The review is part of a rolling programme across government to examine non-departmental delivery bodies every three years. In the past, the two agencies have been reviewed separately. But this time they have been reviewed together, with the document making clear that DEFRA sees strong arguments for a merger.
Discussing a potential combination of the two agencies, it says: "This scenario should in time provide a more efficient, effective single body, leading to sustainable swifter decision making for, and lower burdens on, businesses and developers".
However, it acknowledges that a merger could, in the short to medium term, involve "significant" potential costs and affect incident response capacity. The paper also looks at the pros and cons of keeping the structural arrangements of the agencies as they are.
The merger suggestion was welcomed by Clive Harridge, director of consultancy Amec Environment & Infrastructure UK. "To have one statutory consultee not two in the field would be very helpful for our private sector clients," he said. But he said that the challenges of merging the two organisations would need to be managed effectively.
Keystone Law consultant solicitor David Brock echoed the comment. He said the merger could potentially simplify the process, but would depend on breaking down boundaries between the "very scientific, very pure" Natural England staff, and the "more practical" Environment Agency team.
In a statement, environment secretary Owen Paterson said that he was looking for changes "that would lead to better results for the environment, economic growth and for people right across England".
The RSPB opposes the merger, which it said would leave threatened species in our countryside without an independent statutory champion. The Campaign to Protect Rural England agreed. Ben Stafford, its head of campaigns, said: "There is a real danger that the voice of Natural England as an independent voice for the natural environment, and as champion for our matchless landscapes, could be muffled within a larger single body".
He also warned against asking the agencies to drive economic development. "It is wholly understandable that the Government wants to promote economic development, but it needs to remember that it is not the primary purpose of either Natural England or the Environment Agency to do that," he said.
DEFRA said that preliminary conclusions of the review, which applies to England only, would be published in the Spring. They will then be examined by a group chaired by Civil Aviation Authority chair Dame Deirdre Hutton.
The Environment Agency's responsibilities include reducing flood risk, ensuring adequate water supplies, protecting air, land and water quality and applying environmental standards for industry.
Natural England's purpose is to conserve and enhance the natural environment.