I’m away this week of all weeks but I thought I would share my Town Legal colleague Susannah Herbert’s early thoughts on Part 3 (development and nature recovery) of this week’s Planning and Infrastructure Bill. This is not intended as a full summary – there are plenty of those already.
Part 3 of the Bill sets out provisions to provide for the strategic approach to addressing environmental impacts along the lines set out in the Development and Nature Recovery Planning Reform Working Paper published in December 2024. This relates to protected sites and protected species under the Habitats Regulations, the Wildlife and Countryside Act 1981 and the Protection of Badgers Act 1992 so it will not affect areas or species not covered by this legislation or other EIA requirements. It applies to “development” as defined in section 55 of the TCPA 1990 and also development within the meaning of the Planning Act 2008 (section 32) and listed building consent under section 8 of the Planning (Listed Buildings and Conservation Areas) Act 1990.
The principle is that Natural England is to put in place Environmental Delivery Plans (“EDPs”) which set out “conservation measures” to address certain identified “environmental impacts” of development on “environmental features” within a specified area and developers within that area then pay a “nature restoration levy” to fund the implementation of the EDP instead of having to carry out appropriate assessment or obtain protected species licences on a site by site basis.
The government believes that facilitating a more strategic approach to the discharge of environmental obligations will result in improved environmental outcomes being delivered more efficiently and reduce delays to development caused by lack of mitigation for example in respect of nutrient neutrality.
Much of the detail about the payment of the levy is to be contained in “nature restoration levy regulations” which would set out details concerning liability, matters that Natural England must have regard to in setting the amount of the levy, appeals in respect of the levy, use of the levy, collection, enforcement and compensation (for loss resulting from enforcement action). The government may also give guidance to Natural England about any matter connected with the levy.
The implications of these provisions are potentially extremely significant for both developers/ landowners and for nature recovery and whether the impact will be positive or negative will depend very much on the implementation and scope of the EDPs. The win-win scenario of improved environmental outcomes with lower cost and delay for developers may be achieved if strategic mitigation is effectively identified and implemented and the levy charged to developers is more cost effective than it would be to provide the mitigation on-site. However, it is also possible that the levy will need to be set at an unviable level, that the conservation measures are not effectively implemented at the same time as removing protections from protected species and habitats and that the loss of flexibility for developers has unintended consequences for viability and deliverability.
The Explanatory Notes include an example of how the proposals are intended to work based on nutrient pollution from residential development in a river catchment affecting a protected water course. Part of an EDP may be the imposition of a condition on a planning permission which in the example could be that all houses include septic tanks. The EDP would then provide for conservation measures such as the building of a wetland to be funded by the tariff. The impact would be monitored and an extension to the wetland may be delivered if the main measures are not sufficient. The payment of the levy would remove the requirement for an appropriate assessment to be carried out for the specific development.
However, many questions and potential issues remain.
Cl. 61(4) allows for EDPs to be mandatory in a specified area (although this has to be justified). This would remove the choice from developers to provide on-site mitigation even if this were preferable in nature recovery terms and more viable for the particular site.
The charging schedule for the levy will be set for each EDP and for each kind of development to which the EDP applies. Natural England must have regard, to the extent and in the manner specified by nature restoration levy regulations, to the actual and expected costs of the conservation measures proposed; matters specified in the regulations relating to the economic viability of development; and other actual or expected sources of funding for those conservation measures. The regulations may permit charging schedules to operate by reference to descriptions of purposes of development; any measurement of the amount or nature of development; the nature or existing use of the site; inflation; by reference to values used for other statutory purposes ; or may allow for differential rates including provision for supplementary charges, a nil rate, increased rates or reductions.
None of these matters are directly linked to the actual impacts of a particular development. This may be appropriate where the relevant impact can be sufficiently and fairly estimated on the basis of e.g. the quantum and type of development taking into account the existing use of the land such as the example of residential nutrient pollution given. However, in other cases such as in respect of protected species, the result may be that a development has to pay the levy to mitigate an impact on a species which was not present on the site in the first place or which would not be impacted by the development because of the design of the development. It may be that the intention is that surveys are carried out as part of bringing forward the EDP to establish which parcels of land it should apply to but this would potentially result in unnecessary work if surveys have to be carried out over a whole area compared to surveying only those sites where development is proposed. It is also not clear if the surveys would be kept up to date. The Secretary of State may make further regulations regarding requirements for Natural England when preparing an EDP which may address some of these questions.
The strategic nature of the mitigation proposed to be provided begs another set of questions. If a certain number of developments are required to contribute to fund the strategic mitigation, how will the sequencing work? Will the impacts of the first developments remain unmitigated until sufficient development comes forward to fund the strategic mitigation (in which case how much damage will be done to protected species or habitats in the meantime)? or will the conservation measures be funded by the Government in anticipation of development (which may not materialise and therefore may end up being an unnecessary cost to the public finances)? Both of these approaches are possible under cl. 66(4) which allows for expenditure already incurred to be reimbursed and for money to be reserved for future expenditure.
The regulations may also make provision about payment in forms other than money (such as making land available, carrying out works or providing services) (cl 67(6)) which may allow part of the cost of the levy to be offset by on-site mitigation or potentially providing additional mitigation and somehow receiving credit for this although there is no clear mechanism for this to operate.
It should also be noted that Natural England would be given the power to compulsorily acquire land for purposes connected with the taking of a conservation measure (cl. 72).
Public authorities would be required to co-operate with Natural England in connection with the preparation or implementation of an EDP (cl. 75). Natural England must publish a report for each financial year on the exercise of its functions in respect of these provisions (cl. 73) and the Secretary of State may also designate another person to exercise the functions of Natural England (cl. 74).
The Bill (cl 53- 60) sets out the process for preparation of an EDP, statutory consultation, making of the EDP by the Secretary of State based on an “overall improvement test”, publication, reporting, amendment, revocation and challenge. There would therefore be opportunities for developers to make representations concerning a proposed plan possibly arguing that a particular allocated site should be excluded if on-site mitigation is proposed or presenting evidence as to viability in respect of the proposed levy. There is also the potential to challenge a plan by way of judicial review which could potentially introduce a whole new set of delays to development.
Thanks for that Susie. This is now me again in this paragraph. Plenty more to cover both on this subject and the PI Bill itself. Aside from not having read the whole Bill itself yet (I know I know), I also haven’t read the Life of Pi by Yann Martel. I’m told by google that “its main message is that life can and will be difficult. However, people must persevere by any means necessary. Being adaptive and having faith in yourself and a higher power can help a person achieve any obstacle in their path.” How true. As in life so in planning and infrastructure.
Simon Ricketts, 13 March 2025
Personal views, et cetera
SIMONICITY 