Written evidence submitted by Natural England (CSS0001)
 

Executive Summary

• Natural England is the Government’s statutory adviser on the natural environment.  As part of our remit, we deliver agri-environment schemes on Defra’s behalf.
• Agri-environment schemes offer payments to farmers and other land managers in England for undertaking land management practices to protect and enhance the environment and wildlife.
• Building on 30 years of agri-environment schemes, the current Countryside Stewardship scheme, introduced in 2015, supports long term, multi-annual agreements with farmers and land managers. Higher Tier agreements in particular require extensive negotiation and adviser input to secure business change and long term environmental outcomes.
• Countryside Stewardship is a more targeted scheme than its predecessors to maximise the environmental outcomes from the public (UK and EU) funds invested.  EU scheme rules now require a tightened control framework, which requires evidence collection and submission by farmers in support of their claims for payment.  The EU has also required a single annual start date to mitigate a control risk, which means that we have moved from rolling start dates under Environmental Stewardship to a compressed operational window.
• Countryside Stewardship shares the same IT platform as the Rural Payments Agency’s Basic Payment Scheme and data is stored on one system to reduce disallowance risk. Natural England works very closely with Defra, the Rural Payments Agency, the Forestry Commission (for the technical woodland aspects of Countryside Stewardship) to continuously improve the offer to customers (farmers and land managers) and the natural environment.
• The scheme design is fit-for-purpose but its implementation has been affected by the increased compliance requirements set by the EU and delays in delivering full IT functionality.  As a result, the customer experience has not been as good as before.  The scheme has been continuously improved in response to customer and industry feedback since it was launched in 2015.

1. Introduction

1.1   Natural England is the Government’s statutory adviser on the natural environment established under the Natural Environment and Rural Communities Act 2006. Natural England’s purpose is to ensure that the natural environment is conserved, enhanced and managed for the benefit of present and future generations thereby contributing to sustainable development. We implement this through a wide range of activities including the gathering of evidence and analysis, the provision of advice to policy-makers and decision-makers, regulatory functions including designations, consents and licences, and the delivery of agri-environment schemes.  This broad mix of levers operated in an integrated way by a single body at a local level provides significant operational efficiencies and synergies.  Among Natural England’s various powers and duties are provisions to enter into management agreements with those responsible for land in order to support our statutory purpose in the delivery of environmental outcomes. 

1.2   Under the Act, the natural environment is considered to encompass not only biodiversity but the related disciplines of geodiversity and landscape conservation, and the study, understanding and enjoyment thereof, including through access and open-air recreation.  The policy connections and dependencies between the natural environment and wider social and economic objectives (the role of natural capital, the ‘nature prescriptions’ health agenda, the local economic benefits of environmental investment, the role of the environment in enabling climate change mitigation and adaptation, and so on) are now widely understood. 

1.3   Agri-environment schemes (Countryside Stewardship, Environmental Stewardship and other schemes) offer payments to farmers and other land managers in England for undertaking land management practices, beyond minimal regulatory compliance, to protect and enhance the environment and wildlife.  These schemes form part of the domestic implementation of Pillar 2 of the EU Common Agricultural Policy under the Rural Development Programme for England (RDPE).  RDPE measures underpin 60% by area of England’s terrestrial SSSIs and 67% by area of priority biodiversity action plan habitat.

1.4   The Government is planning to invest £3 billion through the schemes in the current programme.  Environmental Stewardship and other legacy agreements entered into under the previous 2007-13 programme are expected to require £2.1 billion.  Entering into multi annual agreements with farmers and landowners builds an ongoing financial commitment year on year.  The remaining £900 million was allocated for new agreements under the 2014-20 programme.  Countryside Stewardship is a competitive scheme open to all eligible farmers, woodland owners, foresters and other land managers.  It is applicable to many types of land use (for example conventional and organic farmland, coastal areas, uplands and woodlands).  There are three main elements to the scheme: long-term Mid Tier and Higher Tier; and one-off Capital grants (such as the new Hedgerow and Boundary and Woodland Creation grants).

1.5   Agri-environment scheme agreements are targeted, competitive, multi annual (5-10 year), voluntary, and often require negotiation and adviser input.

2. Countryside Stewardship Development

2.1   The forerunner to Countryside Stewardship, Environmental Stewardship, achieved widespread uptake, particularly through the open-to-all Entry Level Stewardship.  However, evaluations of previous schemes showed the importance of effective targeting and prioritisation for the achievement of environmental outcomes.   Countryside Stewardship was designed to be better targeted with a lower – though still wide - geographical coverage and to deliver better value for money in delivering the government’s priorities of biodiversity, water quality and flood protection. A national targeting framework set out the environmental priorities in a particular area based on Natural Character Areas. These help potential applicants, their agents and local partners and stakeholders to see clearly what features are likely to make the most valuable environmental contribution in that area and therefore more readily lead to a successful application.

