Landscape Recovery Projects explained: Opportunities, obligations and oversight
Legal expertise in DEFRA Landscape Recovery schemes
Our Natural Capital legal team has significant and deep expertise advising on DEFRA’s Landscape Recovery schemes and related land recovery initiatives, supporting councils, farmers, landowners, investors and project delivery bodies through the full lifecycle of land restoration projects. We advise on project structuring, implementation agreements, land participation arrangements, governance and risk management, helping ensure that schemes are legally robust, deliverable and capable of adapting over time.
By combining Environmental, Public law, Commercial and Real Estate expertise, we help clients navigate the legal and practical challenges of Landscape Recovery and similar land restoration initiatives, while maintaining focus on long term outcomes and investment confidence.
Drawing on that significant experience, we have written this article to explain the key issues that any person involved in a Landscape Recovery project should consider.
Landscape Recovery projects: ambition, opportunity and legal reality
Landscape Recovery represents one of the most ambitious environmental programmes currently being delivered in England. Through ambitious long term projects, DEFRA is seeking to support nature recovery, climate resilience and rural economic opportunity in a way that goes far beyond traditional schemes.
For councils, farmers, landowners, investors and advisers, Landscape Recovery offers the potential to deliver transformational outcomes and unlock new environmental and private finance markets. At the same time, as projects move from development into delivery, there is a growing recognition that these initiatives bring with them significant legal, governance and operational obligations which need to be clearly understood and carefully managed.
The Implementation Agreement is the core delivery contract between DEFRA (or the relevant Managing Authority such as Natural England) and the single legal entity, setting out the funded activities, outcomes and milestones the project must achieve. It also establishes the governance, payment, reporting and assurance framework and sets the principal remedies available to DEFRA, including step in, suspension and termination rights where delivery or compliance requirements are not met.
Having advised on a large number of these projects it has been our experience that much of the current focus has centred on how the project Implementation Agreement allocates responsibility and risk over a 20 year plus project lifespan and what that means in practice for the organisations leading delivery.
Overview of Landscape Recovery projects
Landscape Recovery forms part of DEFRA’s wider Environmental Land Management framework and is designed to support bespoke, large-scale projects that deliver measurable environmental outcomes over extended periods. By their nature, these projects involve multiple stakeholders, complex ecological delivery pathways and long-term public investment.
The single legal entity (SLE) is the project delivery vehicle set up (or nominated) to receive and manage DEFRA payments, coordinate delivery across multiple landowners/tenants and take primary responsibility for compliance, reporting, governance and risk at project level. The SLE then typically contracts “back-to-back” with participating land managers (via land management/participation agreements) so the on-the-ground obligations needed to meet the Implementation Agreement requirements are flowed down to the parties who control the land.
The SLE enters into the Implementation Agreement with DEFRA and acts as the coordinating body for delivery across participating landholdings. This structure reflects DEFRA’s need for a clear contractual counterparty while allowing flexibility in how individual landowners and farmers participate on the ground.
As DEFRA’s own communications make clear, entry into the delivery phase brings with it increased focus on accountability, monitoring and assurance, reflecting both the scale of funding involved and the importance of securing long term outcomes.
Key issues commonly arising in delivery discussions
Our clients have noted that the Template Implementation Agreement places a significant degree of responsibility on the SLE. This is consistent with DEFRA’s need to ensure that public funding is protected and that projects remain capable of delivery across their full lifespan.
Individually, many of the relevant provisions reflect familiar public sector funding protections. When considered collectively, however, they underline the importance for SLEs of having robust governance, clear internal controls and well structured participation agreements with land managers and partners ensuring back-to-back obligations where necessary.
Landscape Recovery projects are designed to safeguard public value over the long term, and DEFRA’s termination rights need to be seen in that wider context. Our clients have nevertheless focused on understanding how those rights might operate in practice, particularly where termination could lead to recovery of funding already paid.
