Nutrient neutrality

Rory Stracey and Tim Brown run the rule over recent developments in relation to nutrient neutrality.

For several years now, planning applications in large swathes of the country have been put on hold because of "nutrient neutrality" laws that prevent local authorities from granting planning consents where development would have an adverse impact on protected habitats.

These "nutrient neutrality" laws stem from a ruling from the European Court of Justice in what is known as the Dutch Nitrogen Case in 2018 and have been applied into English law through guidance issued by Natural England (NE Guidance) that was most recently updated in March 2022. The NE Guidance asks local planning authorities not to approve developments that would add to the nutrient pollution in watercourses in protected habitats where the protected site in question is already deemed to be in an “unfavourable condition”. The effect of the NE Guidance has been to stall the development of new homes in various areas around that country that may impact protected habitats.

The Department for Levelling Up Housing and Communities (DLUHC) recently announced the scrapping of these “defective EU laws” relating to 'nutrient neutrality'. The nutrients in question, nitrogen and phosphorous are essential for growth of living organisms. However, excessive release of these nutrients leads to increased algae growth, creating pollution which results in loss of natural habitat and bird species. Release of these nutrients can come from a number of sources including agricultural practices, runoff from urban areas and lawns, leaking septic systems or discharges from sewage treatment plants. Therefore, more housing can mean more phosphates and nitrates being released.

DLUHC wanted to scrap these environmental protection laws (which, following the UK's departure from the EU have been incorporated into UK law) so that planning permissions can be granted even where it would have an adverse impact on protected habitats. These proposals were defeated by the House of Lords and will not come forward in their current form.

However, they are likely to come back in some form. With this issue being a key battleground for the upcoming 2024 election, we look at what the amendments were and the possible implication of the changes.

Legislative changes

The change in law was proposed to be achieved through amendment to the Levelling-Up and Regeneration Bill, currently going through parliament, which in turn would have amended the Habitats Regulations 2017. They key provision (new Regulation 85A(2)) stated:

"When making the relevant decision, the competent authority must assume that nutrients in urban wastewater from the potential development, whether alone or in combination with other factors, will not adversely affect the relevant site."

Essentially, planning authorities would have been directed to assume that additional nutrients in urban wastewater arising from any proposed development would not harm protected sites.

The changes would have affected the existing system of appropriate assessments under the Habitats Regulations. Currently if a proposed plan or project (including planning applications for development) is considered likely to have a significant effect on a protected habitats site then an appropriate assessment of the implications for the site, in view of the site’s conservation objectives, must be undertaken. In line with NE Guidance appropriate assessments are needed "where a likely significant effect (alone or in-combination) cannot be ruled out, even where the proposal contains mitigation provisions". Proposed new Regulation 85A(3) would have removed this requirement:

"Accordingly, a potentially adverse effect on a relevant site caused by nutrients in urban wastewater, whether alone or in combination with other factors, is not a ground for the competent authority to determine that ……. (a) an appropriate assessment is required by regulation 63(1) or 65(2), or……"

A particularly noteworthy element of the proposed amendments was Regulation 85A(4) which states that the assumption (that nutrients will not adversely affect a protected site) must be made even if a finding to the contrary is made by an appropriate assessment or by Natural England or by any other body.  Therefore, even where it can be demonstrated that development will adversely affect a protected site, the planning authority would still be required to assume it will not. This is in drastic contrast with the current law set out in the NE Guidance which states planning authorities should "only grant permission if they have made certain at the time of Appropriate Assessment that the plan or project will not adversely affect the integrity of a habitats site i.e. where no reasonable scientific doubt remains as to the absence of effects".

Whilst these specific changes will not come forward in the Levelling-Up and Regeneration Bill it is possible DLUHC may seek to bring forward these changes in another form in coming months.

Effect of the changes

The existing NE Guidance applies to 74 local authority areas, and it is estimated by the Home Builders Federation that this has resulted in consent for over 100,000 new homes being held up due to nutrient neutrality issues. Currently, to obtain planning permission developers must carry out numerous assessments and agree to mitigation schemes, which are often costly and complex. Developments that have not overcome (or sought to overcome) the nutrient neutrality issues through mitigation have been stuck in the planning system (or pre-planning) waiting for a resolution to this issue.

If the proposed changes were implemented authorities would no longer need to hold up these applications. carry out appropriate assessments or agree site / area specific mitigation schemes. This would undoubtedly lead to a significant increase in planning applications being approved in the areas subject to NE Guidance, where relatively few applications have been processed in recent years. Land that has been banked in these areas pending a resolution to the nutrient neutrality issues may also come forward for development.

