Corporate report

Defra's Main Estimate 2024 to 2025 memorandum

Published 17 July 2024

1    Overview

The purpose of this memorandum is to provide an overview and analysis of the Resource, Capital and cash sought in the 2024-25 Main Estimate and to demonstrate consistency with the plans approved in the 2021 Spending Review (SR21). It also sets out changes from the 2023-24 Supplementary Estimate (2023-24 final budget) and provides background information.

This memorandum has been prepared with reference to guidance provided by the House of Commons Scrutiny Unit. The information in this memorandum has been approved by Tamara Finkelstein, Accounting Officer and Permanent Secretary of the Department for Environment, Food and Rural Affairs (Defra).

1.1  Priority Outcomes

Defra’s Priority Outcomes, as set out in the SR21 ^{[footnote 1]}, are as follows:

• improve the environment through cleaner air and water, minimised waste, and thriving plants and terrestrial and marine wildlife ^{[footnote 2]}
• reduce greenhouse gas emissions and increase carbon storage in the agricultural, waste, peat and tree planting sectors to help deliver net zero ^{[footnote 3]}
• reduce the likelihood and impact of flooding and coastal erosion on people, businesses, communities and the environment
• increase the sustainability, productivity and resilience of the agriculture, fishing, food and drink sectors, enhance biosecurity at the border and raise animal welfare standards

Defra’s spending is designed to support its outcomes. Tables and graphs in this memorandum break Defra’s spend down by Estimate subhead. These are aligned to the table at Part II of the Main Estimate and represent Defra’s main spending programmes.  Details of which spending programmes relate to which outcomes are given in Section 3.1.

1.2  Spending controls

Defra’s spending is broken down into five spending totals, for which Parliament’s approval is sought.

The information below sets out the key budgeted activities covered by each spending total supported by provision in this Estimate. The budgets support delivery of the Department’s Priority Outcomes. They reflect the settlements agreed for Defra as part of SR21, plus further changes announced in subsequent fiscal events.

The spending totals which Parliament votes are:

The Resource Departmental Expenditure Limit (Resource DEL) includes the Administration budget for running core Defra and its delivery bodies and the Programme budget for spend on responsibilities including Farm Support; Waste; Animal Disease, Health and Welfare; Natural Environment; and Flood and Coastal Risk Management. Included within Resource DEL budgets are ring-fenced budgets for depreciation and specific policy activities. These ring-fences are detailed in section 2.3.

The Capital Departmental Expenditure Limit (Capital DEL) mainly includes the budget relating to Flood and Coastal Risk Management. It also includes funding to support Science Capability in Animal Health and the Critical Works programme at Weybridge; Farm Support payments; the Nature for Climate Fund; and Official Development Assistance (ODA) funding, all of which are ring-fenced. The remainder of the Capital DEL budget has been allocated in accordance with the Department’s prioritisation of capital projects.

Resource Annually Managed Expenditure (Resource AME) is all classified as Programme and includes movements on provisions, including for Common Agricultural Policy (CAP) disallowance, the commitment to pay area-based direct payments to farmers linked to 2023 claims and the Environment Agency pension schemes. Budget is also included here for Flood Re and Levy Funded Bodies (the Agriculture and Horticulture Development Board and the Sea Fish Industry Authority), net of levy income and their other income streams.

Capital Annually Managed Expenditure (Capital AME) covers the capital costs of the Levy Funded Bodies and Flood Re, and the budget for dilapidation provisions capitalised as part of the right-of-use asset under International Financial Reporting Standard 16 Leases (IFRS16). This accounting standard states how leases should be presented, recognised, measured and disclosed in the annual accounts.

Non-Budget previously provided budget cover for Rural Development programmes administered by the Devolved Administrations. These payments made by the Devolved Administrations were funded by the Rural Payments Agency (RPA) and subsequently recovered by RPA from the European Commission (EC), in their role as the UK Funding Body. A small budget was held by RPA to cover exchange rate differences that may have arisen due to the timing differences between the claim date and the date of actual reimbursement by the EC. Funding activity has ceased, and we are now awaiting closure of the Rural Development programmes. No more income or expenditure is expected beyond the small expenditure budget held to cover foreign exchange and any write-offs relating to the settlement of the funding relationship.

In addition, Parliament votes a net cash requirement, designed to cover the elements of the above budgets which require Defra to pay out cash in year.

Main Estimates are presented to Parliament by HM Treasury in order to seek Parliament’s authority for departmental spending plans. They are usually presented in April/May each year. Departments should seek a Supplementary Estimate in order to change voted spending provision, reallocate spending provision between budgetary limits or amend the Ambit. Supplementary Estimates are usually presented to Parliament by HM Treasury in January/February each year.

1.3  Main areas of spending

The graphic below shows the main components of Defra’s proposed budget for 2024-25 included in this Main Estimate, and the proportions of funds spent on its main activities.

Graph 1 2024-25 Resource DEL total budget £4,633 million

Area of spending	£ million
Food and farming	2,039
Improve the environment and rural services	1,164
Flood protection	454
Animal, fish and plant health	437
Departmental operating costs	539

Food and farming includes £1.74 billion for Farm Support payments.

