Environmental regulators spread too thin to protect nature while delivering reforms - New PAC report

- Increasing problem of illegal waste sites surpasses Environment Agency's powers

- PAC urges government to consider merger of Natural England and Environment Agency

The Public Accounts Committee (PAC) is not convinced that environmental regulators and government can fulfil their existing responsibilities while delivering ambitious reforms. In a new report, the PAC warns that the current regulatory system requires substantial changes, and is not working as well as it should to support nature recovery or economic growth.

The report highlights the rising problem of illegal waste dumping, and warns that the widespread and increasing issue of illegal sites has surpassed the Environment Agency's (EA) powers. Restricted to the lengthy and expensive route of criminal prosecutions without the option of enforcing civil powers against illegal sites, the EA also has had problems with intelligence gaps on this type of criminality. It responded swiftly to illegal dumping at Kidlington in Oxfordshire once it had received “confirmed intelligence” of the problem, but local bodies had been aware for weeks before. The PAC is calling on the EA to work more effectively with other bodies such as the police and local authorities, an ability it currently lacks.

Defra, the Environment Agency and Natural England are changing the way they regulate in response to 149 recommendations from multiple independent reviews. The report finds that the large volume of change activity does not appear well-coordinated, and is sceptical that regulators have the resources and skills to manage the upcoming changes. The PAC is seeking a detailed plan from Defra showing how it intends to change the overall regulatory environment, and what assurance it has that regulators have the necessary resources.

The PAC also believes that Defra should take the opportunity presented by the changes in water regulation to explore merging the regulatory responsibilities of Natural England and the EA. This could enable the establishment of a single organisational culture which balances protection and enhancement of nature and the environment with supporting economic growth. The PAC's inquiry found that currently a lack of strategic direction from Defra limits regulators' ability to plan coherently or target resources effectively.

In particular, farms and other businesses are not being provided with enough guidance or support to help them comply with environmental regulations. Initiatives are planned that will add further complexity for the farming sector – changes to the environmental land management schemes; the publication of the 25-year vision for agriculture; the creation of a new water regulator. The PAC recommends government assess how these upcoming changes will affect how farmers need to engage with regulators, and that it ensure farmers have enough support.

The report further highlights government's Nature Restoration Fund, designed to raise funds and commission projects to improve the environment when building and infrastructure developments affect protected sites or species. The PAC has concerns around how the Fund will balance the need for development with protecting nature and biodiversity, and the PAC will be keeping a watching brief on the Fund as its implementation progresses.

Sir Geoffrey Clifton-Brown, Chair of the Public Accounts Committee, said: “The UK has obvious and glaring problems with how environmental regulation is delivered. This, tragically, is a given. The public does not need our Committee to remind it of ongoing issues with illegal waste dumping and sewage pollution of our rivers. nor do farmers need reminding of the complexity of the systems within which they are obliged to work. This is why regulators are drowning in recommendations from multiple reviews, and why we can expect a new water regulator. Our report finds that the current position that regulators are not sufficiently resourced to follow this multiplicity of recommendations, while still carrying out their responsibilities towards the environment.

“One obvious solution to reduce the complexity which government should consider would be a merging of the responsibilities of Natural England and the Environment Agency (EA). Whilst they do have slightly different roles in regulating the environment, some of their larger functions, such as monitoring the planning system and taking enforcement action significantly overlap. A single culture would be able to more coherently face outwards towards sectors that need to engage.

“It is welcome to hear the government will be attempting to arm the EA and councils with greater powers of enforcement, but without deeper co-operation with police and local authorities, illegal waste is still liable to be an out-of-control plague on our communities. The Nature Restoration Fund is also in our Committee's sights in the future, as a potentially innovative scheme but with real risks of presenting another layer of obstacles for responsible development. Our inquiry finds an overall unfocused picture for environmental regulation. The government must work to bring it into sharp focus.”

