The impact of environmental regulations on development

There are legitimate concerns that the Government will not meet its environmental or housing targets on time. The deliverability of its environmental ambitions is particularly drawn into question owing to the limited time afforded to meet them.

To balance policy decisions more effectively, the Government should commission a review into the cost implications of satisfying environmental regulations for both housebuilding and large infrastructure projects.

It does not help the Government achieve its policy commitments if local planning authorities operate without clear, consistent, achievable, and co-ordinated national policies. National political leadership needs to be shown in setting out which priorities should prevail when individually important policies conflict with each other.

Too many local planning authorities do not have an up-to-date local plan. Given the importance of local plans in balancing ambitions for development and the need to protect the environment, the Government should ensure that all local planning authorities have the necessary resources and information to produce a plan. It should explore legislative or legal routes to enforce the requirement for a local plan.

If the Government produces a land use framework it must ensure and demonstrate that all relevant government departments, including the Department for Environment, Food and Rural Affairs and the Department for Levelling Up, Housing and Communities are effectively involved in its production.

As a result of the requirement to mitigate harm at a project level, local planning authorities are attempting to balance decisions between unequally weighted principles. To overcome the statutory weight of environmental protection requires significant expertise and places great additional onus on local planning authorities.

If the Government thinks it is appropriate for competent authorities to be responsible for balancing economic, social and environmental priorities at permission stage, it must ensure that the necessary expertise is available within local authorities. Detailed guidance on the process for declaring imperative reasons of overriding public interest must be provided to support legally sound decision making.

The Government should place the need to deliver housing on a statutory footing equal to that of environmental protection. This will help to ensure balanced decisions can be taken.

The Government should review the requirement for mitigation to be available at the time of, and directly linked to, a planning application. It should explore legislating to allow development to proceed where a deliverable plan is in place to address pollutants or the condition of a protected site, which has taken into consideration development ambitions set out in the local plan.

Following the passage of the Levelling-up and Regeneration Bill, the Government should provide clear advice as to what assumptions local planning authorities and developers can make regarding requirements for nutrient neutrality in light of the 2030 deadline for upgrading wastewater treatment works .

The Government and Parliament have vital roles to play in taking decisions balancing environmental priorities with key issues such as the viability of ongoing housing development or the UK’s food security.

The Government should confirm if it was aware of the likelihood that productive farmland would be taken out of use because of the nutrient neutrality advice and if it adapted its food strategy in response.

The Department for Levelling Up, Housing and Communities and the Department for Environment, Food and Rural Affairs should issue joint advice on where and when, if at all, the practice of discontinuing farming owing to any impact mitigation requirements for housebuilding is applicable and acceptable.

Too often, the outcome of government policies and regulations place responsibility for preventing and addressing historic pollution onto those with limited, if any, power to effect change. Balancing the social, environmental and economic benefits and costs of development is a difficult task requiring expertise, evidence, ability and genuine willingness to effect change: it is a matter for the Government and Parliament.

The full suite of environmental regulations delivered through the planning system should be reviewed and, if necessary, considered for amendment to ensure that they are in line with the Government’s environmental principles policy statement.

We were concerned to hear that the Government’s Integrated Plan for Water, proposed as the solution to nutrient pollution, is not yet able to deliver genuine change. The Government has shied away from taking the necessary decisions and risks failing to improve the situation in line with international commitments.

The Government must prioritise implementing the Integrated Plan for Water and publish the information sought by its arm’s-length bodies, including setting out the balance of priorities between farming and other sectors in addressing nutrient pollution. In doing this it should be cognisant of the experience in the Netherlands .

The Government should develop integrated plans for addressing all areas of conflict between development and environmental policies before legal backstops are reached and development is halted. These must include implementation plans and be in line with the environmental principles policy statement.

We welcome proposals in the Levelling-up and Regeneration Bill for the Environment Agency to review the environmental permits of plants which discharge treated effluent into catchments impacted by nutrient pollution. This should be expanded to agricultural activity. The Environment Agency should inspect all farms within the 27 catchment areas subject to nutrient neutrality advice by the end of 2024 to ensure they are operating within their permitted pollution levels and enforce standards on those that are not.

New development can contribute to environmental damage; however, it is important that the ongoing and long-term impact of historic housing stock and agricultural practices are addressed.

The Government should explore how mitigation schemes could finance improving existing housing stock, building on the model in Crawley. It is unlikely that this approach will provide sufficient offsetting to meet housing demand, but it should be considered a key part of the solution and a suitable route to contribute to the Government’s levelling- up mission to improve housing quality.

The condition of protected areas in the UK has a direct impact on development. When not maintained, their poor condition can cause an immediate halt in housebuilding. Statutory bodies and others have known about the poor state of some protected areas for several years but there has been no overall improvement.

Given the importance of site condition and classification to the planning process and decision making there should be greater transparency over the assessment process. Natural England should publish its detailed scientific justification for any site assessment in an easily accessible and understandable format.

Natural England’s new Protected Sites Strategy approach should be extended to all protected sites in an ‘unfavourable’ condition. These strategies should include a time-bound action plan for restoring its condition in line with the environmental principles policy statement.

Restructuring Defra’s arm’s-length bodies could distract from the Government’s targets for 2030. Nonetheless overlap between the agencies must be reduced to deliver the best value for money and reduce delays and confusion for developers.

The Government should publish its response to the Nature Recovery Green Paper by the end of 2023. If structural changes are not made, a clear plan for eradicating unnecessary overlap and improving cross-organisational work should be published. This must focus on improving engagement at a project level.

