1. About the fund
The natural environment investment readiness fund (NEIRF) supports the government’s goals in the 25 year environment plan, green finance strategy and 10 point plan for a green industrial revolution. It aims to stimulate private investment and market based mechanisms that improve and safeguard our domestic natural environment by helping projects get ready for investment.
The NEIRF is a competitive grants scheme providing grants of between £10,000 and £100,000 to support the development of environmental projects in England that:
- help achieve one or more natural environmental outcomes from the 25 year environment plan
- have the ability to produce revenue from ecosystem services to attract and repay investment
- produce an investment model that can be scaled up and reproduced
Examples of ecosystem services that could produce revenue include:
- selling carbon credits from woodland creation or peatland restoration, using the Woodland Carbon Code or Peatland Code
- selling biodiversity units from a habitat bank, using the Natural England biodiversity offsetting metric
- selling ‘catchment services’ (such as improved water quality and natural flood management benefits) resulting from natural environment improvements
The grants are to help you to:
- get support from professional advisors to develop your project, address barriers to investment and present an attractive case for potential investors
- build capability to attract financial investment into natural environment projects
- develop a market for ecosystem services (such as investment or trading platforms, codes for verifying benefits, aggregator vehicles)
We will expect you to make the products and knowledge gained through the fund openly available for the benefit of others. This is to help the development of:
- the natural capital investment sector
- policy and regulation, including alignment with future government funding schemes
You can apply for an NEIRF grant between 10 February 2021 and 26 March 2021.
The Environment Agency administers the scheme on behalf of the Department for Environment & Rural Affairs (Defra) group.
You can apply for grant if you are a:
- not-for-profit organisation, including charities and environmental non-governmental organisations
- public body, including local councils and national park authorities
- company or other business registered with HMRC, including sole traders, academic institutions, community interest companies and community benefit companies
You cannot apply for a grant if you are a:
- central government department or one of their executive agencies
- non-departmental public body
But those organisations can be partners in bids. If so, you will need to show which staff are partners in a grant application.
You must prove that you’re eligible when you apply.
3. How much you can apply for
You can apply for a grant of between £10,000 and £100,000.
We may approve grants of over £100,000 for exceptionally high scoring applications. These grants will go through extra assurance processes before the grant is awarded.
4. Application deadline
You can apply for a grant from 10 February 2021.
You must send all the information we need by 5pm on 26 March 2021.
5. The scope of NEIRF grants
The fund is for activities in England. It may fund activities to prepare projects where benefits apply across borders with Wales or Scotland – this will be based on the environmental benefits to England.
Projects must protect or enhance the domestic natural environment in line with one or more of the 25 year environment plan goals in the context of the following natural capital asset types:
- urban or areas of transition from rural to urban land uses (peri-urban)
- enclosed farmland
- mountain, moor and heathland
- freshwaters and wetlands
- coastal margins
- semi-natural grassland
Funded activities should be complete within one calendar year, but we may allow longer grant periods.
6. What the grant can pay for
The grants are to add to your own resources in the development of investment readiness proposals.
All costs must be directly associated with developing the investment readiness proposal to be eligible for funding. When carried out, these must have the potential to provide activities that meet all the fund’s aims.
The grant can fund up to 100% of eligible costs, but you should include details of any match funding in your application if it gives better value for money.
Not-for-profit organisations can apply for full costs recovery for up to 20% of your staff costs (organisational overheads such as those related to day to day running costs, insurance, or routine accommodation). But we will assess all applications for value for money.
6.1 Examples of activities eligible for funding
Internal organisational capacity
The salaries of staff developing the investment readiness proposals.
Specialist consultancy and technical advice to design and structure an investment model that will produce revenue or cost savings
Examples of the types of activities we can fund include:
- commercial appraisal of revenue generation approaches
- commercial and legal appraisal of potential investment and associated repayment terms
- business and financial modelling
- technical support for structuring investment and raising capital
- legal and governance advice, particularly for setting up suitable legal and other necessary structures to manage income generation, external investment, repayment processes and agreements
- investor due diligence requirements
- developing marketing and sales promotion strategies to allow you to confidently approach potential investors and successfully win external investment in your project
- impact measurement and management
- considerations for how the revenue generating aspects of the proposal will be carried out and managed on an ongoing basis
We will only fund activities such as securing consents, baseline surveys or research if you can clearly show that these will make your proposal more likely to be invested in.
