Spring Spending Review explained

Department for Environment, Food and Rural Affairs funding overview.

As anticipated, the Department for Environment, Food and Rural Affairs (Defra) will see a 2.7% reduction in overall spending over the five-year review period, 2024/29. Despite this cut, Defra is allocated a total funding of £7.4 billion for 2028-29, with a strong emphasis on sustainable farming and nature recovery. The settlement also includes substantial investments in flood defences and digital transformation.

• Total funding: £7.4 billion in 2028-29
• Capital funding: £16 billion over the spending review period
• Sustainable farming and nature recovery: £2.7 billion per year from 2026-27 until 2028-29
• Flood defence projects: £4.2 billion from 2026-27 to 2028-29
• Digital service improvements: Over £300 million

Implications for levy payers

Farmers will benefit from £2.3bn for the Farming and Countryside Programme and up to £400m from additional nature projects. This includes increasing support for ELMS from £800m in 2023/24 to £2bn by 2028/29.

There remains some uncertainty regarding the distribution of these funds, and we will be closely monitoring developments in the coming days and weeks. Once details of the additional spending on Environmental Land Management schemes (ELMs) are released, we will continue our analysis to determine how these schemes can best benefit farmers through specific actions.

Key areas of focus will include:

• The allocation of the £2.7 billion per year for sustainable farming and nature recovery, and its impact on levy payers
• Analysis of how headline payment rates will translate into income for farmers

Additionally, given the spending review's focus on security, health, and economic growth, we will explore the role of agriculture in these priority areas. We aim to understand how a coherent and integrated land use framework, food strategy, and 25-year farming roadmap can support the government's overarching economic priorities.