Departmental operating costs includes HR, IT, estates, communications and finance functions from the largest delivery bodies, including associated depreciation. These have been brought into the core Department and have formed group-wide functions, which enables better prioritisation, decision-making, professionalism and efficiency. Many of these costs directly support the front-line work in the main operating areas.

Graph 2 2024-25 Capital DEL: total budget £2,759 million

Area of spending	£ million
Food and farming	690
Improve the environment and rural services	474
Flood protection	945
Animal and plant health	134
Departmental operating costs	516

1.4  Comparison of spending totals sought

The table and graphic below show how the totals sought for Defra in its Main Estimate compare with last year:

	Spending total Amounts sought this year            (Main Estimate 2024-25) (£m)	Difference (+/-) compared to final 2023-24 budget (£m)	Difference (+/-) compared to final 2023-24 budget (%)	Difference (+/-) compared to original 2023-24 budget (£m)	Difference (+/-) compared to original 2023-24 budget (%)
Resource DEL	4,632.9	-748.7	-13.9	-157.2	-3.3
Capital DEL	2,759.4	646.8	30.6	-63.7	-2.3
Resource AME	-523.5	-2,271.0	-130.0	-3,188.6	-119.6
Capital AME	56.7	25.3	80.6	-53.7	-48.6

Graph 3 Defra budgets £ million

1.5  Key drivers of spending changes since last year

The Resource DEL budget has decreased by £748.7 million since the 2023-24 Supplementary Estimate. The main causes of the changes in Resource DEL are explained in more detail below:

Decrease of £387.8 million due to a reclassification of budget from Capital DEL to Resource DEL. £80.0m processed in the 2023-24 Main Estimate and £307.8m that was processed in the 2023-24 Supplementary Estimate. This means that the 2024-25 Resource DEL budget is comparatively lower. This budget reclassification was mainly within the Environment Agency to better align the budgeting treatment of project expenditure with accounting standards, and for digital programmes to recognise spending in this sector has changed. Reclassifications for 2024-25 will be considered as part of the Supplementary Estimate.

Decrease of £217.0 million due to additional depreciation budget that was allocated to the Environment Agency in the 2023-24 Supplementary Estimate due to a change in the way operational assets are valued. This means that the 2024-25 budget is comparatively lower.

Decrease of £200.0 million due to a credit budget held in the centre in anticipation of receiving funding in the 2024-25 Supplementary Estimate for the Farm Support budget that was reprofiled from the 2023-24 Capital DEL budget. This was reprofiled to enable funding rollout of environmental land management schemes at the levels of take-up and ambition that are required to deliver government’s statutory carbon and environment targets.

Increase in budget of £80.2 million for the Collection and Packaging Reforms programme, mainly for grants to Local Authorities for Simpler Recycling, which aims to make recycling consistent across the UK.

£68.5 million decrease in budget due to claims on the Reserve processed in the 2023-24 Supplementary Estimate. These related to: - £35.0 million to cover the costs of Avian Influenza, including culling, disposal and compensation - £23.0 million for the Biosecurity, Borders and Trade Programme which was delayed until 2023-24 following a Prime Ministerial decision - £10.5 million other smaller reserve claims

This means that the 2024-25 budget is comparatively lower.

£33.0 million increase in the ring-fenced Official Development Assistance (ODA) budget as per the profile given in SR21. Within the overall ODA allocation, Defra is expected to prioritise meeting government commitments and ministerial announcements made previously, including spending on the Blue Planet and Biodiverse Landscapes Funds, the Darwin Initiative, and the Illegal Wildlife Trade Challenge Fund.

Decrease in budget of £33.0 million for the UK Seafood Fund. This fund ends in 2024-25 and more budget has been allocated to Capital DEL rather than Resource DEL this year.

Other net increases of £44.4 million across various programmes.

The Capital DEL budget has increased by £646.8 million since the 2023-24 Supplementary Estimate. The main causes of the changes in Capital DEL are explained in more detail below:

Increase of £341.8 million in the Flood and Coastal Risk Management budget. This partially relates to a reclassification of budget from Capital DEL to Resource DEL, £80.0 million processed in the 2023-24 Main Estimate and £126.0 million processed in the 2023-24 Supplementary Estimate. This means that the 2024-25 Capital DEL budget is comparatively higher. This budget reclassification, within the Environment Agency, was to better align the budgeting treatment of project expenditure with accounting standards. Reclassifications for 2024-25 will be considered as part of the Supplementary Estimate. In addition to this, £100 million was returned to HM Treasury in 2023-24 due to the reprofiling of programme of spend for the Flood and Coastal Risk Management budget, meaning costs will fall into different years than originally planned.

Increase of £339.0 million in the ring-fenced farming budget, mainly due to £200 million reprofiled from the 2023-24 Capital DEL budget into the 2024-25 Resource DEL budget, and £48 million reprofiled from the 2023-24 Capital DEL budget into the 2024-25 Capital DEL budget using HM Treasury’s Budget Exchange.