There has been particular interest in how issues such as sunk costs, third party commitments and long term land management arrangements are taken into account. From a planning perspective, this has encouraged SLEs and funders to model downside scenarios carefully and to build appropriate contingencies into their delivery approach.
Given the scale and complexity of Landscape Recovery projects, defaults may sometimes arise from factors such as regulatory delay, landowner decisions or third party constraints. Our clients have therefore examined how default and cure provisions interact with ecological and land management timescales.
These discussions have tended to focus on practical risk management: ensuring that reporting systems, escalation processes and engagement with DEFRA are sufficiently robust to identify and address issues early, before they crystallise into more serious delivery problems.
By design, Landscape Recovery relies on collaboration across multiple landholdings and stakeholders. The Implementation Agreement reflects this by placing delivery responsibility on the SLE, even where outcomes depend on the actions of others.
In response, many projects are focusing on strengthening participation agreements, communication protocols and incentive structures with landowners and tenants, recognising that effective coordination is central to long term success.
Landscape Recovery projects operate over extended periods during which science, policy and markets will inevitably evolve. While the Implementation Agreement includes formal change mechanisms, their operation has been a key area of discussion with clients.
Rather than viewing this as an obstacle, many are approaching change control as an ongoing relationship issue one that requires proactive engagement, clear evidence based proposals and early dialogue with DEFRA as projects mature.
The monitoring, evaluation and reporting requirements placed on SLEs are significant, reflecting the scale of public investment and the need for transparency. Our clients have increasingly recognised that these obligations must be adequately resourced and factored into long term financial and organisational planning.
Boards and investors are therefore paying closer attention to operational capacity, data systems and audit readiness from the outset.
DEFRA’s role as funder and counterparty naturally creates a particular dynamic in dispute scenarios. While formal challenge mechanisms exist, many clients see the primary emphasis as being on early issue resolution, structured engagement and maintaining momentum in delivery.
This has reinforced the importance of clear governance structures and documented decision making processes within the SLE.
VAT treatment remains an important area of due diligence. Over long project timescales, irrecoverable VAT can have a material impact on financial viability. Our clients are therefore increasingly seeking early specialist advice to ensure that funding structures, contracts and land arrangements are aligned as far as possible with VAT efficiency.
Landscape Recovery projects generate valuable data and learning. The Implementation Agreement reflects DEFRA’s policy objective of transparency and knowledge sharing, while clients are also considering how data and intellectual property rights interact with potential future commercialisation of natural capital outcomes.
Balancing openness with investor and partner expectations is therefore an important early consideration.
Implications for project lead organisations
For organisations acting through a single legal entity, Landscape Recovery requires a shift in mindset. The SLE is not merely administering grant funding but is assuming long term responsibility for delivery, governance and compliance under English law.
This places a premium on strong boards, well defined decision making frameworks and clear alignment between the SLE, landowners, delivery partners and funders. When those foundations are in place, the structure can support both policy objectives and long term project resilience.
Actions for project lead organisations to consider
Project lead organisations should consider:
- Undertaking a holistic review of the Implementation Agreement to understand cumulative obligations
- Embedding risk, termination and change scenarios into long term financial planning
- Ensuring land and partner agreements are aligned with delivery obligations
- Investing early in governance, reporting and assurance capability
- Engaging constructively with DEFRA on delivery and change discussions and
- Obtaining specialist tax and VAT advice at an early stage.
How we can help
Landscape Recovery offers a rare opportunity to deliver long term environmental improvement at scale in England. Its ambition and duration inevitably bring complexity and project success depends on having clear governance, appropriate risk allocation and a well structured legal framework from the outset.
If you’re considering a Landscape Recovery bid, already in delivery, or just want to ‘sense check’ your approach, or if we can help with anything covered in this article, please feel free to get in touch with Mohammad Sajjad or any member of our Natural Capital legal team .
Key contacts
Penny Simpson
Partner | Head of Natural Capital Law
Related expertise
The content of this page is a summary of the law in force at the date of publication and is not exhaustive, nor does it contain definitive advice. Specialist legal advice should be sought in relation to any queries that may arise.
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