UK government launches nature recovery reform consultation with nutrient neutrality and environmental impact in focus

Nutrient neutrality has posed a significant challenge for housebuilders for at least five years in the UK, particularly in the South West and South East. It has led to tens of thousands of houses being caught up in the planning system while local authorities in consultation with Natural England have struggled to find appropriate solutions (which have ranged from on-site package treatment plants, to fallowing land in agricultural use, to retrofitting affordable housing stock).

The government launched a working paper on 15 December, entitled "Planning Reform Working Paper: Development and Nature Recovery". It invites views on proposals for "a new approach to how housing and infrastructure development can meet its environmental obligations and contribute to nature recovery" and reflects that the government is "committed to getting Britain building again, at the same time as supporting nature recovery and delivering on the Environment Act" and doing "better than the status quo, which too often sees housing development and nature restoration stall". This is directly relevant to its ambition to build 1.5 million homes before the next general election.

What steps are proposed in relation to environmental impact?

The steps to be taken in relation to environmental impact will include a rapid review of the Environmental Improvement Plan to allow the development of a new, statutory plan to protect and restore the natural environment at the scale and pace that the government believes is needed.

The focus will include:

• cleaning up waterways;
• reducing waste across the economy;
• planting millions more trees;
• improving air quality;
• creating nature rich habitat; and
• halting the decline in species by 2030.

What will this mean for the level of environmental protection?

While the government will not reduce the level of environmental protection provided for in existing law, it believes "it is necessary to revise environmental legislation to establish the proposed new approach. By making targeted amendments to legislation like the Habitats Regulations and the Wildlife and Countryside Act we can deliver improved environmental outcomes. This does not mean moving away from the outcomes envisaged by existing environmental law, but instead involves changing the process of how these outcomes are achieved, allowing us to go further to support nature recovery. These proposals will be supported by the new framework of Environmental Outcomes Reports that will replace the current systems of environmental assessment".

What are the government's main objectives?

Its main objectives are to:

• take a holistic view of nature recovery to secure better environmental outcomes;
• go beyond offsetting environmental impacts and instead use development to deliver positive outcomes for nature recovery;
• improve efficiency and reduce duplication to ensure every pound spent helps deliver our environmental goals;
• make it far easier for developers to discharge a range of environmental obligations, and provide the legal certainty necessary to underpin substantial capital investment;
• give delivery partners the tools they need to generate positive outcomes for nature, empowering them to make the right choices to deliver nature recovery;
• establish a robust and transparent framework to monitor delivery of environmental outcomes; and
• create a lasting legacy of environmental improvement that will promote better public health through increased access to high quality green spaces

What steps does it want to take to meet its objectives?

The government wants to meet its objectives by taking three steps for which the Planning and Infrastructure Bill will provide the necessary legislative underpinning, being:

• Moving responsibility for identifying actions to address environmental impacts away from multiple project-specific assessments in an area to a single strategic assessment and delivery plan. This will allow action to address environmental impacts from development to be taken strategically, at an appropriate geographic scale, rather than at the level of an individual project – while recognising the importance of protecting local communities’ access to nature and green space.
• Moving more responsibility for planning and implementing these strategic actions onto the state, delivered through organisations with the right expertise and with the necessary flexibility to take actions that most effectively deliver positive outcomes for nature.
• In turn, allowing impacts to be dealt with strategically in exchange for a financial payment that helps fund strategic actions, so development can proceed more quickly. Project-level environmental assessments are then limited only to those harms not dealt with strategically.

How will nutrient neutrality be dealt with?

The government has set out an example of how nutrient neutrality is currently dealt with and how it would be dealt with under the proposed new approach. An example provided in the Working Paper, at paragraphs 41-49, is:

"Under the new approach, where development in a specific area is expected to impact a protected site (as is the case for nutrient neutrality), the Secretary of State may determine that a Delivery Plan for nutrient mitigation, operating at catchment scale, would be more effective.

"The Delivery Plan will be based on a strategic assessment of impacts and the interventions required to accommodate an agreed level of development, with those interventions linked to incremental phases of delivery (e.g. 150 houses). The Delivery Plan will also include costings for the interventions, and a draft tariff to fund their delivery. The Delivery Plan would be considered and signed off by the Secretary of State. Interventions identified in the Delivery Plan may commence in advance of development coming forward.

"The individual developer is able to access an online map, in advance of submitting their planning application. This confirms that the catchment is covered by a Delivery Plan. They are also able to access a breakdown of the required contribution.

"With a Delivery Plan in place, developers no longer need to consider the impact of nutrient pollution in their Habitats Regulations Assessment. Instead, competent authorities would be directed to consider whether the development would have any likely significant effects not covered by a Delivery Plan. If there were any effects not covered by a Delivery Plan, those would need to be assessed and, if appropriate, mitigated.

"On submitting a planning application, the developer commits to making a Nature Restoration Fund payment prior to commencement of works – at which point any impacts caused by nutrient pollution from the development do not need to be considered through the Habitats Regulation Assessment. Provided no other impacts are screened in and require mitigation measures, they will have discharged the relevant environmental obligations and are free to progress their development through the planning process in the usual way.

"Using the funds received from developers, the delivery body, working with private providers and other groups, continues to secure the interventions identified in the plan. They deliver 12 interventions in phases, as development comes forward, delivering the required quantum of interventions to ensure positive outcomes over the plan period.

"Interventions are delivered strategically, with a view both to addressing the impact of development and delivering environmental improvements (with money available above and beyond what is required to address the impact of development).

"The delivery body publishes regular monitoring data. If objectives are not being achieved, the delivery plan details ancillary actions to be taken (with future developer contributions to the Nature Restoration Fund adjusted accordingly). If there is overachievement of objectives, actions may be scaled back and the payment reduced.

"This monitoring feeds into wider, business as usual reporting on the condition of the protected Habitats Site and once it can be shown that there will be sufficient environmental headroom to accommodate planned growth (as a result of the actions through the Delivery Plan and any wider action to address other sources of harm), the Delivery Plan may be retired. Developers could then bring forward further development without the need to make a payment since their nutrient pollution is no longer having an adverse effect on site condition. This is in line with current approach, as seen for instance in the lifting of nutrient neutrality advice for phosphorous in Poole Harbour catchment."

Osborne Clarke comment

Nutrient neutrality began to pose a challenge to the granting of planning permission for housing developments following the "Dutch N" case and Natural England's first water quality and nutrient neutrality advice note over five years ago. Our Natural Capital team and Built Environment experts have extensively advised both housebuilders and providers of nutrient neutrality schemes on these issues. We have seen the significant challenge that this has posed both to developers and local authorities alike, and the impact this has had on meeting housebuilding targets and delivering much-needed housing, particularly affordable housing.

There is no doubt that the piecemeal approach to nature recovery objectives, and the need to achieve nutrient neutrality in particular, has been extremely unsatisfactory to all involved and created real uncertainty for those seeking to deliver housing in those places where it is most needed. While frustrating for developers, our team's experience is that they have been sensitive to the underlying environmental issues. However, a sentiment consistently expressed by developers, both in relation to environmental issues and the planning system in general, is that certainty and consistency of policy and approach are key to enabling ambitious housing delivery figures to be met while having full regard to the relevant issues. On the face of it, the three key steps proposed by the government will go some way to addressing these concerns. For nutrient neutrality in particular, a strategic approach will be particularly welcome.