The £200 million was reprofiled to enable funding rollout of environmental land management schemes at the levels of take-up and ambition that are required to deliver government’s statutory carbon and environment targets.

The Budget Exchange included budget for Countryside Stewardship, which is dependent on claimants’ behaviour, with agreement holders being able to claim at any point across the first three years and three months of the agreement; and the Farming Investment Fund, which has seen some evidence of slow uptake for infrastructure grants, though budget is planned in 2024-25 in order to deliver programme outcomes.

Decrease of £255.0 million due to the Collection and Packaging Reforms programme, mainly due to some one-off capital grants paid to Local Authorities in 2023-24 for Simpler Recycling.

£181.8 million increase due to a reclassification of budget from Capital DEL to Resource DEL that was processed in the 2023-24 Supplementary Estimate. This means that the 2024-25 Capital DEL budget is comparatively higher. This budget reclassification was mainly to better align the budgeting treatment of project expenditure with accounting standards within the Environment Agency, and for digital programmes to recognise spending in this sector has changed. Reclassifications for 2024-25 will be considered as part of the Supplementary Estimate.

Increase of £33.2 million due to transferring budget into 2024-25 from 2023-24 using HM Treasury’s Budget Exchange to reprofile budget for the Biosecurity, Borders and Trade Programme following the Prime Minister’s decision in April 2022 to postpone implementation of the new borders checks regime.

£24.2 million increase due to transferring budget into 2024-25 from 2023-24 using HM Treasury’s Budget Exchange due to an underspend in 2023-24 which was driven by the planned schedule of the Science Capability in Animal Health and the Critical Works programme at Weybridge which was set after the SR profile was fixed. The funding has been realigned with planned activities, and there has been a release of unused optimum bias from the original business case and an amendment in the payment schedule to accurately reflect UK power networks national grid milestones for the work on power infrastructure.

Increase of £23.4 million in the ring-fenced ODA budget as per the profile given in SR21. Within the overall ODA allocation, Defra is expected to prioritise meeting government commitments and ministerial announcements made previously, including spending on the Blue Planet and Biodiverse Landscapes Funds, the Darwin Initiative, and the Illegal Wildlife Trade Challenge Fund.

Other net decreases of £41.6 million across various programmes.

The Resource AME budget has decreased by £2,271.0 million since the 2023-24 Supplementary Estimate. The main causes of the changes in Resource AME are explained in more detail below:

Decrease of £2,450.0 million due to the commitment to pay area-based direct payments for farmers linked to 2023 claims. These payments are being phased out from 2021 to 2028 and replaced by new schemes to support sectoral productivity, resilience, and environmental performance. The government has committed that from 2024 the residual direct payments due to farmers will be “delinked” from land area. Farmers will receive the delinked payment annually by virtue of having claimed in 2023 and will not need to submit further applications or evidence. The 2023-24 Supplementary Estimate therefore included budget cover of £1,626.0 million for these payments to 2027-28 to recognise the commitment to make these future payments to farmers. This Main Estimate includes a credit value of £824.0 million to reduce the liability as payments are due to be made from the Resource DEL budget.

Increase of £136.0 million relates to the Metal Mines and Foot and Mouth Disease Burial Site provisions. In the 2023-24 Supplementary Estimate, the budget for these provisions was reduced by £136.0 million due to changes in the discount rate. This means that the 2024-25 budget is comparatively higher. Discount rates are provided by HM Treasury in December each year. In December 2023 there was an increase in the discount rate: an increase in the discount rate results in a decrease in the value of a provision for future years. This led to a large reduction as these provisions are due to last for approximately 100 years. Any effect of the discount rate for 2024-25 will be calculated as part of the Supplementary Estimate.

Other net increases of £43.0 million, mainly for expected movements in other provisions held by the Department.

The Capital AME budget has increased by £25.3 million since the 2023-24 Supplementary Estimate. This mainly relates to a decrease to the IFRS16 budget that was processed in the 2023-24 Supplementary Estimate to bring figures agreed as part of SR21 in to line with the latest information. This means that the 2024-25 budget is comparatively higher. Any adjustments for 2024-25 will be assessed as part of the 2024-25 Supplementary Estimate.

1.6  New policies and programmes; Ambit changes

There have been some minor wording changes to the Ambit in this Main Estimate that do not substantially change anything.

1.7  Spending trends

The chart below shows overall spending trends for the last five years and plans for two years, as set out in SR21, and presented in Estimates for 2024-25.

Graph 4 Spending trends, £ million

The increases in Resource DEL from 2018-19 include additional expenditure for European Union (EU) exit work funded from the Reserve. The increase in 2020-21 reflects the additional budget received for direct payments to farmers following the UK’s planned departure from the EU. This activity was previously funded by the EU rather than the Exchequer. The increase in 2020-21 also included additional budget given to the Department to support its response to the Covid-19 pandemic. The budgets for future years reflect those agreed at SR21, which gave the Department a three-year spending settlement and provided more certainty to plan for the delivery of our ambitious outcomes, including a commitment to make savings and efficiencies across the Defra group. 2023-24 includes budget increases processed in the 2023-24 Supplementary Estimate, mainly due to budget reclassifications from Capital DEL to Resource DEL and an increase in the depreciation budget for the Environment Agency, as explained in section 1.5.

