Natural Flood Management: guidance to undertake natural flood management works

For enquiries please contact the Flood and Coastal Erosion Risk Management team, within the Welsh Government, by emailing: FloodCoastalRisk@gov.wales 

Mae’r ddogfen yma hefyd ar gael yn Gymraeg.        
This document is also available in Welsh.

© Crown copyright 2026      
WG55358     
Digital ISBN 978-1-80853-458-4

The Welsh Government encourages Risk Management Authorities (RMAs) to pursue Natural Flood Management (NFM) interventions and to support this, the Flood and Coastal Erosion Risk Management (FCERM) Business Case Guidance mandates the consideration of NFM for all schemes.

The continuation of the NFM programme aims to accelerate our delivery of NFM interventions to reduce risks associated with flooding or coastal erosion and supports our ambition to manage flood risk at catchment scale. Outputs from this programme will also support in the delivery of the Sustainable Farming Scheme, which will provide farmers optional and collaborative opportunities to deliver NFM.

We aim to further accelerate the delivery of NFM by continuing to offer 100% funding for either the design, delivery, or both, of NFM schemes within this programme. 

Undertaking design work upfront can provide a better idea of scheme costs and ultimately a better scheme, therefore we are content to consider applications for the design element alone for an NFM scheme which you intend to construct within two financial years following design completion. In agreeing funding for design costs which need be completed within the financial year, please be aware of the following:  

• If design and construction can be completed within a single financial year, both phases should be included in the same application. If this is not possible, a separate application should be made for the construction phase in a later financial year. This must be done within two years of completion of the design phase. 
• If the scheme does not move to construction within two years of completion of the design, we reserve the right to claw back the funding provided for this phase. 
• The programme will consist of annualised funding and run from April to March. There is no guarantee the funding will be available in a later financial year for the construction phase. 
• The cost of design and construction combined must not exceed £300,000 per scheme (excluding ‘sunk’ design costs if undertaken in a previous year as a part of the design phase through the NFM programme).
• Design-only works should be completed within one financial year and are limited to £50,000. These costs can be considered ‘sunk’ costs and do not factor into the overall cost of the subsequent construction phase.
• Single year construction, or single year design and construction schemes are limited to £300,000 in total.

This funding does not include for ongoing maintenance, monitoring or compensation payments. However, it can be used for the installation of monitoring equipment.

Compensation costs are not eligible for funding under this programme to avoid the risk of duplicate or overlapping funding, particularly where similar support may be available through other schemes such as the Sustainable Farming Scheme.

RMAs will not be required to provide a contribution towards the costs of delivering NFM schemes, or NFM elements of “hybrid” schemes. However, they may wish to supplement funding to provide additional benefits or seek additional support from third parties who wish to contribute.

Funding decisions may be taken based on a prioritisation of schemes by the benefits they deliver, with as many schemes funded as budget availability allows.  

Grant funding will be awarded in line with the current grant rates for the FCERM Programme.

Work must be undertaken, completed and claimed for within the financial year the scheme is awarded funding. 

The Sustainable Farming Scheme 2026: scheme description was published in July.  This lays out the Sustainable Farming Scheme (SFS) requirements and intended payment rates, so people know what is required if they choose to enter the SFS in 2026.

This is the start of a new long-term programme to support the agricultural industry in Wales. The SFS has been designed to support farmers in the ongoing sustainable production of food, at the same time as addressing the climate and nature emergency. 

The SFS contains a requirement that at least 10% of each farm is managed as habitat. Please see Chapter 3 for details of what can contribute to the 10% scheme requirement. It is necessary to include areas of existing semi-natural habitats and newly created or restored habitat areas on improved land, and possible to include (where required) established areas of broadleaved woodland. NFM intervention areas therefore that align to the habitat types listed and described in Annex 5 will be eligible. It is also worth noting that point features (as opposed to area-based features) such as leaky dams or individual trees are not able to contribute towards the percentage in their own right although the land on which they sit, if existing habitat, would.

As with the Welsh Government’s Flood and Coastal Erosion Risk Management (FCERM) core grant, the NFM fund is only available to Risk Management Authorities operating in Wales. However, we would encourage RMAs to work with any prospective partners and cross policy funding areas to access additional monies to support larger catchment approach and benefits. This could also include Local Authorities or NRW funding third parties to carry out work on their behalf with the RMA applying for and claiming grant funding from Welsh Government.

In line with our funding policy set out in the National Strategy for Flood and Coastal Erosion Risk Management, all proposed NFM interventions must reduce risk to people and properties or maintain their current levels of protection. This aligns with the FCERM core grant. Works need to be economically worthwhile and satisfy all necessary statutory requirements.

To support with ongoing evaluation of NFM schemes, all projects must include post construction monitoring which should be funded through existing revenue grants.

We recognise that quantifying the benefits associated with the delivery of NFM schemes remains challenging. However, recent research has led to the development of more proportionate and consistent methods for estimating NFM benefits, drawing on established UK-wide evidence bases, environmental valuation tools and national flood risk datasets. These approaches are designed to evolve over time as further monitoring evidence becomes available.

Monitoring and data collection therefore remain essential to strengthening the evidence base and applicants should clearly set out how outputs and outcomes will be recorded. This may include a combination of quantitative and qualitative evidence, including appropriate anecdotal or community-based evidence where more formal data collection is not possible or proportionate.

At present, monitoring data is largely collected and held at project or RMA level, rather than within a single central repository in Wales. Welsh Government encourages applicants to adopt consistent and transparent approaches to recording outcomes.