2.2   The design of Countryside Stewardship also recognised EU requirements to tighten the control framework and increase evidence requirements.  Requirements such as cross checking, common start dates and the need to process a new form every year are requirements of (EU) Regulation 1306/2013 and 14(1) of Commission Regulation 809/2014 which the UK Government opposed at the time.  The scheme design also included an original expectation that most transactions would be done on-line (digital by default) through the development of a common shared IT platform as part of the CAP Delivery Programme.  As a result, Countryside Stewardship was designed to use the same IT systems used for Pillar 1 (Basic Payment Scheme) for both agreements and payments. This was to enable greater efficiency of delivery, costs savings and decrease the overall risks of disallowance; with common underpinning management systems and processing procedures leading to avoidance of risks.

2.3   A number of the IT requirements for Countryside Stewardship set out at the beginning of the programme had to be taken out of the CAP Delivery Programme.  The loss of this capability meant customers were unable to view Countryside Stewardship land parcels on land options on-line.   The original design would have delivered automatic parcel level targeting and option prompts. Unlike BPS, Countryside Stewardship applications are not able to be submitted on line. We are reliant on legacy systems to produce an application map and continue to use paper application forms.  The introduction of a single start date for multi-annual agreements to mitigate a control risk identified by the European Commission means that Natural England have a compressed window to deliver its operational requirements.

2.4   Countryside Stewardship Scheme and the Environmental Stewardship Scheme are different in approach and design so it is therefore difficult to make direct comparisons between them.

2.5   Natural England, the Forestry Commission and Rural Payments Agency have worked with stakeholders to develop and improve Countryside Stewardship through the Agri-Environment Stakeholder Group, the Applicants Focus Group and the Technical Stakeholder Group.  These groups have been essential in helping the Defra group to make improvements which reflect stakeholder and customer views about the application process and the guidance and shape our advice to help farmers, other land managers and their agents.

3. Natural England and Rural Payments Agency Joint Working

3.1   Natural England works closely with the Rural Payments Agency who are the accredited Paying Agency for the Rural Development Programme in England.  The Agency operates the control framework for Pillar 2 schemes, such as Countryside Stewardship. The Agency is responsible for making eligible payments and accounting for them whilst Natural England is responsible for processing the claims and authorising them on the Agency‘s behalf. The relationship and control measures between Rural Payments Agency and Natural England and the Forestry Commission are underpinned by a Service Level Agreement. This establishes responsibilities, governance, service times and accountabilities.  Governance includes the Rural Payments Executive Group, the Defra-led Countryside Stewardship Operational Group and the RDPE Programme Board.

3.2   Natural England and the Forestry Commission have worked closely with Defra and the Rural Payments Agency in the CAP-D programme since its inception to develop the IT and have been well represented on the key programme governance fora.  There have been extensive staff secondments and considerable joint working initiatives to deliver the intended outcomes of the programme as well as to address the day-to-day development and delivery issues arising from programme implementation.

3.3   Natural England also works closely with Rural Payments Agency, the Forestry Commission and Defra to join up our messages to the industry, which is detailed further in the following section for information.

4. Communications with the industry and farmers

4.1   Natural England and the Forestry Commission have established a range of routes to speak to and inform stakeholders, customers (farmers and landowners) and industry bodies.

4.2   For stakeholders and industry bodies, Natural England provides regular updates through the Agri-Environment Stakeholder Group and the Applicants Focus Group.  These groups have been essential in helping us listen to stakeholder and customer views.

4.3   We use .gov.uk to communicate Countryside Stewardship developments such as the opening of the Mid Tier and Higher Tier application windows and to hold all the scheme documentation such as scheme guidance and how to apply.    We also use the media to provide updates and information through the farming press (including Farmers Guardian, Farmers Weekly and NFU online).   We share news releases on .gov.uk and through social media.  There is a dedicated Rural Payments helpline number to route customers to either Natural England for Countryside Stewardship enquiries or to Rural Payments Agency for questions about the Basic Payments Scheme.

4.4   An essential part of our engagement with farmers and landowners is the relationship and contact provided through our technically skilled and trusted local Area Team advisers.

5. Scheme take up and delivery

5.1   Natural England is currently making the first round of advance payments under the new Countryside Stewardship scheme. 

6. Implementing Countryside Stewardship

6.1   Countryside Stewardship relies on the same IT systems used by the Rural Payments Agency for Pillar 1 delivery and payments.   There is a total reliance on the Land Management System which holds all of the land use and mapping data and provides the common platform for land parcel data, in terms of parcel size, land use, land cover and basic eligibility.  The IT development for 2016/17 necessarily prioritised the delivery of Basic Payment Scheme functionality to support 2016 Basic Payment Scheme claims processing ahead of that for Countryside Stewardship.  Basic Payment Scheme payments cover around £2 billion to 86,000 claimants. After May 2016 the priority shifted towards delivering the remaining Countryside Stewardship functionality.  This means that it has taken a year longer to provide the IT for Countryside Stewardship than it has for the Basic Payments Scheme.