PAC report conclusions and recommendations 

We are not convinced that Defra and the regulators can fulfil their existing, wide-ranging responsibilities effectively while delivering ambitious reforms.  The regulatory system is currently not working as well as it should to support nature recovery or economic growth.  Progress towards government's environmental goals is disappointing. The regulators are in the process of making changes to the way they regulate in response to the 149 recommendations from multiple independent reviews and the creation of a new water regulator. Tackling obsolete legislation will be critical to maximise the benefits of the changes. The large volume of change activities do not so far appear to be well-coordinated and drawn together.  Defra and the regulators agree they have a challenge to transform their businesses, but Defra does not seem to fully appreciate the scale of the challenge that lies ahead. Given the regulators struggle to carry out their current roles effectively, we are not convinced they have the resources and skills to manage the upcoming changes, despite their assurances.

Recommendation 1.   Within six months of this report, Defra should publish a detailed plan which sets out how it intends to change the overall regulatory environment, how it is implementing the 149 recommendations, what assurance it has that regulators have the resources they need, and when the change will be completed. The plan should include a clear statement of what legislative change is needed and when.

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 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 2.

1. 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
2. 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.
3. 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.

Defra and the regulators are still a long way from where they need to be in modernising their IT systems and processes. In 2023, we reported that Defra and its arm's-length bodies had one of the most significant legacy IT challenges in government, with 300 high-risk legacy IT applications.  Since then, they have made some progress by, for example, replacing 200 of these legacy IT systems.  But there is still a long way to go, with Defra saying it will take another 18 months just to replace the remaining 100 applications. The Environment Agency has improved its digital systems: it has closed 350 legacy systems and modernised others, but there are still issues to address. Not all internal IT systems connect with each other, or with other IT systems across the Defra Group. In comparison to the Environment Agency, Natural England has made much less progress in improving its IT systems and received limited funding for digital transformation in recent years. Defra received £300 million in the 2025 Spending Review for its ongoing digital transformation efforts. We are encouraged by Defra and the regulators' reduced reliance on contingent labour for digital expertise, but digital skills remain one of the key capability gaps across the organisations. 

Recommendation 3.

1. a) Environment Agency and Natural England should ensure they have sufficient digital and technology skills at their executive level, for example by appointing a Chief Digital Officer or Chief Technology Officer.
2. b) Defra should ensure that its regulators are receiving the investment in digital they need to modernise.

Waste regulation as currently set up is not effective enough at stopping waste crime or non-compliance. Regulation of the waste sector is not adequately addressing the rising problem of illegal waste dumping. We are encouraged by the Environment Agency's recent enforcement action at a permitted landfill site where there was large-scale pollution.  However, the widespread and increasing issue of illegal waste sites surpasses the Environment Agency's powers. The Agency lacks the option of enforcing civil powers against illegal sites and is restricted to the lengthier and more expensive route of criminal prosecutions. The Agency may have responded quickly once it got 'confirmed intelligence'  about illegal dumping at Kidlington in Oxfordshire, but local bodies had been aware of the problem for weeks before that. However, this incident illustrates the gaps in its intelligence on this type of criminality and highlights how it lacks the ability to collaborate effectively with other bodies such as the police and local authorities.

Recommendation 4.

1. a) Defra should set up closer co-operation and sharing of intelligence between the Environment Agency, Local Authorities, the police and other agencies on illegal waste dumping risks.
2. b) Defra should examine the potential for technology to improve response times when illegal activity occurs that affects the environment.

Defra and the regulators are not doing enough to provide guidance and support to help farms and other businesses comply. Most businesses want to comply with environmental regulations, but farmers and other businesses need more assistance than they currently get from the regulators so that it is as easy as possible to do so. The regulators have started making changes to address this and improve their guidance. This includes adding real-life case studies so that businesses better understand how regulations should operate, and using digital communications such as automated chat messaging to help direct businesses towards the relevant online guidance more quickly. However, Defra is planning initiatives that will add further complexity for the farming sector, including changes to the environmental land management schemes and publishing its 25-year vision for agriculture.  The launch of the new water regulator will also create additional burdens and regulatory touchpoints for farmers.

Recommendation 5.   Defra should assess how upcoming changes will affect the way farmers need to engage with regulators.  This should include the impact of the new water regulator, updates to Environmental Land Management schemes, and the upcoming farming roadmap. Defra should report to us within six months on how disruptions will be minimised and the progress made on:

- Understanding the implications of the new water regulator;

- Understanding the impact of changes to farming policy and how it will allow farmers sufficient time for transition; and

- Ensuring that farmers are sufficiently supported.

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.

Recommendation 6.

1. 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 implementation of the Nature Restoration Fund.