Green light given to uncapped variable monetary penalties (VMPs) and their extension to environmental permitting regime

England and Wales


On 12 July 2023, DEFRA published its response to its recent consultation containing proposals applicable to England to (a) amend or remove the cap on VMPs – one civil penalty among a wide range of civil sanctions and traditional criminal sanctions which may be imposed for a breach of specific environmental offences – and (b) enable the Environment Agency (“EA”) to impose VMPs for alleged breach of the Environmental Permitting (England and Wales) Regulations 2016 (the “Environmental Permitting Regulations”)

Our commentary on the April 2023 consultation can be found here.


DEFRA has confirmed that it will remove the current £250,000 cap under the Environmental Civil Sanctions (England) Order 20210 for VMPs and introduce VMPs as one of the civil sanctions available to the EA to impose for all offences under the Environmental Permitting Regulations. These changes will only take effect in England.

To that end, the draft Environmental Permitting (England and Wales) (Amendment) (England) (No. 2) Regulations 2023 (the “Draft Regulations”) and draft Environmental Civil Sanctions (England) (Amendment) Order 2023 (the “Draft Order”) were laid before parliament. As drafted, the Regulations and Order will come into force on 1 December 2023 and will only apply to offences committed on or after that date.

DEFRA has also announced that money raised from VMPs imposed on water companies will go towards the new Water Restoration Fund. (Albeit VMPs will be applicable to a range of industries).


The announced changes are broadly aligned with the views expressed by the consultation’s respondents. The majority of the respondents (88%) supported changing the existing VMP cap and majority of respondents (63%) chose the removal of the cap as their preferred option. A large majority of respondents (85%) also agreed that VMPs should be introduced into the environmental permitting regime.

The waste and resource management and energy sectors, being those amongst the most likely to be directly impacted by the changes, expressed the least support for these changes.

One potential concern for operators is that the removal of the cap will make it more difficult to set VMPs at a proportionate and reasonable level. DEFRA has announced that it will work with the EA and Natural England to ensure that their public enforcement guidance is updated to reflect the legislative changes and that VMPs will not be imposed under the Draft Regulations or Draft Order until their guidance has been updated. However, it is not precisely clear how the guidance will be updated and what checks and balances to ensure that the amount required to be paid under a VMP will remain reasonable and proportionate notwithstanding the removal of the cap. In any event, there may be greater reliance on upfront expert evidence to ensure that the assessment of harm or culpability has been made on a sound, objective scientific basis.