SR21 included an uplift for inflationary pressures and expected pay increases. No further budget was made available for the increase in inflationary levels meaning the Department had to manage these additional budgetary pressures internally.

This commitment to make savings is expected to be achieved primarily through efficiencies across corporate service areas, including across the Defra IT and property estate. There is also an expectation that external income generation will contribute to savings and efficiencies.

The Capital DEL budget shows an overall increase across the period. This reflects increased investment in IT and property; additional funding for EU exit to provide for additional infrastructure and systems, including IT development, to support new border controls; and additional funding for Flood and Coastal Risk Management. The increases from 2021-22 also include additional budget for capital payments to farmers; Science Capability in Animal Health and the Critical Works programme at Weybridge; flood and coastal defence programmes; biodiversity; and the Nature for Climate Fund.

Resource AME budgets vary greatly over the years due to the volatility of provisions valuations. The large value in 2019-20 mainly reflects increases in the valuation of the Metal Mines and Foot and Mouth Disease Burial Sites provisions due to a change in the discount rate; and an increase in the Common Agricultural Policy disallowance provision relating to Basic Payment Scheme years 2017, 2018 and 2019. The large increase in 2023-24 mainly relates to the commitment to pay area-based direct payments for farmers linked to that year’s claims, as explained in section 1.5.

Capital AME has remained fairly constant across the period.

1.8  Administration costs

	Spending total Amounts sought this year         (Main Estimate 2024-25) (£m)	Difference (+/-) compared to final 2023-24 budget (£m)	Difference (+/-) compared to final 2023-24 budget (%)	Difference (+/-) compared to original 2023-24 budget (£m)	Difference (+/-) compared to original 2023-24 budget (%)
Administration costs	961.9	-123.0	-11.3	-42.1	-4.2

Administration budgets show a small decrease from the 2023-24 Supplementary Estimate. This is partially due to the element of the reclassification from Capital DEL to Resource DEL for digital programmes that affected the administration budget, and the administration element of the claim on the Reserve for the Biosecurity, Borders and Trade Programme that were processed in the 2023-24 Supplementary Estimate. In addition, there have been other small decreases and efficiencies across a number of programmes.

1.9  Funding: spending review and budgets

The levels of Resource and Capital DEL funding for Defra for 2024-25 are based on plans published in SR21. Since that time, the main changes to the Department’s budgets, as reflected in this Main Estimate, are set out in Annex B.

2    Spending detail

2.1  Explanations of changes in spending

Resource DEL

The table below shows how Defra’s spending plans for Resource DEL compare with last year. 

Description and subheads	2024-25 Main Estimate budget sought  (£m)	2023-24 Supplementary Estimate approved (£m)	Change from Supplementary Estimate (£m)	Change from Supplementary Estimate (%)
Food and farming - A	2,038.5	1,944.7	93.8	4.8
Improve the environment and rural services – B,G	1,164.4	1,236.4	-72.0	-5.8
Flood protection – C,H	454.0	806.9	-352.9	-43.7 (see note 1)
Animal, fish and plant health – D,E,I	437.3	607.3	-170.0	-28.0 (see note 2)
Departmental operating costs - F	538.7	786.3	-247.6	-31.5 (see note 3)
Total	4,632.9	5,381.6	-748.7	-13.9

Variations between the current and past budget are given below:

• where the variation is greater than both 10% and £10 million
• where the variation is greater than both 5% and £200 million
• any other variation whereby an explanation is necessary that is significant new spending programmes or unusual one-off spending items

Further detail of spending within these totals is given in the Table at Annex A.

1. Flood protection

Resource DEL spending under this subhead is forecast to decrease by £352.9 million or 43.7% since the 2023-24 Supplementary Estimate. This mainly relates to the increase in the depreciation budget for 2023-24 and the reclassification of budget for the Environment Agency from Capital DEL to Resource DEL for 2023-24 (partially off-set by a smaller Capital DEL to Resource DEL transfer actioned in this Main Estimate), as explained in section 1.5.

2. Animal, fish and plant health

Resource DEL spending under this subhead is forecast to decrease by £170.0 million or 28.0% since the 2023-24 Supplementary Estimate. This mainly relates to the reserve claims that were processed in the 2023-24 Supplementary Estimate for Avian Influenza and the Biosecurity, Borders and Trade Programme, and the reclassification of budget from Capital DEL to Resource DEL for digital programmes within the Animal and Plant Health Agency. There has also been a decrease in budget for the UK Seafood Fund, as explained in section 1.5.

3. Departmental operating costs

Resource DEL spending under this subhead is forecast to decrease by £247.6 million or 31.5% since the 2023-24 Supplementary Estimate. This is mainly due to a credit budget being held in the centre to allow for budget to be allocated out for the farming programme that is anticipated in the 2024-25 Supplementary Estimate following the £200m that was reprofiled from the Capital DEL budget in the 2023-24 Main Estimate, as explained in section 1.5. In addition to this, £80 million has been transferred from Capital DEL to Resource DEL, within the Environment Agency, to better align the budgeting treatment of project expenditure with accounting standards. This Capital DEL to Resource DEL switch is expected to be processed in the 2024-25 Supplementary Estimate. Until this happens, there is an off-setting Resource DEL to Capital DEL transfer in the centre, making this line look comparably lower in 2024-25.