You will need to make sure your use of NEIRF grant money follows the UK’s current and new international obligations for subsidies. This includes compliance with the UK’s commitments:
- from its membership of the World Trade Organisation (WTO)
- covered in free trade agreements, including the UK–EU Trade and Cooperation Agreement
You will get more detail with your grant agreement if you are successful.
7. What the grant cannot pay for
You cannot get funding for:
- capital spending, such as buying or leasing land or equipment
- costs already covered through other funding
- costs incurred before you’re awarded the grant
- meeting your own legal obligations (except related to designing and structuring an investment model)
- paid-for lobbying, which means using the grant to fund lobbying (through an external firm or in-house staff) to influence Parliament, government or political activity, or trying to influence legislative or regulatory action
- using the grant to directly allow one part of government to challenge another on topics unrelated to the agreed purpose of the grant
- expenses, such as for gifts or entertaining, specifically aimed at influencing government policy
- input VAT reclaimable by the grant recipient from HMRC
- fines, charges or dividends
- payments for activities of a political or wholly religious nature
8. How we will assess your application
There are 4 stages to the assessment process.
8.1 Stage 1 – screening
The Environment Agency will screen your application. It will identify if:
- you are eligible
- you have filled in and signed the application form
- you have included the supporting information that we need
- the proposal passes financial due diligence checks
- the proposal strategy aligns with the fund’s aims
If information is missing, you will have 10 working days from the date you are notified to send it to us.
8.2 Stage 2 – application assessment and scoring
Multidisciplinary experts across Defra, its arm’s length bodies and external advisors will then assess your application against the assessment criteria. The criteria are weighted by the contribution each one makes to the overall score.
We may ask you to send more technical information about your application.
The panel will then score the application.
Criterion A : The extent the application describes the environmental outcomes the proposed or resulting investment model will achieve for the government’s 25 year environment plan. This will be given a 30% weighting. (Application form section 3.1.)
Criterion B : The extent the application describes the potential of the proposed model to produce revenue. This will be given a 30% weighting. (Application form section 3.2.)
Criterion C : The extent the application shows potential for innovation and learning. This will be given a 30% weighting. (Application form section 3.3.)
Criterion D : Funded activities must clearly present value for money – minimising costs, maximising resources, effective project management and plans for assessing success. This will be given a 10% weighting. (Application form section 4.) This includes:
- proportionate and effective budget, presenting good value
- necessary arrangements in place to deliver project goals
- effective and clear path towards intended outputs and outcomes
See examples of how to meet the assessment criteria.
Weak (score 1): Application is supported by a weak standard of evidence in several areas. It gives the fund concern about the ability of the applicant to achieve and support the fund’s aims.
Promising (score 2): Application is supported by a satisfactory standard of evidence in most areas but a few areas lacking detail or evidence. Gives the fund some concerns about the ability of the applicant to achieve and support the fund’s aims.
Strong (score 3): Application is comprehensive and supported by good standard of evidence. Gives the fund confidence in the ability of the applicant to achieve and support the fund’s aims. Meets the fund’s requirements.
Outstanding (score 4): Application is very comprehensive and supported by a high standard of evidence. Gives the fund a high level of confidence of the ability of the applicant to achieve and support the fund’s aims. May exceed the requirements in most respects.
8.3 Stage 3 – moderation and shortlisting
The assessment panel will carry out a moderation process. This is to make sure it has scored applications consistently.
The panel may challenge any of the information it receives or request more information from applicants to support any statements made.
The assessment panel will make a shortlist of applications. It may withdraw low scoring applications.
8.4 Stage 4 – NEIRF project board
The project board will consider shortlisted applications and how they align with the fund’s strategic aims. It will confirm which applications to fund.
We should contact all applicants about the outcome of their application by July 2021.
The fund aims to give feedback to unsuccessful applicants.
9. Examples of how to meet the assessment criteria
9.1 Environmental outcomes
Your application should explain how your investment model will lead to natural environmental outcomes, referring to the 25 year environment plan and its outcome indicator framework.
The following are examples of outcomes.
