform Portfolio is developing a Culture Modernisation Programme to improve coordination, share learning and build the evidence base on how culture change can support more effective planning and infrastructure delivery across the Defra group. The government agrees with the Committee’s recommendation. Recommendation implemented The Planning Reform Portfolio has been established to enable a coordinated, system- wide approach to work on planning reform, permitting and environmental regulation across Defra group. An example of this collaboration between Natural England and the Environment Agency is known as the Lead Environmental Regulator (LER) model, which provides a coordinated approach to advice and regulation, with a single lead regulator overseeing activity across all relevant bodies. It also includes an escalation route to a senior regulatory panel and, if needed, to Defra’s Infrastructure Board. Currently, the LER model is being piloted on five major projects, including Sizewell C. Both Natural England and the Environment Agency are also part of Defra’s Group Corporate Services and benefit from the shared service model for Corporate IT. As part of Defra’s Service Transformation programme, the department is working to identify common capabilities which can be shared including systems for Permitting and Licencing, Grants and Monitoring.