6.2   Countryside Stewardship payment and agreement offers have taken longer than expected because:

• The change to a single agreement start date has removed the flexibility we previously had to spread agreement processing and payment work evenly throughout the year.
• We provided a long application window to encourage scheme take up but this year 50% of applications came in the last 2 weeks generating an unprecedented peak of work.
• The evidence submitted by customers in support of their claims and agreement applications was insufficient leading to delays as customers had to be contacted.
• This is the first year that Countryside Stewardship payments have been made and the functionality was delivered just in time.   It has taken time for testing, producing guidance and for staff to become familiar with the new service and to iron out any problems.

6.3   In response, we prioritised payments and top priority was given to processing legacy Environmental Stewardship advance payments for 36,000 customers expecting £140 million. Our next priority was Countryside Stewardship advance payments (circa 1,875 customers and £6 million), with the final priority being the issuing of new CS agreements (c: 4,200 agreements).   Prioritising the delivery of Countryside Stewardship payments and agreements until later affected our ability to handle issues arising in the very short timescales that were then required.  The frequency of opportunities to fix defects in the Siti Agri processing software decreased towards the end of the programme.  Compared to 2015 this meant greatly reduced opportunities to provide timely solutions to IT related issues.

6.4   The tightened control framework requires evidence collection and submission by farmers in support of their claims and agreements offers. These new requirements have led to a high rate of incomplete applications and evidence, extensive discussions with customers and delays. Some of these were unforeseen as a result of cross check activity (e.g. requests for additional information on livestock records).  Given the additional evidence and control requirements, Countryside Stewardship claims are more complex to process than Environmental Stewardship claims.

7. Scheme Improvements

7.1   Since launching CS in 2015, we have continuously improved the scheme in response to customer and industry feedback.  There is a plan in pace to ensure the processes work better in 2017 and 2018

7.2   Improved outcomes have included:

• Options to support policy on flood attenuation.
• Changing the eligibility criteria for enclosed rough grazing for birds, increasing the area eligible to make this option more accessible to our upland customers.  Reduced limits on restocking after tree health problems.  Giving our advisers the discretion to decide when a Higher Tier Baseline Evaluation is needed where existing and relevant baseline information is available.

7.3   Improved support for farmers and agents has included:

• In response to customer feedback after year one, we revised the CS guidance in collaboration with industry bodies to ensure it is as clear and  farmer-friendly as possible and published a complete version as a pdf – split between High and Mid Tier – easy to print out.
• We introduced an online options selection tool to help farmers select options that we will deliver high scoring applications, in order to make applying for a Mid Tier agreement much easier.
• Customers now have the ability to submit Hedgerow and Boundary Grant and Woodland Management Plan applications online and we will be launching the ability for customers to submit their multi-annual claims and capital claims online in early April.
• Area teams assessed Higher Level Stewardship expiries to identify which ones need the additional support that Higher Tier offers and which ones can achieve their outcomes through the more flexible Mid Tier.  Where possible conversations have already started with customers to help them understand what the scheme can do for them.   This means that we can focus our Area Team resources on where we will achieve the most for the environment.
• We will improve the support to customers through the farm advice contract this year with advisory meetings on Mid Tier being augmented by one-to-one application form checking.
• We are also working with facilitators and partners to support our Mid Tier customers and generate applications that support the priority environmental outcomes in an area. We already have some good case studies including around the wild bird and pollinator packages.
• Natural England has made YouTube videos to support our online work and will be releasing videos to demonstrate evidence requirements and help farmers meet them.

8. Programme for 2018 and beyond

8.1   As well as continuing to make improvements in processes and options, Natural England is changing its approach in line with its Conservation Strategy.  Central to this is the shift to working more at a landscape scale.  Partnerships such as the Cranbourne Chase Cluster (now Martin Down partnership) and work to reduce flooding in Cumbria and longer term management plans can be supported now through Countryside Stewardship.

8.2   We are also piloting a Payment by Results approach to provide a direct link between outcomes in the field and reward for the farmer. The pilot project is co-funded by the EU and will run until December 2018 and arises from concern about the environmental and cost-effectiveness of prescription-based, fixed payment schemes and a ‘one-size fits all’ approach.  The pilot is running in two areas: Wensleydale (where we’re working in partnership with the Yorkshire Dales National Park Authority) and East Anglia.   In both areas, Natural England’s Area Team advisers are providing advice to 35 farmers who are signed up to delivering species rich hay meadow (35ha), breeding wader habitat (153ha), winter bird food (25ha) and pollen & nectar mix (17ha).

9. Monitoring the outcome of Countryside Stewardship

9.1   Both Environmental Stewardship and Countryside Stewardship are assessed through a planned national programme of monitoring and evaluation.  Natural England designed this programme working closely with Defra, the Forestry Commission, the Environment Agency and Historic England.  This is delivered by external contractors.

9.2   Natural England has three major projects for 2016/17 and beyond which include:

• Assessing the cumulative impacts of farmers’ agreements on biodiversity at a landscape scale.
• Monitoring a sample of Countryside Stewardship agreements to establish a baseline environmental assessment
• Planning an evaluation of the implementation of Countryside Stewardship to assess the attitudes and responses of applicants, the effectiveness, accessibility and provision of scheme guidance, option selection/uptake and general scheme uptake. 

March 2017