Capital Grants - Update

Defra has confirmed that the £150 million budget for the 2025 Capital Grants scheme has been fully allocated as of Friday 1^st August, just four weeks after applications opened on 3rd July. This is following a sudden closure of the grant offer last November. Over 8,000 applications were received and DEFRA commented "this is the fastest uptake ever for the offer and shows a clear appetite from the sector to transition towards nature-friendly farming".

The 2025 scheme offered funding across 78 eligible capital items, organised into six main themes: water quality, air quality, natural flood management, boundaries, trees and orchards, and assessments and improvements. This year's application included four new additions: woodland condition assessments, wildfire risk checklists, stone wall restoration, and support for educational access visits. Water quality improvements proved most popular with many applications requested for grants on projects such as yard upgrades to prevent runoff and fencing to prevent livestock entering watercourses.

For the first time, Defra introduced funding caps, setting maximum grant amounts of £25,000 for water, air, and flood-related items, and £35,000 for boundary, tree, and orchard enhancements. In addition, each business (SBI) was allowed to submit only one successful application per calendar year to ensure wider access to funding.

Responding to previous criticism over poor communication and abrupt fund closures, Defra adopted a more transparent approach this year which has been welcomed. They issued updates when funding uptake hit key milestones—50% and 75%—and made it clear that the fund would close once fully committed.. There may be some exceptions to the deadline on 1^st August at 1:30pm where applicants were unable to submit their application and had sought assistance from the RPA to enable them to submit it. The RPA will assess these on a case-by-case basis and confirm to affected applicants. Applicants who have had their applications approved will receive payment after their project is completed and they have submitted a claim

Looking ahead, the UK government plans to increase investment in its Environmental Land Management (ELM) schemes. Funding is due to rise by 150% over the next four years, growing from £800 million in 2023/24 to £2 billion by 2028/29. As part of this broader shift, the Countryside Stewardship Higher Tier scheme will open in September, by invitation only. Defra is also expected to announce updates to the Sustainable Farming Incentive's reformed offer following the sudden closure earlier this year and allocate £46.7 million from the recently closed Farming Equipment and Technology Fund (FETF).

Given the continued high demand for environmental and infrastructure grants, early preparation will remain crucial to secure support in future rounds. Those looking to apply are encouraged to monitor updates closely and begin planning projects well in advance of application windows opening.