Capital DEL

The table below shows how Defra’s spending plans for Capital DEL compare with last year.

Description and subheads	2024-25 Main Estimate budget sought  (£m)	2023-24 Supplementary Estimate approved (£m)	Change from Supplementary Estimate (£m)	Change from Supplementary Estimate (%)
Food and farming - A	690.5	361.9	328.6	90.8 (see note 4)
Improve the environment and rural services – B,G	474.3	783.1	-308.8	-39.4 (see note 5)
Flood protection – C,H	944.9	603.0	341.9	56.7 (see note 6)
Animal, fish and plant health – D,E,I	133.7	239.0	-105.3	-44.1 (see note 7)
Departmental operating costs - F	516.0	125.6	390.4	310.8 (see note 8)
Total	2,759.4	2,112.6	646.8	30.6

Variations between the current and past budget are given below:

• where the variation is greater than both 10% and £10 million
• where the variation is greater than both 5% and £200 million
• any other variation whereby an explanation is necessary that is significant new spending programmes or unusual one-off spending items

Further detail of spending within these totals is given in the Table at Annex A.

4. Food and farming

Capital spending under this subhead is forecast to increase by £328.6 million or 90.8% since the 2023-24 Supplementary Estimate. This mainly relates to increases in budget for the ring-fenced Farm Support payments, including the £200 million reprofiled from the 2023-24 Capital DEL budget into the 2024-25 Resource DEL budget, and the reprofiling of the farming budget from 2023-24 into 2024-25 using HM Treasury’s Budget Exchange, as explained in section 1.5.

5. Improve the environment and rural services

Capital spending under this subhead is forecast to decrease by £308.8 million or 39.4% since the 2023-24 Supplementary Estimate. This mainly relates to the Collection and Packaging Reforms programme, as explained in section 1.5.

6. Flood protection

Capital spending under this subhead is forecast to increase by £341.9 million or 56.7% since the 2023-24 Supplementary Estimate. This mainly relates to the reclassification of budget for the Environment Agency from Capital DEL to Resource DEL for 2023-24 (partially off-set by a smaller Capital DEL to Resource DEL transfer actioned in this Main Estimate) and budget being returned to HM Treasury in 2023-24 due to the reprofiling of the programme of spend for the Flood and Coastal Risk Management budget, as explained in section 1.5.

7. Animal, fish and plant health

Capital spending under this subhead is forecast to decrease by £105.3 million or 44.1% since the 2023-24 Supplementary Estimate. This mainly relates to an element of the capital research and development budget being held in the centre, on the Departmental operating costs line, for 2024-25 to enable ministerial scrutiny of our science research and development programmes via a star chamber. This budget was delegated out in the 2023-24 Supplementary Estimate making this line comparably lower in 2024-25 than 2023-24. This Estimate line also shows a lower budget for the UK Seafood Fund for 2024-25 as the budget has not formally been allocated out yet, but approval to spend has been granted. This is partially offset by the budget transfer into 2024-25 from 2023-24 using HM Treasury’s Budget Exchange due to an underspend in 2023-24 which was driven by the planned schedule of the Science Capability in Animal Health and the Critical Works programme at Weybridge, as explained in section 1.5.

8. Departmental operating costs

Capital spending under this subhead is forecast to increase by £390.4 million or 311% since the 2023-24 Supplementary Estimate. This mainly relates to the decision to hold an element of the research and development budget for 2024-25 in the centre, on this estimate line, to enable ministerial scrutiny of our science research and development programmes via a star chamber. This was delegated out in the 2023-24 Supplementary Estimate making this line comparably higher in 2024-25 than 2023-24, as explained in section 1.5. In addition to this, there is an £80 million increase due to the Resource DEL to Capital DEL transfer, processed in the centre, which off-sets the Environment Agency Capital DEL to Resource DEL transfer, as explained in the Resource DEL section.

Resource AME

The table below shows how Defra’s spending plans for Resource AME compare with last year.

Description and subheads	2024-25 Main Estimate budget sought  (£m)	2023-24 Supplementary Estimate approved (£m)	Change from Supplementary Estimate (£m)	Change from Supplementary Estimate (%)
Food and farming – J,O	-767.7	1,641.3	-2,409.0	-146.8 (see note 9)
Improve the environment and rural services – K,P	42.0	-43.4	85.4	196.8 (see note 10)
Flood protection - Q	156.1	177.1	-21.0	-11.9 (see note 11)
Animal, fish and plant health – L,M,R	0.1	0.1	0.0	0.0
Departmental operating costs - N	46.0	-27.6	73.6	266.7 (see note 12)
Total	-523.5	1,747.5	-2,271.0	-130.0

Variations between the current and past budget are given below:

• where the variation is greater than both 10% and £10 million
• where the variation is greater than both 5% and £200 million
• any other variation whereby an explanation is necessary that is significant new spending programmes or unusual one-off spending items

Further detail of spending within these totals is given in the Table at Annex A.

