Source · Select Committees · Public Accounts Committee
Recommendation 6
6
The Nature Restoration Fund has potential to benefit the environment and support developers, but we...
Recommendation
The Nature Restoration Fund has potential to benefit the environment and support developers, but we are not yet convinced Defra and Natural England are able to implement it effectively. The Nature Restoration Fund is an innovative solution to raising funds and commissioning projects to improve the environment when building, housing and infrastructure developments affect protected sites or species. It is an optional scheme which developers can join to discharge their environmental obligations. The Fund has the potential to better protect the environment, though it is in the early stages of policy design. Natural England expects to publish the first Environmental Delivery Plans in the Spring and Summer of 2026. Defra and its arm’s length bodies do not have a good and consistent track record in delivering complex and innovative schemes. Defra’s Biodiversity Net Gain initiative included similar aims to those of the Nature Restoration Fund, but was launched before it had all the elements in place which would enable its long-term success. Natural England will be leading on implementation of the Fund but has gaps in planning and digital skills, and is already under pressure to deliver its current responsibilities. We intend to provide scrutiny of the Nature Restoration Fund as its implementation progresses, to ensure that it delivers the intended benefits. We have concerns how, in the Nature Restoration Fund, Natural England will balance its obligations to restore nature with providing a timely and value for money scheme without putting extra burdens on developers. 6 recommendation a. Defra and Natural England should set out their plans to report publicly on progress and milestones with the Nature Restoration Fund, and should provide regular progress updates. b. Defra should clarify how the Nature Restoration Fund and Biodiversity Net Gain will work alongside each other, and how it will apply lessons learned from its implementation of Biodiversity Net Gain to the implement
Government Response
Response Pending
HM Government
Response Pending
The government agrees with the Committee’s recommendation. Recommendation implemented The Nature Restoration Fund (NRF) Implementation Plan, published on 18 December 2025, set out the approach to delivering the NRF, including plans for reporting on progress. Natural England is required to publish organisational annual reports, which will provide a high-level view of NRF progress including the amount of money received and spent under each Environmental Delivery Plans (EDPs). The government will also continue to provide updates on key developments as delivery progresses and has committed to report back to Parliament on the first nutrient pollution EDPs before any other EDPs are published. In addition to updates on the overall progress of the NRF, there will be regular reporting on individual EDPs, the key mechanism for implementing the NRF. This includes Defra’s commitment to report to Parliament on lessons learned from the first group of EDPs before progressing to the next stage as well as reports published at the mid-point and end- point of an EDP. The government agrees with the Committee’s recommendation. Recommendation implemented Biodiversity Net Gain (BNG) and Nature Restoration Fund (NRF) are distinct and complementary policies, both aiming to ensure that development delivers a net benefit for nature. The NRF is predominantly optional and will focus on enabling development in areas where it has stalled due to specific environmental obligations. For example, nutrient neutrality currently affects 8% of housing. BNG currently applies to all new housing (including exemptions) and is scheduled to go live for Nationally Significant Infrastructure Projects from November 2026. Following the delivery of BNG, Defra ran a full lessons-learned exercise. The learning from this informed the approach to delivering the NRF set out in the NRF Implementation Plan. Teams working on NRF and BNG continue to work closely together to ensure information on delivery is shared and the two programmes remain aligned. 39