Rural Estates Newsletter February 2023 - Flipbook - Page 5
The final tier, Landscape Recovery, remains at the pilot stage: the initial 22 projects were
announced on 2 September 2022. The opening of a second round of pilot projects later
this year has been announced.
Known unknowns
Thanks largely to the prospectus, the shape of ELMs and the payments that will be made under
it, are now much more transparent, but wider queries remain.
As Baroness Rock’s review of tenant farming in England (the Rock Review, published on 13
October 2022) made clear, much of the country is farmed by tenants and the average term is a
little over three years: hence, SFI is a three-year scheme. The Rock Review also recommended
that tenants should be able to enter such schemes without landlord’s consent. This is indeed
how SFI operates, but is at odds with the fact that some tenancy agreements will prohibit
tenants entering such schemes, without landlord consent. Defra also seems not sufficiently
to have considered the fact that circumstances change, and it is not possible to transfer the
scheme mid-term. If “management control” of the land is lost by the original scheme entrant,
then they must apply to terminate (albeit without penalty). Given that CS is now being retained
and enhanced, it would be nice to see CS’s existing – and useful – transferability replicated for
SFI to avoid extra administration.
The top tier of ELMs, Landscape Recovery, is intended to comprise schemes of 500 to 5,000
hectares of “broadly contiguous” land, with a number of landowners coming together to enter
into one, single agreement, with a blended public / private finance model. Agreements are
intended to last for 20 years, and it is foreseen that conservation covenants (as enacted by the
Environment Act 2021) may be used to bind landowners to their agreed actions. Cooperation
is wonderful in theory, but trying to bind numbers of landowners together for a long stretch of
time presents legal and practical difficulties. To name a few, what can each do on their land and
not do? Who pays the price of default if funding is withdrawn? What if circumstances change
and one landowner needs to withdraw, while the others wish to remain in? Ultimately, what if
the predicted outcomes are not achieved?
Unknown unknowns
Calls for a land use framework, to attempt to review and balance the competing demands
of housing targets, food production, public goods and eco-goods, are growing. How will
ELMs interact with competing land uses, of which there are an increasing number? How are
landowners supposed to weigh up their options and choose between them? The Forestry
Commission has launched a plethora of woodland creation and management schemes and
the Woodland Trust and Defra have more of their own. Rural estates may be able to make
land available to developers for off-site biodiversity net gain and nutrient neutrality. Or they
may be tempted to commit to schemes that create carbon or biodiversity credits. It is not
just a question of what scheme to use where, but also whether and how different schemes
can be used on the same land. Although Defra is clear that SFI and BPS can be claimed
on the same parcel of land (providing that the same action is not being paid for twice)
the broader question of whether and how different schemes can be “stacked” on parcels
of land and the principles of additionality are not well understood. The rules are not yet
established. This creates a headache for land managers, who will need to think strategically
about the future uses of the land they manage. When you add estate planning, tenancies,
tax reliefs and the hope of development into the bargain, the scenarios and calculations
start getting very complicated.
The recent announcements on ELMs are a good beginning, but not an end. Defra have
rightly focussed on providing the practical and financial detail that farmers need to
decide whether to enter the schemes. Without their support, the schemes will flounder
and government will struggle to make its recently updated, legally binding environmental
targets. How ELMs will actually operate within the wider context of competing land uses,
however, remains much less clear.
Rural Estates Newsletter
February 2023
5