Finding a Solution to the Nutrient Neutrality Problem

I was recently invited to address the No. 10 Policy Unit on the issue of nutrient neutrality, as part of the Government’s intention to unblock the 100,000 plus new homes which have been stalled a result.

The vexing subject stems from a 2018 landmark ruling by the European Court of Justice, in two joined cases related to the EU Habitats Regulations Directive, known together as the ‘Dutch case’ (C-293/17 and C-294/17).

The ruling led to Natural England directing local planning authorities (LPAs) not to approve developments that would add to phosphate/nitrate pollution in watercourses. When, in March last year, this advice was expanded to a total of 74 LPAs, the Home Builders Federation found that an estimated 100,000 homes were put on hold. The impact includes delays to local plan allocations, outline applications, reserved matters, and discharge of planning conditions.

We have seen the ramification in our own work very recently. Boyer is advising Taylor Wimpey and Vistry at Orchard Grove, Taunton. The site has outline planning permission for 2,000 homes on 300 acres but future consents, due to local efforts to mitigate phosphates, are reliant on the developers identifying and implementing a longer-term strategic solution. To date, we have addressed this by fallowing roughly three quarters of the site to deliver the first 500 homes, but in the absence of existing ‘solutions’, future housing delivery will require some form off-site mitigation.

Defra’s Nutrient Mitigation Scheme has established new wetlands and woodlands in partnership with green groups and other privately led nutrient mitigation schemes and enables developers to purchase ‘nutrient credits’ to discharge the requirements to provide mitigation. While it goes some way to addressing the key causes of problem, but the solutions are long term.

Consequently there is a requirement on local authorities and developers to implement mitigation schemes quickly. Currently locally-based credit schemes are only available to small developments and SMEs: developers of larger sites are forced to seek their own phosphate mitigation.

Achieving this is through off-setting, such as creating wetlands, woodlands and fallow habitats, rewilding, SUDSs, again, is far from ideal, as it results in the removal of significant swathes of viable agricultural land from production. Furthermore, if it is taken into account by the planning process, homes can receive planning consent and be built – but can’t be occupied until the off-setting is in place.

Other solutions include a legal duty on water companies (announced in July last year) to upgrade wastewater treatment works in ‘nutrient neutrality’ areas. The issue here is the timing: water companies operate on a five yearly asset management plan (AMP). The current AMP is 2020-2025, and so allocating the investment for this change will not take place until the 2025-30 AMP. Some discussion has considered the Government funding the necessary structural changes, but this seems highly unlikely following the privatisation of the water industry.

Other solutions include developers providing private water treatment plants but inevitably there are limitations attached to this too, in the form of cost, land availability.

Our view is that in the short-term the problem can only be solved by directing LPAs towards a consistent and sensible interpretation of the habitat regulations; and importantly an interpretation of the habitat regulations which is proportionate to the scope of what is open for consideration. For example, a housing development which is held up by an application to discharge a condition relating to details for tree root protection zones should only need an Appropriate Assessment that is concerned with that single issue, within the parameters of the permission already granted. The  Appropriate Assessment should not have to re-consider the effects of the development proposal all over again.

Einstein defined insanity as “doing the same thing over and over and expecting different results.” That is exactly what is happening with the current interpretation of the habitat regulations, and we are trapped in a never-ending circle of re-appraisal of development schemes every time a new condition, or reserved matter, is submitted to be discharged to a LPA.

Approaches taken by LPAs varies considerably: Cornwall, Winchester and Durham for example, interpret the regulations to apply at the stage when planning permission is sought, thereby allowing Reserved Matters submissions and planning conditions which are already in the pipeline to be approved and housebuilding to begin. But many other LPAs have adopted a more cautious approach, requiring all Reserved Matters and conditions to demonstrate nutrient neutrality before they are approved. Most developers are unable to do so for the reasons outlined above, hence the planning moratorium continues.

The current situation has understandably been described as a postcode lottery, with reasonably priced credits available in some areas but a scarcity and higher prices in others.

In her short time as PM, Liz Truss resolved to scrap the ‘Brussels red tape’ to free up the planning system. But although it originates in EU legislation, Habitats Regulations are now enshrined in UK legislation. Therefore changes to the Levelling Up and Regeneration Bill are required to deliver this, and of course a mere ‘scrapping’ of the Regulations is likely to be met with vociferous opposition.

The best immediate action that the Government can take is to end the ‘postcode lottery’ by issuing clear directions to LPAs, to clarify the interpretation of on the regulations and housebuilding to resume as far as possible.

In the absence of such action, the Government will fail to deliver on its key priorities of levelling up through regenerating large scale sites in the Midland and the north, resolving the housing crisis and, in doing so, boosting the economy.