What might the UK government's Nature Restoration Fund and Environmental Delivery Plans mean for developers?

On 11 March 2025, the Planning and Infrastructure Bill received its first reading in the House of Commons. The bill forms a key part in the UK government's strategy to stimulate economic growth by supporting the delivery of 1.5 million homes in England.  

Under current rules, developers can be required to mitigate or compensate certain environmental harms to some protected sites and species before planning approval can be granted. This approach can be costly and delay, or even entirely block, projects from proceeding. The bill proposes to enable infrastructure builders to meet their environmental obligations faster and at a greater scale by pooling financial contributions to fund larger strategic interventions for nature.   

Plans for implementation

To pool funds, the government proposes to establish a Nature Restoration Fund (NRF), which developers will be able to pay into. The regime is structured in a similar way to the Community Infrastructure Levy. A delivery body, such as Natural England, will utilise the funds by taking responsibility for securing positive environmental outcomes. This will be done through Environmental Delivery Plans (EDPs), which will set out a package of measures to address the conservation impact of a single development or by combining resources from multiple developments, facilitating environmental improvements as well as secondary benefits such as public access to green spaces.

EDPs will also determine the amount of nature restoration levy payable (which will be a "simple charging schedule", tailored to the development to which it applies) and the environmental obligations that are discharged, disapplied or modified by payment of the levy.

Different EDPs will be aimed at different scales. Some will pool resources from multiple developments and deliver conservation measures at scale. Others could be directed at a single, large development. They may be used to cover relevant environmental impacts, such as nutrient neutrality, for a specific infrastructure project, and tie into better strategic planning where they could de-risk projects and speed up economic and nature growth..

Impact on developers

The government aims to remove the burden on developers, who will no longer need to provide detailed analysis and mitigation proposals in relation to the environmental impact of their projects as the obligation to mitigate will be discharged by making a payment to the NRF.

Although developers will still have to calculate the payment due, which may involve a technical analysis by reference to published metrics, they should only need to undertake environmental surveys of their sites if a specific harm cannot to be mitigated by the EDP. Another potential upside of the new proposals is that they will simplify the user experience for developers, by streamlining documents across multiple development sites and moving away from assessing the environmental impact of each development on a site by site basis.

Crucially, by offering a clear mechanism for offsetting environmental impacts, the new rules could avoid the need for costly, time consuming and sometimes prohibitive on-site mitigation. However, on-site mitigation of harm has not been removed in its entirety and may still be required where an EDP is unable to compensate for a specific harm.

While the geographically wider lens of EDPs is likely to streamline the process for developers, as multiple sites are encompassed within one plan, scenarios may arise in which a developer could be paying a costly levy to mitigate impacts of a neighbouring project on a protected site which is not directly affected by its development.

If a developer is unhappy with a proposed EDP, amended EDP or the secretary of state's decision not to make an EDP, there would be an opportunity to challenge this. However, this would require judicial review proceedings to be brought in the courts within a six weeks of the relevant decision. While a right to appeal a levy calculation is also possible, the complexity and cost of this is currently unclear and will be set out in regulations following the bill's passing. This may, in turn, become a sticking point in the planning process if developers cannot agree over the measures offered by the EDP, if an EDP is not offered in relation to a particular development or if a developer feels aggrieved by a levy calculation.

Osborne Clarke comment

The NRF and EDPs are the government's attempt to unblock the delays that developers face within the planning system while also maintaining a commitment to nature recovery. The new approach should streamline the process, speed up planning approvals and overcome the intractable problems faced when complex environmental issues are caused by a project's impact on protected sites and species. A standardised financial contribution may also help developers better estimate costs in advance.

Being able to deliver environmental improvements on a larger scale and in more strategically significant areas could also result in tangible benefits to nature.

However, as always, the devil is in the detail. The rates required by the levy are, as yet, unknown and it may be that on-site mitigation is a cheaper option for a development site than paying the nature restoration levy. In some cases, such as in relation to a particular development or for certain environmental features and impacts, developers will not be given the option to opt-out of the levy (although it is not yet clear which particular circumstances will fall into that category and how often that will be the case).

The establishment of an NRF and payment into it by developers has been criticised by some environmentalists as potentially running roughshod over the current requirements of the Conservation of Habitats and Species Regulations in terms of an assessment of the impacts of a development on protected sites and the timing of mitigation. For example, if a threshold of funds will be required before a scheme under an EDP can be implemented to achieve the desired mitigation, this may delay mitigation. Also, a mitigation scheme may not come forward at a time that mirrors the point at which environmental impacts of a project commence, meaning that further harm occurs and EDPs may not have taken account of that harm. Developers will have to consider whether or not this is an acceptable outcome for their businesses.

The success of these measures will therefore depend on the level at which levy rates are set, the extent of any mandatory participation and the clarity and effectiveness of the EDPs in addressing specific environmental impacts, particularly the timing of them. As the details unfold, developers will need to stay informed and be prepared to navigate changes within the planning system.

Osborne Clarke's Planning and Environment Team is at the forefront of advising on these issues. Please get in touch with the experts below if you wish to discuss the implication of the NRF and EDPs for your project.

This Insight was drafted with the assistance of Fabian Trotman Drake, trainee solicitor.