Possible implications

Affected local planning authorities may have felt relieved to have a resolution to this long standing and controversial issue, given that so often they have found themselves caught in the middle between frustrated developers and the NE Guidance.  It would also be a welcome boost for the housing delivery and housing land supply of the authorities in question whose figures will have been badly hit by the issue.  Nonetheless the position may in time become less comfortable as they are forced to approve development against NE Guidance, risking harm to watercourses, particularly in cases where evidence shows a harm which must then be ignored by virtue of new Regulation 85.

The statement from DLUHC notes new measures will be introduced to tackle pollution "at source", and there will be an expansion of the at source Nutrient Mitigation Scheme run by Natural England, doubling investment to £280 million. However, it is unlikely nutrient mitigation will have any direct link to developments being approved (unlike developments that are approved under the current law). As such there is no guarantee the mitigation will be in place at the time development comes forward and there are question marks over whether effective mitigation on this scale can be implemented at the same pace as the new developments. This risks development coming forward without any mitigation exacerbating existing issues in watercourses and protected sites. This is something DLUHC may have to grapple with when bringing forward new legislation, as it was a key criticism in the House of Lords.

There are also potentially question of how these changes will interact with other legal provisions, including local policy requirements. In the defeated proposals there was a potential conflict of laws in areas where nutrient neutrality safeguards have been adopted into Local Plans. The Planning and Compulsory Purchase Act 2004 requires that planning decisions must accord with development plans unless material considerations indicate otherwise. As such, where local authorities have adopted Local Plan policies that require applicants to demonstrate that a development will not have a detrimental effect on water, policy requirements may still be taken into consideration. Therefore, in areas that have adopted policies safeguarding water, the issue of nutrient neutrality may still have to be overcome with site specific mitigation, with authorities carrying out the equivalent of appropriate assessments. That said, regulatory changes are capable of constituting a material planning consideration, and local authorities may well place weight on the new regulatory regime as well as the need for new housing in determining that those material considerations outweigh the primacy of development plan policies.

Did the Government's proposals fall short of their stated goal in any event?

Whilst the proposed changes would have removed the barrier to development that exists under the Habitats Regulations, arguably the changes would not have solved the whole issue without further legislative and policy intervention by the Government.

In order to fully remove all barriers in the planning system associated with Nutrient Neutrality, the Government would have needed to amend the NPPF so that it dovetailed with the proposed regulatory changes: for example, so that the NPPF advised local planning authorities to assume that nutrient neutrality issues do not exist thereby mirroring the legislative changes. The Government would also have needed to legislate to disapply local plan policies in circumstances where such policies allow the refusal of a planning application where the proposed development causes harm to habitats. Removal of barriers within the NPPF and local plan policies would have been important in order to avoid local planning authorities relying on such policies (which by law they are required to have regard to) in determining planning applications that cause harm to habitats.

It will be interesting to see whether the Government will look at the above barriers alongside the Habitats Regulations if they do press ahead with deregulation in the future.  

What next

The amendments proposed by DLUHC have been defeated in the House of Lords and given the stage of the Levelling-Up and Regeneration Bill, cannot be revived. It remains to be seen whether the government will bring ford these changes in another form.

In the short term the law remains unchanged, so developers currently held up due to nutrient neutrality may still wish to progress their existing schemes and mitigation, depending on where they are in the process. Whilst for some developers it may be preferable to wait to see if the government will revive these proposals before bringing forward their schemes, for others continuing with existing schemes to try an achieve planning permission at the earliest opportunity, appears sensible. In the longer term if the law changes, the nutrient mitigation strategies that have been put into place in various areas, at significant cost and complexity, may end up being redundant, unless they are absorbed into the central Natural England mitigation scheme.

DLUHC states that contributions made by new homes to nutrients entering watercourse is very small and is rightly concerned about housing delivery. Future mitigation schemes and a move towards more sustainable farming practices could be deployed to address the harms arising. However, environmental groups see this as a "buy now pay later" scheme that permits harm to protected sites, without a clear and funded plan as to how this will be mitigated in the future. Only time will tell whether those fears are well founded, if these changes are implemented. The government may need to consider these concerns when bringing forward revised proposals in order to head off opposition.

What is clear is that this marks an intent by the government to make a significant move away from a precautionary approach being taken to protecting habitats. If the proposed changes make their way onto the statute book it will certainly unlock development in large swathes of the Country provided the Government also addresses barriers within local and national planning policies.

Rory Stracey is a Partner and Tim Brown is a Managing Associate at Trowers & Hamlins.