DEFRA has announced important updates on two key funding schemes that could impact many farms and rural businesses: Capital Grants and Higher Level Stewardship (HLS)/Countryside Stewardship Higher Tier (CSHT). Here’s what you need to know.

Capital Grants: Funding secured and new spending caps

Good news for those who applied for Capital Grants before the scheme temporarily closed in November 2024—DEFRA has now secured enough funding to process the 4,040 applications that were put on hold. If yours was one of them, you don’t need to do anything; the Rural Payments Agency (RPA) will be in touch.
If you missed the deadline, you’ll get another chance to apply when the scheme reopens later this year.

Key changes to note

Spending caps were introduced:

• £25,000 for projects improving water and air quality or managing natural flood risks.

• £35,000 for boundary, tree, and orchard projects.

Fairer access: New controls aim to balance demand and make sure smaller farms and high-priority projects get a fair share of funding.

Continued environmental focus: Grants support biodiversity projects such as hedge planting, habitat restoration and natural flood management.

DEFRA will release further guidance soon, so keep an eye out if you plan to apply.

Higher Level Stewardship and Countryside Stewardship Higher Tier: Higher payments and scheme improvements

For those involved in Higher Level Stewardship (HLS), there’s a welcome boost—payment rates are increasing from the 2025 claim year to better reflect the work involved in managing habitats and restoring landscapes. All existing agreement holders will receive these higher rates automatically as part of their payments from December 2025. DEFRA will send out details by April, along with a table of updated rates.

Meanwhile, Countryside Stewardship Higher Tier (CSHT) continues to support farmers managing land for environmental benefits. The scheme covers a wide range of land types, including woodlands, farmed land and Sites of Special Scientific Interest (SSSIs).

A more targeted approach: Applications now require collaboration with Natural England and Forestry Commission advisers to tailor environmental outcomes.

Pre-application by invitation only (for now): DEFRA is testing an improved CSHT scheme, with plans to widen access in the future.

These schemes offer valuable funding, particularly for those committed to environmental land management and biodiversity restoration. Further details will be released in the coming months.

Need help?
Whether you’re waiting on a Capital Grant application or considering Stewardship funding, it’s clear DEFRA is refining these schemes to support environmental goals while ensuring fair access. If you need help with the changes or planning for future applications, now’s a good time to review your options.

Seek expert advice if you're unsure about how these updates impact your farm or business. Get in touch with your usual Larking Gowen contact via the Our People section of our website, or email enquiry@larking-gowen.co.uk.

Bruce Masson