At the 2025 Groundswell Show yesterday, Environment Secretary Steve Reed announced the reopening of Defra’s Capital Grants scheme. The scheme is now accepting new applications to support land management and environmental improvement projects.
Farmers, landowners, and land managers can apply for funding to carry out capital works from a list of 78 items, grouped into six categories:
• Air quality
• Assessments
• Boundaries, trees and orchards
• Natural flood management
• Improvements
• Water quality
Applicants can apply for items across any of these categories. However, the following funding limits apply:
• Up to £25,000 for water quality
• Up to £25,000 for air quality
• Up to £25,000 for natural flood management
• Up to £35,000 for boundaries, trees and orchards
These limits are set per business, per year, enabling applicants to reapply annually. Agreements last for a period of three years. Applicants must have management control of the land for 5 years from the starting date of the agreement. Those that occupy land under a tenancy must have a tenancy agreement granting management control for at least 3 years from the start of the Capital Grants agreement as well as the permission of their landlord.
Grants will be awarded on a first-come, first-served basis. We therefore strongly encourage early applications, as the scheme will close once all available funding is allocated. Defra will then review and update the offer.
With a competitive funding round anticipated in 2026, this round presents a key opportunity for those planning eligible capital works in the near future.
Wider funding commitments
In his speech, Mr Reed also reaffirmed the government’s £2.7 billion annual investment in sustainable farming and nature recovery over the next three years, as set out in the Spending Review. Funding under the Environmental Land Management schemes is set to increase by 150%, reaching £2 billion by 2029. An additional £400 million will support nature-focused initiatives such as tree planting and peatland restoration.
The further reformed Sustainable Farming Incentive (SFI) will relaunch next year and will focus on improving water quality, boosting biodiversity, cleaning up polluted rivers, supporting wildlife on farms and enhancing the natural environment to enable sustainable food production. Further details will be released this summer.
You can read Mr Reed’s full speech here. For more information or assistance with your Capital Grant application, please contact our office.
