Nutrient neutrality is a requirement for new housing developments and those facilitating overnight stays, such as hotels and student accommodation, being brought forward in the vicinity of vulnerable watercourses to not increase phosphate and nitrate levels beyond existing levels. It was first introduced to address environmental concerns as to the impact these pollutants were having on freshwater habitats through the deoxygenation of water and the consequential harm this was causing to wildlife and plants.
The requirement places an embargo on local planning authorities being able to grant planning consents, discharges of conditions or reserved matters approvals until in-perpetuity mitigation solutions can be shown to have been put in place and proven to work. Currently 74 local authorities are subject to the requirement.
What has been the industry reaction?
Nutrient neutrality has been contentious with developers, with the feeling that, due to a lack of viable solutions and mitigations, the requirement has acted as a block to developments coming forwards. There are also concerns the calculation methodology circulated by Natural England overestimates the increase in population which each new home will bring, resulting in the amount of mitigation required being overstated. As a result, in May 2022 the Home Builders Federation estimated that there were approximately 120,000 new homes being delayed.
This is at odds with the government’s aim of bringing forward new housing and is described by a number of housing associations as having a huge impact on their ability to deliver new homes to those who need them the most.
What is being done to address these?
The government is introducing a new nutrient mitigation scheme, which will enable developers to purchase government-backed credits (similar to the credits which may be purchased where biodiversity net gain cannot be provided onsite), using the revenues raised to invest in new and expanded wetlands and woodlands. This will enable nutrient neutrality to be achieved, allowing local planning authorities to grant planning permission for new developments in affected areas. It is intended for conditions to be attached to planning consents in the affected areas to ensure that any credits are purchased prior to occupation.
In addition, the Levelling-up and Regeneration Bill will impose a legal duty on water companies in England to upgrade wastewater treatment works to the highest achievable technological levels by 2030 in nutrient neutrality areas. The Bill also sets out that when making an appropriate assessment for the purposes of the Habitats Regulations, the local authority is to assume the wastewater treatment works will meet the relevant pollution standards by the upgrade date. This should help to address the problem in the long term and reduce reliance on credits.
Do the measures go far enough?
The combination of these measures should help to unlock developments and ensure that much-needed affordable housing can come forward in affected local authority areas. In November 2022, the government announced it was preparing to launch its mitigation scheme in Tees Valley in the North East and that it would be prioritising affordable and social housing as well as small developments where demand for credits outstripped supply. However, it remains to be seen if housing associations and other social housing providers will be able to absorb these additional development costs.
In addition, with mitigation schemes expected to come forwards at different paces, certain local planning authorities may continue to experience backlogs for some time. As at November 2022, only two schemes had been announced, both within the Tees catchment – and it is unclear when government-backed schemes in the other affected areas will be brought forward. Developers remain able to implement their own mitigation schemes if they so wish, but it can be assumed that much of the housing backlog is comprised of developers which have so far been unable to do so.
It should also be noted that on the face of it, the measures themselves do little to address the root causes of phosphate and nitrate pollution, the main contributor to which is widely accepted to be farming practices. However, outside of a government-backed scheme, the ability to sell offsite credits to developments does offer an opportunity for farmers and landowners within affected areas to convert their land so as to provide mitigation habitats. This can help to provide a revenue stream to landowners and provide an incentive to remove land from high nitrogen uses, helping to address the root causes of pollution. A number of schemes are already up and running.
Finally, the requirement for water companies to reduce pollution significantly by 2030 should help to address part of the problem at source, reducing the need for a neutral approach for development. The government’s initial estimates indicate that overall there should be approximately a 75% and 55% reduction in phosphorus loads and nitrogen loads respectively in total from wastewater treatment works, although this will vary between individual catchments. The hope is this will make a sizeable impact on the pollution problem. However, although this is promising, the upgrade is still some way off and so it looks as though developers will still be reliant on mitigations in the near future.
While we await these new schemes there is a risk that consented schemes might expire. It is, in this context, important to consider the availability of interim solutions in variation of conditions or in the implementation of the authorised development. This presents some significant challenges in a Habtitats Regulations assessment context but solutions are available and need to be carefully tailored to address the terms of each scheme.
Naomi Bull is an associate and Kate Radford is a senior associate at Eversheds Sutherland
