The Marine Recovery Funds Regulations 2025:  impact assessment - RPC opinion (green-rated)
Source: gov.uk (2025-11-28)

The RPC's opinion relating to the Department for Environment, Food and Rural Affairs' impact assessment for The Marine Recovery Funds Regulations 2025, laid before Parliament on 25 November 2025

The legislation enables one or more marine recovery funds (MRFs) to be established, contributions to which are optional, to deliver strategic compensatory measures on behalf of offshore wind (OFW) developers, to compensate for damage to habitats and species from their activity on protected sites. Delays to OFW developments have a negative effect on the overall impact of OFW projects and decarbonisation. The legislation will help to accelerate the planning and consenting process for developers, as individual projects could be compensated using approved compensation measures, which will be listed in a library.

As required under the current Better Regulation Framework, the RPC produced an opinion on an earlier options assessment (OA) version of the final impact assessment (IA) (https://www.legislation.gov.uk/ukia/2025/216/pdfs/ukia_20250216_en.pdf) that has now been published by the Government.

The OA, which the RPC scrutinised, presented a good summary of the expected impacts on all key areas, and provided sufficient evidence of the problem under consideration, to support the rationale for intervention. It identified and monetised the impacts of the proposal, estimating a net present social value (NPSV) of £2.4 billion - largely driven by benefits from carbon savings - across a 25-year appraisal period, to justify the preferred way forward. It could, however, have explained further the data sources that drove the calculation, and expanded the monetisation to include details of the impact of the charge to developers. It could also have considered total welfare impacts that would arise from improving the protection of the marine environment, and how the prices of the strategic compensation measures will be set, and considered any risks to the environment as a result of the measures. The OA explained that existing data sources will be used to underpin the post-implementation review but it could have explained the nature of data to be collected. The Department should outline any research questions that it aims to address and answer through future data collection.

The estimates of impact included familiarisation costs and benefits from carbon emissions savings. The reduced planning and consenting period will also result in a reduction in fees paid by developers, and this has been documented as a transfer impact from government to industry. The OA also considered non-monetised impacts, such as reputational benefits and the benefits to the marine environment. The OA could have provided further qualitative explanation of this key benefit, alongside any rough estimates to indicate its potential scale. The OA states that the MRFs are intended to be self-financing, with the charge to developers for using them designed to cover their operating costs. The OA would, therefore, have benefitted from identifying fully the scale of this charge and monetising the impact on developers using them.

The OA indicated that the proposal would have a positive impact on business, presenting an equivalent annual net direct cost to business figure of -£76 million (2024 base year). This consists largely of option fee savings received by businesses. The OA explained that there are no additional costs for developers using the MRFs, compared to ‘business as usual’ costs, as they are not expected to increase the cost of compensation. However, the OA also indicated that stakeholders have considered the cost of compensation. It would, therefore, have benefitted from considering further how the prices of the strategic compensation measures will be set, and if there will be any negative impacts faced by business if the costs for them increase as a result of the proposal. The Regulatory Policy Committee rated the OA as fit for purpose; green-rated.