9. Food and farming

Resource AME spending under this subhead is forecast to decrease by £2,409.0 million or 147% since the 2023-24 Supplementary Estimate. This mainly relates to the commitment to pay area-based direct payments for farmers linked to 2023-24 claims, as explained in section 1.5.

10. Improve the environment and rural services

Resource AME spending under this subhead is forecast to increase by £85.4 million or 197% since the 2023-24 Supplementary Estimate. This is mainly driven by a decrease in value for the Metal Mines provision in the 2023-24 Supplementary Estimate due to the change in discount rate, as explained in section 1.5.

11. Flood protection

Resource AME spending under this subhead is forecast to decrease by £21.0 million or 11.9% since the 2023-24 Supplementary Estimate. This is mainly due to some small differences between years for the Environment Agency pension scheme.

12. Departmental operating costs

Resource AME spending under this subhead is forecast to increase by £73.6 million or 267% since the 2023-24 Supplementary Estimate. This is mainly driven by a decrease in the Foot and Mouth Burial Site provision in the 2023-24 Supplementary Estimate due to the change in discount rate, as explained in section 1.5.

Capital AME

The table below shows how Defra’s spending plans for Capital AME compare with last year.

Description and subheads	2024-25 Main Estimate budget sought  (£m)	2023-24 Supplementary Estimate approved (£m)	Change from Supplementary Estimate (£m)	Change from Supplementary Estimate (%)
Food and farming – J,O	14.1	14.5	-0.4	-2.8
Improve the environment and rural services – K,P	0.0	1.8	-1.8	-100.0
Flood protection - Q	0.0	3.7	-3.7	-100.0
Animal, fish and plant health – L,M,R	0.6	0.0	0.6	100.0
Departmental operating costs - N	42.0	11.4	30.6	268.4 (see note 13)
Total	56.7	31.4	25.3	80.6

Variations between the current and past budget are given below:

• where the variation is greater than both 10% and £10 million
• where the variation is greater than both 5% and £200 million
• any other variation whereby an explanation is necessary that is significant new spending programmes or unusual one-off spending items

Further detail of spending within these totals is given in the Table at Annex A.

13. Departmental operating costs

Capital AME spending under this subhead is forecast to increase by £30.6 million or 268% since the 2023-24 Supplementary Estimate. This mainly relates to the budget for dilapidation provisions capitalised as part of the right-of-use asset under IFRS16. This accounting standard states how leases should be presented, recognised, measured and disclosed in the annual accounts. Budgets across the years were based on best estimates of the projected capital costs across the corporate estate.

2.2  Restructuring

There have been no restructures as part of this Main Estimate.

2.3  Ring-fenced budgets

Within the budgetary totals, the following elements are ring-fenced for 2024-25, i.e. savings in these budgets may not be used to fund pressures on other budgets.

Resource DEL 

	Spending total Amounts sought this year         (Main Estimate 2024-25) (£m)	Difference (+/-) compared to final 2023-24 budget (£m)	Difference (+/-) compared to final 2023-24 budget (%)	Difference (+/-) compared to original 2023-24 budget (£m)	Difference (+/-) compared to original 2023-24 budget (%)
Farm Support Payments	1,667.6	-70.9	-4.1	-70.9	-4.1
Depreciation	368.2	-152.6	-29.3	64.4	21.2
Official Development Assistance	175.5	32.3	22.6	30.0	20.6
Digital Assistance Scheme (DAS)	13.1	13.1	100.0	-13.8	-51.3
UK Seafood Fund	0.2	0.2	100.0	-36.1	-99.4
Fisheries (replaces EMFF)	13.5	0.0	0.0	0.0	0.0
Project Speed	9.0	0.0	0.0	0.0	0.0
Green Finance	2.0	-1.4	-41.2	-2.0	-50.0
Shared Outcome Fund	2.7	-2.3	-46.0	-1.7	-38.6
IFRS 16	9.0	5.4	150.0	5.4	150.0
Overseas Territories	6.8	0.0	0.0	0.0	0.0
Avian Influenza	0.0	-35.0	-100.0	0.0	0.0
Covent Garden Market Authority	0.0	-2.4	-100.0	0.0	0.0
Windsor Framework	0.0	-47.2	-100.0	0.0	0.0
Borders Programme	0.0	-23.0	-100.0	0.0	0.0
Digital Programme	0.0	-60.8	-100.0	0.0	0.0
Floods Programme	0.0	-25.0	-100.0	0.0	0.0
Capital Works Expensed in Year (Environment Agency)	0.0	-182.0	-100.0	0.0	0.0

The ring fences for Digital Assistance Scheme (DAS) and UK Seafood Fund were relaxed in 2023-24 by HM Treasury to allow Defra to meet in-year pressures.

The following budgets were ringfenced in the Supplementary Estimate 2023-24 following either a Reserve Claim or reclassifications from Capital.

