Defra announces proposals to change abstraction licences without compensation

An irrigation sprinkler head close-up

Defra has published proposals that would give the Environment Agency greater powers to change abstraction licences without having to compensate the licence holder.

The announcement follows its earlier consultation ‘Improving our management of water in the environment’, and indicates that the forthcoming Environment Bill could be used to enable those changes.

The government intends to:

  • Bring forward legislation to give the Environment Agency powers to change licences (both ‘unsustainable’ and ‘under-used’ licences) without compensation, for licence changes made on or after 1 January 2028
  • Grant powers to change or revoke unsustainable abstraction licences without compensation in all types of WFD water body, including surface and groundwater bodies, heavily modified water bodies and artificial water bodies.
  • Grant powers to change or revoke under-used abstraction licences without compensation where the licence has been consistently under-used by more than 25% (actual volume used less than 75% of licensed volume) over a period of 12 years
  • Encourage the Environment Agency to build on recent approaches to finding environmentally sustainable solutions to water scarcity wherever possible by, for example, developing water trading as a way of improving access to water and by giving abstractors flexibility to manage their water resources
  • Consider how to address the need for grants for farmers to invest in their own water resources thereby reducing their reliance on abstraction
  • Retain the current appeals mechanism which operates when abstraction licences are varied or revoked

The NFU expressed strong opposition to Defra’s proposals during the consultation process earlier this year. It believes that, if implemented, they could have a major impact on abstraction licences used to grow food.

NFU water specialist Paul Hammett said that well-established abstraction licences represent a long-standing property right and valuable business asset, and argued that compensation should be available to abstractors whose permanent rights are changed.

He said:

“The degree of certainty provided by an abstraction licence is important for food producing and manufacturing businesses. For example, business confidence and investment decisions are often made over many years in the knowledge that permission to abstract has been carefully considered and approved by the regulator."

NFU members: Download a full briefing on the proposals here

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