Planning reform: development and nature recovery

Stephen Tromans KC and Ned Helme consider the “Planning Reform Working Paper: Development and Nature Recovery” and how the Government’s aims of drastically increasing the rate of housebuilding and infrastructure development can proceed whilst also achieving the equally challenging commitments on net zero and ambitions for nature recovery.

Part of the pre-Christmas flurry of activity on Gov. UK was the policy paper, Planning Reform Working Paper: Development and Nature Recovery, published on 15 December 2024 [1] The context of the paper is the conundrum facing the Labour Government of making good its pledge of “getting Britain building again”, with what would be a rate of housebuilding not seen in over 50 years. It’s of course not just housebuilding – new houses require infrastructure, not least to deliver the clean energy needed to deliver the Government’s other equally challenging commitments on net zero. Add into that heady mix the aspirations for nature recovery and there is a Gordian knot that will require some cutting or unpicking.

The paper focuses on the environmental requirements of the Conservation of Habitats and Species Regulations 2017 (“the Habitats Regulations”) and other environmental assessment legislation. It envisages a possible “win-win” scenario where, under a more strategic approach, development can proceed apace while funding nature recovery. But how realistic is this and how might it be achieved?

The paper makes the important point that often delays and difficulties in providing housing and infrastructure arise not necessarily because of the impacts of these developments in themselves but because of the poor baseline conditions against which the development is assessed, which arise from other causes: the paradigm case being the restrictions on development arising from advice on nutrient neutrality in some parts of England. Stepping back a little, some practitioners might also comment that another contributing factor is the powerful role occupied by the statutory nature conservation bodies within the planning system which, whilst only doing their job, often tend to apply an ultra-precautionary approach. Be that as it may, it is surely right that the best way to address the question of nature recovery ultimately is through the creation of the necessary environmental headroom to support growth, as the paper envisages. Such recovery will take time, however, and new development cannot be stymied in the interim. The paper suggests that, too often, the status quo sees housing development and nature restoration stall; and it proposes a solution through a more strategic approach.

The Government acknowledges that what it wishes to achieve cannot be attained under the existing legislative framework, and that “targeted amendments” to legislation like the Habitats Regulations and the Wildlife and Countryside Act 1981 will be necessary, though importantly the paper commits at para. 11 not to reduce the level of environmental protection provided for in existing law. This approach envisages no change in outcomes achieved under existing legislation, but rather a change in the way those outcomes are achieved. The paper also indicates at para. 12 that the proposals are intended to work together with the new framework of Environmental Outcome Reports to be introduced under Part 6 of the Levelling-up and Regeneration Act 2023.

The proposals involve three steps for which the Planning and Infrastructure Bill will provide the legislative backing:

1. Moving from multiple project-specific assessments to a single strategic assessment and delivery plan.

A few precedents are cited for this approach: District Level Licensing for Great Crested Newts, based on creating new habitat; the provision of Suitable Alternative Natural Greenspace (SANG) as collective mitigation for pressures on protected areas from new residential development; and the Marine Recovery Fund to compensate strategically for new offshore wind developments. It is proposed to build on these precedents by establishing a new legislative route to take consolidated and coordinated action to drive nature recovery.

2. Moving more responsibility for delivery and implementation of these strategic actions onto the state.

The essential corollary of Step 1 is to establish a framework to allow a suitable Delivery Body “to consider which actions are needed to address an environmental impact (or impacts) strategically, for a relevant range of development types, across an appropriate area and for an appropriate period of time” and then secure these actions using funding provided by developers. What is envisaged is a flexible model, capable of addressing a wide range of impacts. It appears that the system would be “modular” in that the Government would be able to identify an issue related to a specific environmental obligation and task a suitable Delivery Body (such as Natural England) with addressing it strategically. That body would then use its judgement and the best available evidence to determine which actions were needed and where. The core common element would be a Delivery Plan produced by the Delivery Body, at the largest spatial scale appropriate.

3. Allowing developers to make a financial payment towards these strategic actions, so limiting project level assessments to those that are not dealt with strategically.

Where there is a robust Delivery Plan approved by the Secretary of State, there will also be a mechanism to secure contributions from developers to fully fund the actions it has identified, to be called the Nature Restoration Fund. A developer would pay into this fund rather than funding project-specific measures. The project would then not be subject to assessment in respect of impacts addressed in this way (though other impacts would remain subject to assessment).

Some questions

There are, as might be expected, a number of questions arising from these proposals.

First, as noted above, the paper envisages only “targeted amendments” to legislation such as the Habitats Regulations, but how targeted will it be possible for the amendments to be while giving rise to the benefits of a strategic approach?

