Over the past year, DEFRA has made significant adjustments to the Sustainable Farming Incentive (SFI) and Capital Grants as part of a wider reset of Environmental Land Management (ELM) schemes, which has seen a shift away from open-ended schemes towards time-limited funding rounds with clearer prioritisation and value-for-money controls. These have come as the result of increasing budgetary pressures and a move towards a more targeted, outcome-focused approach to environmental funding. While long-term funding for environmental land management has been reaffirmed through the 2025 Spending Review, access to schemes is going to be even more competitive.
SFI was closed to new applications in March 2025, but DEFRA has confirmed that the scheme will reopen in a revised form in 2026 (no date given).
New budgetary controls suggest that the capping of some options may be introduced, along with a financial limit per scheme. Early indications also suggest that the revised scheme will be targeted at less resilient farms, which may see the introduction of target areas for certain options, with the focus being on achieving greater environmental benefits on less productive land – and while full details of the scheme are yet to have been released, they will be published ahead of the application window opening in mid-2026.
Applications for Capital Grants are also set to re-open in 2026 (again no date given) but again it is expected that the funding caps per ‘business’ will be retained as part of efforts to ensure that the available funds are distributed more evenly.
With the application window for the 2025 scheme having abruptly closed within just 4 weeks of opening, our advice is to commence preparations for the 2026 scheme as soon as possible. This applies particularly to those requiring Catchment Sensitive Farming approval for water quality related items – so that you are able to ‘Get ahead’ and be in a position to submit when the window of surprise opens!
To discuss the availability of grant schemes and for assistance with your applications in 2026, please contact us.
By Pete Osborne