• Avian Influenza
• Covent Garden Market Authority
• Windsor Framework
• Borders Programme
• Digital Programme
• Floods Programme
• Capital Works Expensed in Year (Environment Agency)

Capital DEL

	Spending total Amounts sought this year         (Main Estimate 2024-25) (£m)	Difference (+/-) compared to final 2023-24 budget (£m)	Difference (+/-) compared to final 2023-24 budget (%)	Difference (+/-) compared to original 2023-24 budget (£m)	Difference (+/-) compared to original 2023-24 budget (%)
Farm Support Payments	674.0	339.0	101.2	257.9	62.0
Defra Science and Weybridge R&D	362.7	244.7	207.4	91.7	33.8
Nature for Climate Fund	234.0	24.0	11.4	24.0	11.4
IFRS 16	50.4	50.4	100.0	-4.8	-8.7
Digital Assistance Scheme (DAS)	5.0	5.0	100.0	-20.5	-80.4
UK Seafood Fund	0.3	-44.2	-99.3	-44.2	-99.3
Official Development Assistance (R&D)	21.0	21.0	100.0	-4.0	-16.0
Shared Outcome Fund	3.4	-1.8	-34.6	-1.7	-33.3
Project Speed	8.3	-1.0	-10.8	-1.0	-10.8
Mine Remediation	7.0	0.0	0.0	0.0	0.0
Kew Open Herbarium	1.0	-6.0	-85.7	-6.0	-85.7
Green Finance	1.0	-3.3	-76.7	-3.3	-76.7

The Official Development Assistance (R&D) budget was reduced to zero in 2023-24 Supplementary Estimate following a Budget Cover Transfer to the Department for Energy, Security and Net Zero for the Initiative for Sustainable Forest Landscapes project.

The following ring fences were relaxed/partially relaxed in 2023-24 by HM Treasury to allow Defra to meet in-year pressures.

• Defra Science and Weybridge R&D
• IFRS 16
• Digital Assistance Scheme (DAS)

2.4  Contingent liabilities

The Main Estimate includes details of all the contingent liabilities included in the Department’s 2022-23 Annual Report and Accounts (ARA).

3    Priorities and performance

3.1  How spending relates to Priority Outcomes

The table below shows how budget against each subhead has been allocated to Departmental Priority Outcomes under the Priority Outcomes and performance metrics as published in the Spending Review 2021.

Priority Outcome 1

Improve the environment through cleaner air and water, minimised waste, and thriving plants and terrestrial and marine wildlife.

Priority Outcome 2

Reduce greenhouse gas emissions and increase carbon storage in the agricultural, waste, peat and tree planting sectors to help deliver net zero.

Priority Outcome 3

Reduce the likelihood and impact of flooding and coastal erosion on people, businesses, communities and the environment.

Priority Outcome 4

Increase the sustainability, productivity and resilience of the agriculture, fishing, food and drink sectors, enhance biosecurity at the border and raise animal welfare standards.

Subhead	Description	Priority Outcome 1	Priority Outcome 2	Priority Outcome 3	Priority Outcome 4
A,J,O	Food and farming		X		X
B,G,K,P	Improve the environment and rural services	X	X
C,H,Q	Flood protection			X
D,E,I,L,M,R	Animal, fish and plant health				X
F,N	Departmental operating costs	X	X	X	X

3.2  Measures of performance against each priority

Defra Group’s Priority Outcomes and metrics (as published in the Spending Review 2021 sets out the following high-level Priority Outcomes, and performance metrics, for the Department for the current financial year.

Priority Outcome 1 Performance Metrics

Improve the environment through cleaner air and water, minimised waste, and thriving plants and terrestrial and marine wildlife.

• annual ammonia (NH3) emissions
• annual fine particulate matter (PM2.5) emissions
• annual sulphur dioxide (S02) emissions
• annual nitrogen oxides (NOx) emissions
• annual non-methane volatile organic compounds (NMVOC) emissions
• number of kilometres of enhanced and protected water environment
• percentage of bathing waters reaching minimum standard
• percentage of waters close to their natural state
• municipal waste recycling rate (per cent)
• number of high-risk illegal waste sites
• packaging waste and recycling rate, split by material (metal, paper, plastic, glass and wood)
• residual household waste per household (kg/household)
• percentage of the population engaging with open and green spaces
• number of hectares of priority habitat created or restored

Priority Outcome 2 Performance Metrics

Reduce greenhouse gas emissions and increase carbon storage in the agricultural, waste, peat and tree planting sectors to help deliver net zero.

• greenhouse gas emissions by Defra sector (waste and agriculture) (tonnes of CO2 equivalent)
• total projected greenhouse gas savings through Defra policies included in the Energy and Emissions Projections
• change in fluorinated greenhouse gases emissions
• hectares of peatland brought under restoration
• hectares of trees planted

Priority Outcome 3 Performance Metrics

Reduce the likelihood and impact of flooding and coastal erosion on people, businesses, communities and the environment.