Welsh Government reserves the right to refuse schemes which do not demonstrate a clear and proportionate approach to evidencing value for money.

Expected wider benefits should be included in the application for consideration and to support the application. RMAs will be expected to report progress against wider benefits as the schemes progress.

RMAs are invited to submit applications up to a maximum value of £300,000 per construction and design scheme being delivered in one year, £50,000 for design only in one year followed by a maximum £300,000 available for construction within two years of design only, using the NFM applications on RPW Online.

Larger value schemes remain eligible but should first be discussed with the FCERM team to consider if a separate Business Justification or Full Business Case route is more appropriate.

The programme will be delivered in a similar way to the Small Scale Works Grant with local authorities able to submit multiple applications for schemes; each scheme must be completed and final claim submitted by the deadline in the grant award letter. 
 

Welsh Government’s FCERM priority remains risk to life and all schemes should reduce risk to homes, however the reduced risk to other services or utilities, for example, roads, rail or agriculture may be an additional benefit. Schemes specifically reducing risk to agricultural land, roads or other infrastructure alone would not be eligible.

Compensation costs are not eligible for funding under this programme. This is to avoid the risk of duplicate or overlapping funding, particularly where similar support may be available through other schemes such as the Sustainable Farming Scheme.

Applications for the NFM Fund should be submitted using the form via RPW online for schemes up to the value of £300,000 per construction and design scheme being delivered in one year, £50,000 for design only in one year followed by a maximum £300,000 available for construction within two years of design only. Schemes over £300,000 may still be eligible where they are expected to bring greater benefits but please contact the Welsh Government FCERM branch first to discuss further whether these could be classed as exceptions.

We encourage partnership and cross-RMA working. A catchment scheme may consist of multiple projects which benefit more than one RMA and/or multiple third parties. In this case the application should be made by just one of the RMAs who will act as the grant recipient.

This funding through the capital Flood budget is only agreed for one financial year, therefore schemes should be progressed quickly and completed by the deadline. This should be considered when completing applications, especially for any proposals involving work within watercourses. If a scheme is delayed and is unable to be completed in time, funding may be lost, and there is no guarantee funding will be made available for the scheme in future years.

Current funding is annualised and there is no ability to transfer funding between year. RMAs will be asked to forecast expenditure as part of the application and endeavour to keep to this.

Contract variations will not be allowed as part of this programme due to strict budget restrictions.

Wider benefits beyond flood risk management can be achieved through grant funded works, and these should be considered as part of the application process. While the wider ecological benefits associated with NFM interventions are well established, applications should include a brief summary of the specific benefits associated with the scheme in question. Wider benefits may include:

• Water Quality 
• Engaging with local community groups and the third sector; 
• Education/awareness raising through partnering with residents and schools; 
• Supporting local businesses; 
• Biodiversity improvements; 
• Amenity improvements connected with the NFM project; 
• Using local contractors to carry out these works and develop skills.

Project teams will be asked to specifically report against Welsh Government's Sustainable Land Management Objectives, where they apply These must be included in the applications as set out in the Agriculture (Wales) Act 2023 and listed below:

• Production of food and other goods in a sustainable manner; 
• Mitigation and adaptation to climate change; 
• Maintenance and enhancement the resilience of ecosystems and the benefits they provide; 
• Conservation and enhancement to the countryside and cultural resources and promotion of public access to and engagement with them, and sustaining the Welsh language and promoting and facilitating its use.

All public bodies have to comply with the Well-being of Future Generations (Wales) Act 2015. It is therefore essential that RMAs consider how the proposed works contribute to the well-being goals and the sustainable development principles and evidence this within the applications. Please provide on the application form specific examples of how the proposed work will contribute to the well-being goals rather than just listing the goals.

Additional data collection requirements may also be specified by Welsh Government.

Prioritisation of projects for funding will be based on the benefits they deliver, with as many schemes funded as budget availability allows.

In the event that the programme is oversubscribed, projects will be selected primarily on the basis of cost per property with consideration of the following factors:

• Evidence of actual flood events or near-misses 
• Total number of properties benefiting 
• The estimated cost per property 
• Wider benefits 
• Learning and monitoring opportunities 
• Partnership working 
• Ability to deliver within the 12-month window.

Providing evidence with the application will assist the efficiency of the assessment process.

Evidence to be submitted with application forms must include (where appropriate):

• Maps showing location of proposed works 
• Flood maps showing risk 
• Reference to Local Flood Risk Management Strategies where appropriate

Claim windows will be every 6 months, in line with Quarter 2 and Quarter 4 of the standard FCERM Programme. Claims need to be submitted via RPW online using the existing Natural Flood Management Grant by deadlines listed in your grant award letter.

Where appropriate, any work funded through Welsh Government grants should be branded and show the Welsh Government logo. Costs associated with branding are eligible for grant funding. Interpretation boards and community outreach alongside projects is actively encouraged and will be considered in the prioritisation process. 

Further information can be obtained from the Welsh Government Branding Team: BrandingQueries@gov.wales.

Advice on Working with Natural Processes and NFM Opportunity Maps is available on the Natural Resources Wales and Welsh Government websites.

Further helpful guidance on Natural Flood Management has also been developed by the Scottish Environment Protection Agency in its Natural Flood Management Booklet.

For queries related to any of the Flood & Coastal Erosion Risk Management Grants, please contact the Welsh Government Flood Branch at FloodCoastalRisk@gov.wales.