Environment secretary Steve Barclay has issued a ministerial direction authorising the creation of an aid package to help the South West fishing industry deal with restrictions on catching pollack.
The measures will see around 50 boat owners directly compensated because of a "zero" total-allowable-catch for the fish in Western Waters, called for by the International Council for the Exploration of the Seas.
The advice, which is designed to ensure long-term security of pollack, means the fish cannot be directly targeted by crews.
The Department for Environment, Food and Rural Affairs said the compensation package was aimed at those boat-owners who have historically relied on pollack for at least 30% of their fishing income. It follows other measures to help fishing crews affected, including a share of £6m in grant funding from the Fisheries and Seafood Scheme and the opportunity to take part in a new scientific study.
Defra added that the operators the scheme is targeting typically used boats of 10m and under and fished using handlines. The department noted that the latest restrictions had caused some vessels to halt operations and lose all of their income.
Defra permanent secretary Tamara Finkelstein sought a ministerial direction from Barclay to authorise the compensation package.
Her letter to the secretary of state suggested that the proposals fail to meet the value-for-money criteria set out in HM Treasury's Managing Public Money and Green Book guidance – which departmental accounting officers are answerable to parliament for obeying.
"Previous compensation schemes for the fishing industry were to prevent a sector-wide collapse at a time when that sector had limited opportunities to diversify," she said.
"But in this instance many fishers will have alternative income streams available, including publicly funded benefits payments, or the ability to diversify, enabling them to remain in business."
Finkelstein added: "It might also be repercussive and set an unhelpful precedent for industry expectations for additional compensation schemes, thereby opening the department up to unknown future claims for the next zero TAC stock/s."
Issuing his direction, Barclay said he was satisfied that there are compelling reasons for the compensation scheme, which he said was "uniquely" justified for a sector with a "limited ability" to diversify.
"From discussions with industry and the members of parliament for the affected area, there was an expectation of a reduction in quota, as had happened in previous years, but not a move to zero in one move," he said.
"Confirming a move to zero in December gave less than a month for any mitigation."
Barclay said that many of the smaller inshore boats that targeted pollack were not equipped to go further out to sea – and for longer periods – to target other species of fish and so needed "significantly more time and support to diversify".
He added that there were also benefits to retaining boats that could target pollack for the future.
"What is needed is to give the boats and industry time to adjust to the immediate loss of quota so we do not lose these vessels permanently from the industry," Barclay said.
The scheme will be administered by the Marine Management Organisation. Eligible boat owners will receive compensation equal to half of the total value of pollack landings they made in 2023.
Defra said income will be verified using landings data held by the MMO.