• number of properties better protected from flooding in England
• percentage of flood defence assets at required condition
• climate change adaptation progress score by sector

Priority Outcome 4 Performance Metrics

Increase the sustainability, productivity and resilience of the agriculture, fishing, food and drink sectors, enhance biosecurity at the border and raise animal welfare standards.

• productivity of the UK agricultural industry
• productivity of the UK food industry
• value of UK food and drink exported (£)
• percentage of total allowable catches for quotas for fish stocks of UK interest that have been set consistent with maximum sustainable yield
• number of dogs illegally landed (non-compliant) in GB
• percentage of cattle herds that are bovine tuberculosis free
• percentage of export health certificates and licences issued within agreed timescales
• number of high priority forest pests in the UK Plant Health Risk Register

3.3  Commentary on steps being taken to address performance issues

Actions designed specifically to address performance issues are included in the published ARA in chapter 2 performance analysis.

3.4  Major projects

Defra continues to build its Portfolio and Project Delivery function. The function supports the delivery of our major projects and brings a sustainable uplift to the Department’s project delivery capability, building on the Infrastructure and Projects Authority (IPA) functional standards for project delivery and the project delivery framework.

Within the wider Defra portfolio, we have ten projects on the Government Major Projects Portfolio (GMPP):

Project/Programme (as per the Q3 2023-24 GMPP data)	Joined GMPP	Start Date	End Date	Baseline Whole Life Cost £m
Farming and Countryside Programme (FCP)	Q1 20-21	01-May-17	31-Dec-28	24,875
Flood, Coastal Erosion Risk Management 6-year Capital Programme	Q1 23-24	01-Apr-20	31-Mar-27	5,626
Science Capability and Animal Health Programme (SCAH)	Q1 20-21	01-Apr-21	30-Sep-36	2,820
Nature for Climate Fund Programme (NCF)	Q4 20-21	01-Apr-20	31-Mar-25	928
Defra Biosecurity Borders and Trade Programme (BBTP)	Q1 21-22	01-Jan-21	31-Mar-25	902
N02 Reduction Programme	Q4 20-21	01-Jan-16	31-Dec-27	883
Workplace and Facilities Management Project (WP&FM)	Q2 21-22	01-Jun-21	31-Oct-24	855
Collections, Packaging & Reform Programme (CPR)	Q3 21-22	02-Apr-18	31-Mar-27	478
Northern Ireland Programme	Q1 21-22	01-Jan-21	01-Jun-25	467
Terrestrial Natural Capital and Ecosystem Assessment Programme (tNCEA)	Q4 22-23	01-Apr-21	01-Apr-25	125

We also track our pipeline of future programmes and assess their potential for inclusion on GMPP: in quarter 1 2023-24 the major Flood and Coastal Risk Management programme joined the GMPP, replacing the five Environment Agency projects (River Thames Project, Bridgewater Barrier Project, Oxford Flood Alleviation Scheme Project, Leeds Phase II (Flood Scheme) Project and Pevensey and Eastbourne Project); and the IPA have confirmed that the CEFAS RV Endeavor project and Livestock Improvement Transformation Programme will join the GMPP in quarter 1 2024-25.

UK Seafood Fund is moving toward closure, Spring 2025, and is no longer a GMPP programme – last reporting in quarter 3 2023-24 (December 2023).

All projects are formally constituted with a business case, Senior Responsible Officer and project board, and operate within the assurance and approvals framework set out in Defra’s Integrated Assurance and Approvals Strategy.

This includes the Investment Committee which oversees investment decisions on behalf of the Defra Executive Committee (ExCo), and Delivery Committee which oversees delivery of the Department’s portfolio and Priority Outcomes. Monthly reporting to the Executive and Delivery Committees ensures good senior oversight of delivery at the departmental level across the whole Department.

The level of assurance is based on the Risk Potential Assessment and captured in an Integrated Assurance and Approvals Plan for each project. The IPA provide third line assurance for the Portfolio and our GMPP projects.

In addition, the Government Internal Audit Agency undertakes independent audit reviews for projects on the Defra Portfolio (including those on GMPP) as set out in the annual audit plan, which will be agreed by the ExCo at the beginning for the financial year.

The Department provides second line assurance on all business cases through an internal independent review team process and plans to implement independent assurance reviews for all the Department’s major projects not covered by the IPA’s third line assurance.

4    Other information: summary of funding variations split by the core Department and delivery bodies

Included in Annex C is a table detailing the funding variations split by the core Department and delivery bodies.

5    Accounting Officer approval

This Estimates Memorandum has been prepared according to the requirements and guidance set out by the House of Commons Scrutiny Unit, available on the Scrutiny Unit website.

The information in this Estimates Memorandum has been approved by me in my capacity as the Department’s Principal Accounting Officer.

Tamara Finkelstein

Accounting Officer

Permanent Secretary, Department for Environment, Food and Rural Affairs

15 July 2024

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1. Estimates are being prepared during a general election campaign, the priority outcomes were set in the previous Parliament ↩

2. This is a cross-cutting outcome. Contributing departments are the Department for Transport and the Department for Levelling Up, Housing and Communities ↩

3. This supports the wider net zero cross-cutting outcome led by the Department for Energy Security and Net Zero ↩