Thriving plants and wildlife
- supporting or improving biodiversity
- supporting or improving pollinator status
- increasing favourable condition of protected sites
- restoration of priority habitats and reduction of degraded land
- supporting condition of marine habitats and sustainable use of the marine environment
- protecting threatened species
- net zero or negative emissions from deforestation and forest restoration
- increases in the percentage of production area under productive and sustainable agriculture and aquaculture
- creation of water habitats
Clean and plentiful water
Such as enhancing the water environment and supporting water bodies to meet good status.
Such as supporting reduction of emissions from important air pollutants.
Protection from flooding, drought and other environmental hazards, and mitigation of and adaptation to climate change
Enhancing beauty, heritage and engagement with the natural environment
Including better outcomes in landscapes for nature and for people.
9.2 Financial outcomes
Your application should describe with evidence, for example:
- how the investment model will produce revenue or cost savings from ecosystem services
- how the revenue or cost savings produce a return for an investor
- the scale of investment your model is likely to attract, including evidence and timeframes
- if you have approached any investors
9.3 Project potential, innovation and learning
Your application should describe your plans for how to complete the project and the potential to gather, keep and share knowledge.
This should include:
- whether your approach has been tried or carried out elsewhere (if this is outside England, you should justify that you could reproduce this in England) – explain the degree of innovation and risk
- the potential for the model to be scaled or reproduced
- how the long term sustainability of the outputs and outcomes will be maintained
- the extent to which the proposal is innovative and an opportunity for testing new approaches
- the potential to share knowledge from your proposal with others
- if and how the proposal will address barriers to investment – regulatory, policy or financial barriers
9.4 Value for money
Your application must show how you will develop the investment model in the most cost effective way and continue to achieve value for money throughout.
The important factors in value for money are:
- economy – if inputs of suitable quality are bought at a minimised price
- efficiency – how well inputs are converted into outputs
- effectiveness – how well those outputs achieve outcomes
You must show how you will:
- minimise costs
- get the best value from the resources you have
- use suitable and effective project management methods
- plan for assessing success
You must do this in the following ways.
A proportionate and cost effective budget, presenting good value
You must include accurate project costs in your application. You must show that costs are reasonable by including evidence. All costs need to be available for audit.
This should include:
- an overview of all costs, including comparisons of costs of similar works where possible
- details of estimated costs for advisory or consultancy services you have used or plan to use, so the model can produce income or attract investment
- details of any costs you will incur in developing internal organisational capacity and expertise, so the model can produce income or attract investment
- salary costs
Your costs must be clear and justified, including making the most of other sources of funding and resources for the project.
Costs should be extra – the fund must help you achieve outputs or outcomes that would not otherwise be possible. You must show how other sources of government funding are used for any complimentary activities – this must not duplicate NEIRF activities.
You must show that your procurement process:
- is open and transparent
- shows value for money
- awards the best value bid
- is competitive and goes out to tender (where applicable)
Efficiency in being prepared to go ahead and put necessary arrangements in place to achieve the NEIRF proposal
Your application should describe the extent to which you are ready to achieve your proposal and that necessary arrangements are in place to support this.
We need to know if you have a history of comparable work and that you’ve identified the necessary resources, including stakeholder and beneficiary engagement.
You should describe the following with evidence.
Support from others
Describe what support you will have from stakeholders that are important for your proposal to continue and the beneficiaries who will pay for the ecosystem services produced.
The application assessment panel will consider your description of:
- what engagement work you have already completed and how this will continue during the development and implementation of the proposal
- which stakeholders are happy for the proposal to be developed
- which stakeholders are supporting your application
Details of potential investors may help your application when we assess it.
Include other preparations you have made, for example:
- what permissions, consents, designs and other plans or agreements you have in place or have started
- any work you have done to identify and work with external consultants or technical experts who can help make your proposal capable of producing revenue
- investigation of what legal agreements and new funding structures you need
- dependencies, if any, the investment model would have with other public funding and upcoming legislation, such as to reduce or remove risk in private sector investment
You should include evidence with your application.
Effective and clear path towards achieving intended NEIRF outputs and outcomes
We will assess your application on whether you have effective plans in place to manage and achieve the proposal.
Include the following in your plan:
- details which show that you will achieve the investment case to time and budget
- the proposed management and governance arrangements, including risk and dependency management
- the proposed financial management arrangements
- the proposed resources – including how you will develop and maintain capabilities and capacity
9.5 Monitoring, reporting and evaluation
You should show how the benefits from your project will meet the fund’s aims – with clear plans for measuring, monitoring and evaluation.
