On 29 August, the Government announced that it would amend the Levelling Up and Regeneration Bill to unblock housebuilding to deliver homes for local communities, whilst at the same time introducing measures to protect and improve the environment.

What is the nutrient neutrality problem?

In some English bodies of water there is currently an excess of nutrients, mainly nitrates and phosphates. This long-standing problem causes excessive growth of algae in the water; a process known as eutrophication, which can disrupt healthy ecosystems and impact wildlife. The Environment Act 2021 bolstered legal targets to protect and improve Habitats Sites, and the Government is committed to recovering the condition of such sites that are in a poor condition as a result of excess nutrients.

Understanding where these excess nutrients originate from is important. The sources are site specific, but predominantly originate from wastewater and agricultural run-off (fertilisers and animal waste). Only a very small contribution is made by housing.

Despite this, in 27 water catchments spanning 56 local authority areas across England, new homes have been hindered by ‘nutrient neutrality’. This is as a result of a ruling made by the Court of Justice of the European Union (CJEU) on the interpretation of the Habitats Directive in the ‘Dutch Nitrogen Case’. As a consequence, Natural England has been required to advise that planning decision-makers and plan-makers, including local planning authorities, must require developers to demonstrate upfront that they have mitigated any additional nutrients they would produce, in order for plans and projects to be given the go ahead.

This has placed an unavoidably burdensome process around the offsetting of small quantities of nitrates and phosphates from the wastewater arising from new developments, while achieving little to improve water quality.

Nutrient neutrality advice affects any plan or project which would result in additional overnight accommodation in one of these catchments. This means it is holding up all types of housing – from estates to self builds to the renovation of high street shops into homes– and deterring individuals and developers from seeking permissions. In some cases, homes already have planning permission and have been caught at discharge of conditions stage. It is also undermining efforts to put in place local plans that allow local authorities to properly control development in their areas. While developers of all sizes are affected, the impact on smaller developers has been particularly acute, as the inability to progress a particular site can threaten the viability of the whole business.

What is already happening to address the nutrient problem?

The Government is already legislating, through the Levelling Up and Regeneration Bill, to require the upgrade of wastewater treatment works in designated catchments by 1 April 2030. You can read more about the Bill on the campaign section of my website here.

In addition, developers, environmental organisations, local authorities and Natural England have begun to invest in mitigations (such as new wetlands that can intercept nitrates and phosphates) so that as and where these are operational, new housing can be consented in the relevant area. In a small number of areas of the country, including the Solent and Tees Valley, these schemes are now operational and have allowed planning consent for some housing to resume.

It is however clear from listening to the concerns of local communities, local authorities and housebuilders that while a positive development, mitigation schemes are moving too slowly, with no guarantee that demand can be met imminently. The existing approach also does not take account of the fact that new homes will not contribute any additional nutrient outflow until they are not just built but occupied.

The current situation – and the lack of certainty for local people, developers, and people working in the construction industry – is undermining growth, jobs and the prospects of much needed housing for communities in many areas of the country. It is also not tackling the underlying sources of nutrient pollution, which is needed to move from mitigation to restoration of our protected sites.

What further action has the Government put forward to solve the nutrient problem?

The Government is bringing forward a package that will both unlock housing development and at the same time better protect and restore our natural environment. Having considered the underlying causes of nutrient build up in the affected catchments, hearing from local councils and the development industry, and by working closely with Natural England, the Government’s plan involves:

• A targeted and specific change to the law so that there is absolute clarity housing development can proceed, which will sit alongside the existing provisions in the Levelling Up and Regeneration Bill on upgrades to wastewater treatment works; and
• A wider environmental package, which will complement the wastewater treatment works upgrades in addressing the root causes of nutrient flows, including by increasing investment in nutrient reduction projects

Targeted legislative action

The amendments that have been laid to the Levelling Up and Regeneration Bill will make targeted and specific changes to the Habitats Regulations so that consideration of nutrient loads in urban wastewater is no longer required for planning decision making and plan-making in areas currently affected by nutrient neutrality.

In practice, this will mean that where development is linked to a wastewater treatment works or an alternative wastewater treatment system managed under the environmental permitting regime (such as septic tanks), local authorities will be able to grant planning permission – with more robust action to tackle nutrient pollution now rightly taken outside the planning system through the other measures that are being put in place.

