The initial, partial account includes detailed management costs and commercial returns from the estate alongside a valuation of the benefits to society such as recreation and climate regulation. More functions that may offer significant higher value, such as air and water, and flood risk mitigation, need further research before being included.

The  value  of  the services  delivered  by  England’s  woods  and  forests  is estimated to be £11.9bn. Over 95% of this value is as a result of the benefits it provides to society, for example through recreation and climate regulation. This value is not captured in traditional financial accounts. 

The national capital account framework presents a forward looking perspective to understand the  value  of  natural  capital  assets.  It  provides information  in  an  accounting  format  that  can  inform  strategic  and  business decisions concerning ongoing and future management of natural capital.

The long-term value of natural capital assets and liabilities are calculated at a discounted rate of the expected future values into perpetuity. The final balance sheet brings together the data provided by the supporting schedules (asset register, physical flow, monetary and maintenance accounts) and provides an overall view of the capital value of the assets.

Simon Hodgson, chief executive of Forest Enterprise England the Agency manages England’s national woods and forests said: ‘The natural capital account begins to show the full value of the benefits derived from the land we manage.

'We know this first step needs developing and will work with others to refine existing estimates and expand the coverage. Without these refinements we know the indicative £11.9bn value is likely to be an underestimate of the full value. We see this as providing an order of magnitude valuation based on best data available and should be interpreted as such.

‘As we move forward, I see this becoming a valuable strategic management tool complementing our decision-making processes, allowing us to track the condition of natural capital and its value to help us understand the values and trade-offs in maintaining the full value of England’s woods and forests.’

The account uses the Natural Capital Committee’s agreed framework, which was developed with Eftec, the Royal Society for the Protection of Birds (RSPB) and PwC to develop a framework to guide the development of natural capital accounts.

The Natural Capital Committee, chaired by professor Dieter Helm, was set up in 2012 to provide advice to government on the sustainable use of natural capital.

A copy of Forest Enterprise England’s Corporate Natural Capital Account is available here