Closure of SFI – further belt-tightening, or a concerted push for private finance?
The government’s decision, as of 11 March, to stop accepting applications to the Sustainable Farming Incentive (“SFI”) has been met with widespread dismay. Some commentators have seen it as yet another example of the government’s “anti-rural” bias. It follows the inheritance tax changes announced in the Autumn Budget, and comes hot on the heels of the Planning and Infrastructure Bill, which has sparked widespread concern about the possible use of compulsory purchase for development land.
The government’s justification for pausing SFI is that it has reached its £1.05 billion cap. It describes itself as “a responsible government committed to the careful management of a fixed budget.” On the face of it, pausing SFI demonstrates the government’s determination to keep its books balanced and stay solvent.
However, the simultaneous publishing of detail surrounding the Nature Restoration Fund may suggest an alternative, with the intention that further funding for environmental recovery be sourced via housing and infrastructure delivery. Whilst the nature of the Nature Restoration Fund as a solution to resolving Nutrient Neutrality (on the face of it) would be largely localised, it is perhaps indicative of a movement towards scaling up nature restoration projects, both financially and spatially.
The withdrawal of SFI, and launch of initiatives like the Nature Restoration Fund, could be characterised as a new approach intended to force the mobilisation of private investment into nature-friendly land management, with the reduction of government finance through SFI to be balanced by increasing private funding via the planning system in the first instance and through new nature finance markets as they grow.
Is the pausing of SFI no more than the government further demonstrating its determination to live within its means? Or is it part of a more overt push towards seeking engagement from private finance in nature restoration?
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