Agricultural and industrial development will continue to be dealt with by separate permitting and regulatory processes. Water companies must also continue to take account of predicted growth in housing development alongside meeting permit limits.

This legislative change is the most appropriate way to ensure certainty for local authorities, communities and developers. The Government considered a number of non-legislative options, including issuing guidance or placing greater emphasis on the ‘Imperative Reasons of Overriding Public Interest’ (IROPI) derogation. Such options would have continued to require lengthy case-by-case considerations by local authorities, and risked different interpretations by different actors in the system – when the Government was conscious that any intervention to address the nutrient neutrality problem needed to remove uncertainty, not add to it. The Government therefore settled on an approach that will provide clarity for local authorities and developers, ensuring homes can be built, and which at the same time provides a clear path to restoring protected sites.

As part of these new amendments, there is a power to address consequential changes that may be needed to other parts of the statute book in order to maintain the functioning of the system. The Government intends to use this power sparingly, and only to avoid unforeseen or unintended consequences or contradictions that may arise given the complexity of this area of law. This power is subject to a sunset clause and Regulations made under it must be approved by a vote of both Houses of Parliament.

Wider environmental package

Alongside this legislative action, the Government is introducing a series of measures – many of which are supported by additional investment – to tackle the underlying sources of nutrient pollution, restore nature, and leave our environment in a better state than we found it. These measures are focused on improving the condition of the affected Habitats Sites.

There is a significant expansion of investment in the Nutrient Mitigation Scheme run by Natural England, doubling investment to £280 million to ensure it is sufficient to offset the very small amount of additional nutrient discharge attributable to up to 100,000 homes between now and 2030. Natural England will work with local authorities, the private sector and others to tackle nutrient pollution and work towards the long-term health and recovery of protected sites. The Government is clear that developers should continue to play their part in tackling nutrient pollution, which is why they are working with the Home Builders Federation to structure appropriate and fair contributions – which they both agree are needed.

Work is also being accelerated to recover habitat sites in the catchments most impacted by nutrient pollution by developing and implementing Protected Site Strategies (PSSs). Introduced in the Environment Act 2021, PSSs will tackle the greatest challenges facing protected sites and find creative, nature-based solutions to solve them. They will be based on local evidence and consultation to build understanding around, agree, and then implement measures to restore sites.

Action, too, is being taken on agricultural nutrient pollution in partnership with farmers. Investment and innovation in nutrient management represents a win-win for food security, productivity, and profitability as we build a more circular economy for nutrients and keep more valuable inputs on farm. The Government has set and remains committed to meeting Environment Act target to reduce nitrogen, phosphorus and sediment pollution from agriculture into the water environment by at least 40% by 2038. An interim target has been set 10% reduction by 31 January 2028, with a more stretching 15% target in catchments containing protected sites in unfavourable condition due to nutrient pollution.

The Government is investing £200 million in grants for improved slurry storage infrastructure and equipment. The next rounds of Slurry Infrastructure grants will open in Autumn 2023 and 2024, and Farming Equipment and Technology (FETF) in early 2024. This is £166 million of further investment into slurry infrastructure and equipment building on our successful existing offer in the Farming and Countryside Programme. In total this investment is expected to:

• Deliver 1,400 storage projects by 2028;
• Support 40% of farms to reach higher storage standards (6+ months covered storage), with improvements targeted near protected sites with water and air pollution risks from agriculture; and
• Enable 75% of farms to spread slurry with precision equipment, reducing air and water pollution

The Government is committing a further £25 million to a new nutrient management theme within the Farming Innovation Programme, to help farmers manage plant and soil nutrients. This includes aiming to reduce pollution while increasing efficient nutrient retention (e.g., through investment to improve fertiliser products). This will increase resilience, reduce input costs and improve productivity. The effective use of waste has the potential to create new revenue streams.

A consultation will be held this year on modernising our fertiliser product standards to support increased use of organic and recycled nutrients.

The Government will start introducing payment premiums into our environmental land management schemes in 2024. This will accelerate take up of certain high priority options, including those that provide benefits for water quality.

At least 4,000 risk-based inspections on farms will be conducted each year - making sure that slurry and other pollutants are being handled in a way that minimises pollution of the water environment. The Government is committed to minimising burdens on farmers who do the right thing while tackling poor performance where it occurs.

These important measures take forward, and build on our world leading Environmental Improvement Plan, our contributing toward delivery of our legally binding Environment Act targets, and the Plan for Water.