Government falling short on environmental targets while regulator grapple with constraints of regulatory and legislative framework, spending watchdog warns

In a report on the effectiveness of Defra's largest regulators - the Environment Agency (EA) and Natural England (NE) - the NAO said that only three out of 10 goals in the Government’s Environmental Improvement Plan have “largely improved” in recent years.

The report noted that only nine out of 43 of the Government's environmental targets and commitments are "likely" to be achieved.

However, Defra, the EA, and NE are working to improve the efficiency and effectiveness with which they regulate, the report added.

As part of this, Defra has planned £300m worth of investment over the next three years to modernise its digital infrastructure.

The NAO said Defra faces one of the "most significant legacy IT challenges" in government, and that it has been slow to modernise its systems.

NE has meanwhile "received limited funding" for digital transformation of its core regulatory services in recent years, which has "hampered" regulatory delivery and reduced efficiencies for the regulators, the report said.

Elsewhere, the report described Defra's approach to environmental regulation as largely "reactive, rather than based on a clear strategy and evidence of what is needed".

It also criticised the "lack of clear strategic approach", which has led to Defra being slow to act when the regulators suggest regulatory changes or system improvements that would produce better outcomes or cut costs.

It said: "For example, the regulators have suggested specific regulatory reforms or expansions, digital portals and improved guidance. Consultations and commitments by Defra to implement reforms have not always resulted in timely, substantial actions to address the issues raised."

The NAO said the ability of the EA and NE to regulate in a "consistent and well-targeted way has been constrained" by limitations in their IT systems and how they collect and use data, and challenges addressing skills shortages, allocation of limited resources and a culture of risk aversion.

It added: "They have also faced limitations of the regulatory and legislative framework they operate within, and Defra has not done enough to support a strategic, joined-up approach rather than reacting to short-term, high-profile issues."

However, it noted that regulators have increased their focus on how they regulate in the past two years, and "the government’s response to recent major reviews has added impetus for reform".

The report said that Defra and the regulators have "made a good start" to reforms, but that success will depend on taking a focused and integrated approach to the changes needed, proper consideration of the skills and capacity required, and speeding up progress with replacing outdated IT systems and embracing digital technologies.

Responding to the report, a Defra spokesperson said: “As this report recognises, we are making sweeping changes with our arms-length bodies to streamline regulation, drive growth and better protect nature, including new strategic plans for the Environment Agency and Natural England, focused on delivering these outcomes.

“We are piloting appointing single regulators for major infrastructure projects, like the Lower Thames Crossing and Falmouth Docks and a new Board focused on driving through key projects."

Natural England Chief Executive, Marian Spain, meanwhile said: “This report shows our level of ambition for reform is right. In our new corporate strategy, we set out how Natural England will drive nature recovery that supports economic growth, enabling housebuilding and infrastructure development.

“We have an ambitious regulatory reform programme underway and look forward to working with government, other regulators and stakeholders on further improvements to deliver more for people and nature.”

Environment Agency Chief Executive Philip Duffy added: "We welcome the National Audit Office's recognition that reform is underway. We are transforming how we regulate to support the government's growth mission, focusing on results rather than process to get development moving whilst protecting the environment we all depend on. 

"We are making excellent progress across all our Regulation Action Plan commitments and supporting economic resilience through our EA2030 strategy." 

Adam Carey