Nutrient Neutrality: Unravelling the Gordian Knot

Where are we now?

100,000 homes held up in the planning system, applications taking more than 2 years to be determined and housing delivery rates falling in the 74 local authority areas affected by Natural England’s (NE) advice on nutrient neutrality. This issue is because 27 watercourses are in an “unfavourable condition”, with a concern that additional nutrient pollution could be caused by the delivery of new homes, and other development involving beds such as hotels, senior living, and student accommodation.

The Government’s proposals

On 20 July 2022 the Government unveiled a package of measures aimed at addressing the problem, but this provided no immediate fix. Applications involving beds will need to continue to demonstrate nutrient neutrality. The two most important elements of the package are a statutory duty for water companies to upgrade waste water treatment works (WwTW) by 2030, and a Nutrient Mitigation Scheme (NMS) that is to be run by NE, where credits can be purchased to offset residual nutrient balances. A Chief Planning Officer’s letter dated 21 July 2022 provided further detail (set out below) on these measures.

The requirement to upgrade WwTW would come forward in the Levelling Up and Regeneration Bill (LURB), and should enable those undertaking environmental assessments, and habitats regulations assessments of plans and projects to project low levels of nutrients from 2030 onwards, but not before. The Conservation of Habitats and Species Regulations 2017 would be clarified to make clear that the WwTW upgrades were to be considered certain as part of the assessment process. For schemes that are phased, with occupation of later phases not planned until 2030 or later, then it is likely that the WwTW upgrades will ensure that these phases are nutrient neutral. 

Funds received as part of the NMS will be used by NE to support the creation of new wetlands or woodlands. However, NE will have to first identify mitigation projects in nutrient neutrality catchments, and will then have to deliver the mitigation, which will need to be operational before the occupation of new homes and other ‘bed’ development. This therefore means that any permission relying on the NMS is likely to include a Grampian condition preventing occupation until the mitigation has been delivered. This is hardly ideal for developers who will then be reliant on a third party to identify a project, secure the land, secure sufficient funding to deliver the project, and deliver it, all within an unknown timeframe that may or may not tally with a developer’s construction programme. Relying on the NMS to deliver nutrient neutrality therefore comes with a high degree of risk for developers.   

The Secretary of State also directed Natural England on 28 July 2022 to “prepare, facilitate and administer the operation of strategic mitigation schemes” in the catchments covered by the direction. However, this is subject to funding to be agreed.    

The reality is, that there will still be many schemes that cannot achieve nutrient neutrality at the present time, and the Government’s proposals are of no immediate assistance. This may be because a scheme is due to be delivered before 2030, because the site is in an urban area with no ability to provide on-site mitigation such as a new wetland habitat, or because the developer is unable to find (or unable to afford) land within the relevant catchment that can be converted to woodland/wetland, or even farmland taken out of use. 2030 is too far in the future for most schemes, save for phased or strategic schemes to rely on it, and the NMS is unlikely to be a panacea because of the potential Grampian requirement. 

Amendments to the LURB

Michael Gove promoted two amendments to the LURB recently that takes the Government’s July 2022 commitments a stage further. The first amendment provides that a: 

"sewerage undertaker whose area is wholly or mainly in England must— (a) in the case of each nitrogen significant plant comprised in its sewerage system— (i) secure that, by the upgrade date, the plant will be able to meet the nitrogen nutrient pollution standard, and (ii) on and after the upgrade date, secure that the plant meets that standard". 

Identical measures are proposed in relation to phosphorus pollution discharges. The “pollution standard” will be an identified pollution concentration. 

The second amendment provides that:

"Any damage attributable to the failure of the plant to meet the standard on and after the upgrade date, until it first meets the standard, that occurs to the related habitats site is to be treated for the purposes of these regulations as environmental damage to the site caused by an activity of the sewerage undertaker."

The reference to “environmental damage” is a reference to the Environmental Damage (Prevention and Remediation) (England) Regulations 2015 (as amended). This creates potentially draconian consequences for the water undertaker operating the non-conforming WwTW. They could be ordered to take remedial action following the service of a remedial notice, which usually requires the restoration of the habitat back to its original condition. Restoration may also involve complementary or compensatory remediation. Enforcement agencies are able to recover their enforcement costs.

A statement issued by the Department for Levelling Up, Housing and Communities (DLUHC) on 18 November 2022 in relation to these amendments to the LURB stated that:

"These upgrades will enable housebuilding to be unlocked by reducing the amount of mitigation developers must provide to offset nutrient pollution. This will be accompanied by a Nutrient Mitigation Scheme that will make it easier for developers to discharge their mitigation obligations."

Again, this provides no immediate fix to the identified problems even if the LURB were to be enacted imminently. 

Finding an interim solution

What then is the solution for developers looking to deliver new homes and ‘bed’ development before 2030? The answer for small to medium sized schemes is surprisingly obvious – namely provide an interim solution. On a scheme that we secured planning permission on recently we did just that, the planning application having been submitted in Spring 2020. The scheme included both residential development and an aparthotel, as well as other uses such as retail, office, and community floor space. The site was in a city centre location and constrained by built development on all sides, and Roman and Medieval archaeology below the site. The interim solution whilst not attractive, at least allowed planning permission to be issued, and a combination of conditions on the planning permission, and s.106 obligations meant that the developer could move from the interim solution to a final solution in due course (say post 2030), provided that the final solution remained nutrient neutral. The interim solution is simple, tanker the waste off site on a daily basis, to a WwTW outside the catchment of the relevant protected site which is in an unfavourable condition. Although this will mean an increase in vehicle movements, it is the best of solution in the circumstances, and most importantly was accepted by NE. Although at first blush such an interim solution may not be suitable for larger sites where the number of tanker movements could be unrealistic, since the effects can rightly be categorised as “temporary”, even on some larger sites, the environmental impact of the tanker movements may be acceptable on a temporary basis. For small to medium sized sites, however, (including this site which involved 70 units) it represents a workable interim solution and may well be viable for other similarly sized developments. The Gordian Knot is beginning to unravel at last now that 2030 is in our sights.