Nutrient Neutrality - a New-Build Nuisance?

What is Nutrient Neutrality?

Rising nutrient levels in rivers, estuaries, and wetlands are one of the many ways they are being polluted. This is due to the nearby land's use, which can result in sewage runoff or agricultural runoff from intensive livestock farming, which produces harmful chemicals in the form of animal waste and fertiliser. Yet, new homes' additional effluent and sewage as well as runoff from building sites exacerbate the issue in housing projects. Increased amounts of nutrients like phosphorous and nitrogen brought on by this pollution may hasten the growth of algae in water. This process, called ‘eutrophication’, degrades the quality of the water and harms wildlife.

Natural England advised the Chief Planning Officer in a letter dated March 2022 that the increased nutrients in development-related waste water were harming protected areas and putting them in an "unfavourable condition." Natural England urged 74 Local Planning Authorities (LPAs) to carefully consider planning applications and plans affecting habitats sites in “unfavourable condition” stating that a development should only be approved if mitigation is used to ensure it meets the requirements of the Conservation of Species and Habitats Regulations 2017 (as amended).

Natural England's recommendations have resulted in a significant delay in the determination of planning licences that could result in extra nutrient pollution, assuming they have even been determined at all.

Just how big of an issue is it?

It's clear that nutrient neutrality is becoming an ever-growing delivery problem. It is often the case that plans simply cannot receive planning permission because developers are unable to offer onsite mitigation, or the LPA may demand a financial contribution to an unobtainable strategic solution. So, they are counting on strategic answers to emerge first, leading to a moratorium on granting permissions. Conflict with the LPA's obligation to show a five-year housing land supply (5YHLS) of "deliverable sites" (NPPF, Paragraph 74) is a knock-on problem. So, what does it actually mean for the 5YHLS?

In essence, any LPA that has been performing well can suddenly become vulnerable to 5YHLS. Sites with existing detailed permissions can build out as expected, however, the future pipeline may be delayed since sites with allocations or outline permissions in impacted areas are now less likely to come forward soon, creating an ever-growing gap.

The LPAs that have the greatest amount of land subject to the moratorium will be the most impacted, particularly where this area covers key urban areas or locations where key strategic developments were planned. It will also particularly impact any LPA with a 5YHLS reliant on sites without detailed planning permissions (i.e., allocations and outline permissioned sites). Lower completion rates are to be anticipated, and these LPAs may incur a supply shortfall relative to their Plan targets, making it more challenging to demonstrate a 5YHLS.

In respect of the effect on developers, the estimate from the Home Builders Federation is that around 120,000 homes nationally are being delayed because of the nutrient neutrality problem. The majority of these – 18,766 – are concentrated in the Teesmouth & Cleveland Coast catchment in the north of England.

But it really is a nationwide issue. One we’ll have to tackle quickly otherwise, according to scenario models, there could be a reduction of up-to £305m of economic output produced by builders, their contractors, and suppliers.

New residences are being constructed more quickly than the water treatment facilities required to serve them, as shown in places that already have significant levels of nitrate pollution, such as those around The Solent, River Avon, and Poole Harbour. This is primarily because the national network of sewage works lacks the necessary capacity and tools to sufficiently cleanse the wastewater produced by housing demand.

But what can be done about it?

Natural England unveiled their Nutrient Mitigation Scheme (often known as "the Scheme") in July 2022 to try and free up development that is constrained by the nutrient neutrality issue. The Scheme would release developers from the obligation to offer mitigation by allowing them to purchase credits to offset residual nutrient balances, with priority access to the Scheme being provided to smaller builders who are most affected.

The Scheme is to run alongside a duty on water companies to upgrade their wastewater treatment works to the highest technological levels by 2030. This duty will come forward as part of the Levelling Up and Regeneration Bill. Once this receives royal assent, LPAs and developers can assume these upgrades will be undertaken and completed by 2030.

Credits from the Scheme will be offered in batches which any developer requiring credits can apply for. Where demand for credits exceeds supply, applications will be prioritised to minimise nutrient neutrality related delays to development. This will enable development of the most homes most quickly, facilitate small and medium enterprises, and support the delivery of affordable and social housing.

While the announcement is undoubtedly a positive step towards releasing growth from the constraints imposed by the nutrient neutrality problem, it is still unclear how big of an impact the Scheme will have, at least in the near future. The announcement stated that credits would be available from the end of March 2023 for the first mitigation project currently under negotiation, which is in the Tees catchment. There is no price information, though. Because of this, it might be challenging for developers to determine whether they will be priced out of the Scheme or will be able to afford to use it. Furthermore, there is no information regarding plans for other catchments or timelines for when they might be anticipated.

Future developments must therefore seek a more sustainable way forward. For surface water runoff, for example, developers should not only consider quantity so they can mitigate flooding but should place an equal focus on water quality and biodiversity. Implementing sustainable drainage solutions that can also be used as an amenity means that they can mitigate the negative impact that human activity is having on our environment and create a positive habitat for people, animals, and plant life alike.

Sustainable solutions for surface water drainage are collectively known as sustainable urban drainage systems (SuDS). Some of these techniques have an inherent ability to improve water quality, making them a recognised solution for nutrient neutrality. Examples of SuDS include creating wetlands, grasslands or woodlands that utilise a natural process of removing nutrients from the water. They create cleaner, greener developments, benefiting users and the environment, reducing flooding, limiting installation and future maintenance costs, and easing pressure on the UK’s struggling infrastructure.

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If you have a site going through planning currently or are in the formative stages of design, or if you have any questions about Nutrient Neutrality and the implications for your plan, Chattertons' Commercial Property and/or its Land Development & New Homes Team can help discuss your options.

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