FCERM funding reform: Understanding what matters to risk management authorities and where JBA can help
Defra is rolling out a simpler, more transparent and strategically focused funding system for flood and coastal erosion risk management (FCERM) in England. As organisations across the FCERM sector are working to understand what the reforms mean in practice, read on to find out how we can help you navigate the transition with confidence.
Understanding the new FCERM funding reforms and what they mean for RMAs in practice
From 1 April 2026, Defra will introduce a reformed system for funding FCERM projects in England. The changes promise a simpler, more transparent and more strategic approach to investment – all part of the Government’s £10.5bn commitment to resilience over the coming years.
With the first tranche of guidance issued on 3 March 2026, organisations across the FCERM sector are now working to understand what the reforms mean in practice. Below, we summarise the implications for Risk Management Authorities (RMAs) and highlight how we can help you navigate the transition confidently.
Why funding is changing?
Defra’s aim is clear: a process that is proportionate, efficient and easier to use, with standard tools and national datasets reducing the administrative burden on project teams. Moving away from complex risk bands and formula-driven thresholds, the new policy prioritises:
- A streamlined, more accessible funding journey
- Clearer rules on scheme classification and entitlement
- A transparent ‘return on government investment’ calculation for prioritising projects
For RMAs under pressure to deliver more, faster, this represents a major shift toward clarity and consistency.
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Funding levels now depend on project type
The new classification rules determine how much government funding is available:
- Refurbishment of existing assets – 100% funded
- Replacement or new/improved assets – 100% funded up to £3m, then 90% thereafter
This places greater emphasis on extending asset life and ensuring existing infrastructure can continue to protect communities effectively.
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Prioritisation through value for money
Projects will be assessed on their societal benefit relative to FCERM funding required. Strategic priorities include:
- At least 20% of national investment directed to the most deprived communities
- Significant uplift in natural flood management (NFM) investment over the next decade
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Wider range of eligible projects
The updated rules confirm eligibility for a broad range of interventions from fluvial and coastal schemes to SuDS, NFM, and Property Flood Resilience (PFR).
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Exemptions to eligibility
Some projects are exempt from standard eligibility rules. These include:
- Nationally significant infrastructure projects.
- To allow the Environment Agency to meet their statutory obligations as an asset owner, actions identified in a Reservoirs Act 1975, Section 10 inspection report or the habitats compensation restoration programme (HCRP) are also exempt.
RMAs should identify these projects early to ensure correct procedures and funding routes are followed.
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Applications are moving to GOV.UK
From 1 July 2026, all FCERM funding applications will be submitted through a new centralised GOV.UK portal, with more practical details expected from the EA in April.
What this means for your current projects
If you're already developing a business case or seeking funding, now is the moment to review:
- Prioritisation – consider whether your scheme is maximising benefits and contributions.
- Scheme classification – could your preferred option now qualify as a refurbishment and unlock 100% funding?
- Opportunity for NFM/PFR integration – these benefits count fully within the new value-for-money framework.
- Partnership funding – can you increase your partnership contributions to boost the project’s priority within the national programme?
- New assessment tools – these are now available to help streamline delivery and include the EA Rate Tool, PFR updates and the NFM benefits tool.
How can we support you through the funding reform?
We’re not just interpreting the guidance – we’re helping to shape it.
We played a direct role in developing the tools and methodologies central to the new system. That means our teams understand the policy intent, the practical implications and the nuances that matter when preparing a successful application.
- Information and data – we have developed the data supporting the application process, such as National Flood Risk Assessment 2 (NaFRA2) and are well placed to provide and understand information.
- Strategic project classification – we help you understand where your scheme fits within the new framework and how to position it for the most advantageous funding route, from identifying refurbishment opportunities to reframing scope to maximise eligibility.
- Business case development under the new rules – our economic appraisers and business case specialists can prepare the new simplified application materials, so that your benefits, property counts and ‘value for money’ cases are robust, compliant and compelling.
- NFM and PFR expertise – as national leaders in NFM and community resilience, we bring deep technical expertise in designing, evidencing and valuing these interventions. With NFM now a priority within the FCERM programme, this is a major opportunity for RMAs. We developed the new NFM tool, so we have first-hand knowledge of the heat maps and tools proposed.
- Strengthening scheme prioritisation through benefit optimisation – we work with clients to optimise scheme benefits within the new value for money framework. This ensures that proposed options fully capture eligible outcomes and are framed to perform strongly in national prioritisation. This includes integrating complementary measures, refining option scope, and ensuring benefits are evidenced clearly using standard tools and datasets.
- Training and tailored support – we are updating the training courses we offer on business case development and economic appraisal to reflect the new changes. We can also offer tailored support to help your teams understand the funding reform, adapt your pipeline and build strong funding submissions.
If you're preparing a business case, reviewing your programme, or simply want clarity on where your projects sit under the new policy, our team is here to help.
Contact Andy Oland for tailored advice.