One particular issue is compatibility with assimilated EU law, particularly the Dutch Nitrates case C-293/17 and C-294/17, which of course is the law behind nutrient neutrality. One aspect of that case is that projects must be subject to an individualised appropriate assessment of their implications for the sites concerned, unless the objective circumstances make it possible to rule out with certainty any possibility that those projects, individually or in combination with other projects, may significantly affect those sites. The case also establishes that conservation measures may not be taken into account if the expected benefits of those measures are not certain at the time of that assessment.

If these principles are maintained under the proposed targeted amendments, [2] it would place great responsibility on the Delivery Plan to demonstrate its effectiveness with a high degree of certainty and to do so early enough to be legally relevant to assessing projects – otherwise it would be legally vulnerable. If they are not maintained, however, it would arguably give rise to a weakening of the current regime.

To formulate a Delivery Plan would be a daunting task, even for a well-funded Delivery Body, which current bodies are not. Baseline conditions will have to be assessed, actions and their phasing will need to be identified, constraints identified and solutions found (compulsory purchase of land may be necessary, for example), the cost calculated and an apportionment method devised. This seems likely to be a highly controversial process in many cases. It could potentially in itself hold development up for years. However, the Government envisages an early start to the process, with the first Delivery Plans operational for developers to use shortly after Royal Assent of the enabling legislation. A further question is how in a world of limited resources, potential Delivery Plans in different areas of protection and recovery are to be prioritised. Between Christmas and New Year, an editorial in The Times criticised the Labour Government’s failure to take forward plans developed by its predecessor in 2023 for recovery of English chalk streams, which would have included use of reformed planning powers to designate chalk streams and their catchments “with a bespoke protection appropriate to irreplaceable habitats”. [3] It can be readily appreciated why the Government might be unenthusiastic about creating more possible planning constraints on development, but the example shows that areas of nature recovery which are not perceived as providing a hurdle to housing development in particular may potentially be a lower priority.

The provision of the funding to implement Delivery Plans will (in large part) depend on development proposals coming forward and this may be uncertain in timing. How is this to be squared with the level of certainty as to delivery required so as to avoid harm from early projects before the strategic measures are in place and are effective? And how much upfront funding will be required from the Government?

What are the safeguards for developers against Delivery Bodies taking an overly precautionary view and imposing very large financial burdens which might be regarded as disproportionate, or possibly as the developer being asked to contribute to footing the bill for reversing past decline in protected sites, as against dealing with the consequences of their own development? The paper (para. 35) envisages that the aggregate cost to developers will be no greater than the status quo, but is this realistic?

How is the linkage to be made between the specific site or part of the site affected and the strategic solution? If there is no or a limited linkage, numbers of a species or areas of habitat nationally may increase as a result of strategic measures, but the specific site may still be adversely affected, maybe disastrously. However, if the linkage is too strict, gains at a wider level might not be maximised.

How will the mitigation hierarchy operate? The paper envisages (para. 23) that Delivery Plans would “have the flexibility to diverge from a restrictive application of the mitigation hierarchy” where this would deliver better outcomes for nature, but how would this operate in practice, and would it lead to more mitigation being required overall?

How will the legal distinction between mitigation and compensation be addressed? Interestingly the scenarios canvassed at the end of the paper include both mitigation (in relation to nutrient neutrality) and compensation (in respect of a nationally significant infrastructure project which meets the IROPI test but where compensatory measures are problematic for the promoter, or at least would potentially be the cause of long delays). The two scenarios are really quite different, which emphasises the point made in the paper about the need for flexibility. The second example of compensation could in principle be used for a small number of projects, or indeed a single one: the point being that the Delivery Body rather than the developer would be tasked with coming up with the solution – of course working with the developer. That might potentially lead to a more cooperative approach than often happens in DCO procedures currently, where essentially the developer puts forward proposals which the statutory consultees then snipe at.

There are, as is to be expected, a number of tricky questions, of which the above are some. Nevertheless, it is clear something has got to give in the current system and what we have in the paper is a bold attempt – more sensible than anything we saw under the previous government – to cut through the knot. It may not work for all projects, but it does at least represent a chance of delivering sensible outcomes for some.

Stephen Tromans KC and Ned Helme are barristers at 39 Essex Chambers.

[1] Available at: https://www.gov.uk/government/publications/planning-reform-working-paper-development-and-nature-recovery. It should be noted that the paper, while not a formal consultation, nonetheless invites views, in particular on a series of questions set out in its final paragraph.

[2] And assuming they remain post-Brexit, which is not certain given that the approach to interpretation of the Habitats Regulations has been adjusted by the European Union (Withdrawal) Act 2018 and, pursuant to section 6 of that Act, retained EU case law such as the Dutch Nitrates case is not binding on the Supreme Court or certain other courts.

[3] The Times, 28 December 2024