We expect to see a realistic and costed plan for evaluation in your application. For example, how your proposal:
- achieves its goals for development or building capacity
- will continue to run and meet longer term environmental and financial outcomes (later stages after investment such as implementation and monitoring are not within the scope of the grant)
- will go beyond meeting the regulatory obligations you must meet
If your application is successful
You must take part in evaluation of the fund for 24 months beyond the completion of the investment case. You will get more detail on this if we offer you a grant.
As part of the grant agreement, we will expect you to:
- report on progress made achieving outputs halfway through the grant period (a midpoint report)
- meet with us to talk about the midpoint report
- produce an end of grant report including the details of the design and structure of the proposed investment or business model
The end of grant report must include details such as:
- how your model is ready to be invested in and carried out, plus plans for ongoing work or management
- details of how you overcame barriers and why certain approaches did not work
- details of any innovative methods, techniques and approaches you developed
- lessons learned from your project
10. Prepare supporting information and evidence
You must gather supporting information and evidence ready to support the information in your application form. We may reject your application if you do not include this information.
You must send copies, scans or photographs – not originals. You should label documents clearly before sending them with your application.
The supporting information we need is as follows.
10.1 Evidence of written support for the project
For example, letters or emails of support from local organisations.
10.2 Evidence of organisation type
- charity registration number
- company number
- public body terms of reference
- HMRC registration
- partnership agreement
- proof of status as a legal entity
10.3 Independent accountant’s letter
Include this if irrecoverable VAT is in the proposal costs.
10.4 Proof of costs
- your breakdown of costs including internal salary cost calculations (based on employee gross salary, employer national insurance and pension contributions)
- your organisation procurement policy that shows the process is open, transparent, competitive and awards the best value bid
- comparisons of proposed costs with similar works to show project costs represent market value
- 3 comparable quotes – you must use the cheapest quote unless you can justify why a higher quote gives better value for money
- the reason for using a single award where you did not use a tender process
- catalogue listings and other related evidence to show the costs are reasonable
10.5 Financial and management accounts
This should be either:
- business accounts for the most recent 3 years of trading
- the most recent tax return (for new businesses without 3 years of business accounts)
- a statement of income and expenses from your accountant (if you’re self-employed or a new business)
10.6 Evidence of permissions
Where applicable, include approval letters, in principle agreements or written pre-application discussions.
11. How to apply
The details you give will form part of your grant agreement if you’re successful.
11.1 Fill in the application form
Download the application form.
If you cannot download the form, email IRF@environment-agency.gov.uk to ask for an alternative format.
11.2 Sign your declaration
Someone of suitable authority within your organisation must sign your declaration.
To sign your declaration, either:
- print the declaration page, sign it in black ink, then email a scan or photograph of the signed page with your application
- send an electronic signature (such as an image file) along with an email from the signatory’s organisational email account confirming they allow the submission of the application form
11.3 Send your application
Email your completed application form and all your supporting information to IRF@environment-agency.gov.uk by 5pm on 26 March 2021.
We will not consider late applications.
We will confirm that we have received your application by email within 5 working days. We will send this to the email address given in your application form.
We will contact you by email if there’s missing information. You will have 10 working days from the date of the email to send this. If we do not receive the missing information, we’ll reject your application.
12. If your application is successful
We will send you a grant agreement to consider. You will get:
- a grant offer letter
- your terms and conditions
- any relevant updates about your application
You then must check your grant agreement. It sets out the terms and conditions of your grant offer and any specific conditions that apply, including:
- the start and end date of your agreement
- the amount of your grant
- your payment schedule
- expected outputs
- the evidence you must give to justify payment claims, such as timesheets, invoices and reports
- what will happen if you do not meet the terms and conditions of your grant
You, or someone from your organisation authorised to enter into a grant agreement, must accept or reject the offer, sign the agreement in line with the instructions in the grant offer letter and return it to us within 10 working days.
We may withdraw or reduce your grant offer if your project changes or costs increase.
The NEIRF runs a SharePoint website that contains more information about the scheme, such as case studies. It’s also a way for the fund to share answers to common questions with potential applicants.
Email IRF@environment-agency.gov.uk if you would like access. You’ll get an email confirming you have been given access within 3 working days.
14. Complaints about service
You can complain if you’re unhappy with the level of service or the way you have been treated. Use the Environment Agency’s complaints procedure.