We were pleased to discover that there is a Ministerial Taskforce on Nutrient Neutrality. We do not know what its remit and objectives are. It is disappointing that such cross-governmental working was not in place before housebuilding was effectively halted across 14 per cent of the country’s land area.

The Government should pave the way in innovating how organisations collaborate and drive change. It should ensure that the delivery expertise and market understanding in Homes England and the Planning Inspectorate is accessible to all departments making policy that will affect development. As far as possible, practitioners should be included in policy development. When introducing new regulations or requirements on the planning system or for development, all government departments should be mandated to consult Homes England and the Planning Inspectorate.

When developing new advice or guidance which will affect the planning system, Defra and its agencies should undertake and publish an impact assessment. This should include insights from across government.

Public bodies are facing challenges recruiting and retaining ecological expertise. It is necessary to bring expertise into the system through recruitment or training current staff.

Additional funding has been provided for statutory bodies. In 2024, a review should be undertaken of the availability and accessibility of expertise in Natural England and the Environment Agency to identify and address any remaining gaps in expertise.

Statutory consultees should ensure sufficient resource is available for them to work with developers to address issues raised during the statutory process in a timely manner .

The Government should introduce targets for stakeholder satisfaction for its arm’s-length bodies as part of the proposed new planning performance framework. Feedback from developers and infrastructure promoters should be regularly sought and acted on.

The Environment Agency and Natural England should support the formalisation of a role for those experts who are part of the Nationally Qualified Mark Scheme. They should explore using this resource to provide independent reviews of relevant environmental assessments , funded by the developer, where the capacity is unavailable internally .

We welcome the Government taking steps to address the funding shortfall in local authority planning departments.

The Government should complete its proposed fees review within the next 12 months to provide greater long-term certainty for planning departments and applicants. The proposed skills and resources strategy should be published by the end of 2023.

The disparity in providing additional support between those areas impacted by nutrient and water neutrality is both unfair and illogical. Given the proliferation of new advice, ensuring early understanding and solutions are available could have wide reaching benefits.

The Government and statutory bodies must meaningfully consult local planning authorities on new advice and policy which will have an impact on their decision making as competent authorities. This process must allow sufficient time for expertise in handling new policy issues to be developed.

Local planning authorities should work with local partners and, where relevant, upper- tier authorities to share expertise and drive economies of scale. The approach taken by Warwickshire County Council should be considered a best practice example and delivered through two-tier authorities, mayoral combined authorities and joint ecological units.

It is unrealistic to expect the market to immediately provide a private sector mitigation solution for new regulatory schemes, especially where there is political uncertainty about their longevity.

When new types of mitigation are required owing to advice from statutory consultees, the Government should work with Natural England to provide public sector mitigation schemes in the immediate term. These can be closed to new applicants or become a provider of last resort when a private sector market has developed .

The lack of managed credit-purchase mitigation schemes for specific pollutants or in certain areas is restricting developers’ ability to gain planning permission.

Mitigation networks , organised by Natural England, should be created to share expertise and learning between affected local planning authorities. These networks should develop standard mitigation models for local planning authorities to use when a new requirement comes to their local area.

Where there is a model in place for cost recovery through the planning process, the Government should provide up front funding to local planning authorities to undertake mitigation activity. This could be repaid through the creation of a local credit scheme to ensure that mitigation schemes are available to all developers.

It is unfair that, when using schemes which charge on a per dwelling basis, smaller properties are faced with a relatively larger cost. Local planning authorities should be encouraged to ensure schemes have a charging scale based on the number of bedrooms or square meterage of homes and is thus more directly related to the potential impact of new homes.

There is a preference among developers of all sizes for off-site mitigation to be managed centrally with clear and predictable costs to allow them to factor these into land value calculations. In these circumstances, the costs can be borne by a development and the outcomes provide greater benefit to the environment.

Natural England’s District Level Licensing scheme for great crested newts has reduced costs and increased certainty for infrastructure and housing developers where it operates while maximising the benefits for species conservation. The Government should expand this approach to other protected species.

The Government should support the authorities responsible for local nature recovery strategies to ensure that they bring together information and actions to enhance the environment. Relevant authorities should develop biodiversity net gain credit schemes which support the delivery of local nature recovery strategies so that off -site delivery continues to benefit residents in the local area .

More detail should be provided on the proposed approach to monitoring and enforcing the long-term delivery of biodiversity net gain. Where local planning authorities are required to undertake ongoing monitoring, the Government should provide sufficient resources for this. The Office for Environmental Protection should have a role in ensuring local planning authorities undertake ongoing monitoring and enforcement.

The requirement for robust environmental data accompanying development applications should remain. However, the Government should ensure that local planning authorities are mandated to validate a planning application if it fulfils the published list of information required.

The Government should ensure that where planning applications are delayed in the planning system beyond the statutory or agreed time limit the lifespan of necessary surveys is extended.

There will always be a requirement for some site-specific environmental information, but improved and accessible baseline data would reduce costs for developers, improve the quality of information available and, if provided by an independent body, reduce conflict in the planning system.

Alongside its work to digitise planning, the Government should consider the expansion of the Natural Capital and Ecosystem Assessment Programme. Any approach should prioritise the delivery of terrestrial information for areas of high housing and infrastructure demand over a blanket national approach. The Government should clarify when the proposed data sets will be available , develop a paid-for system for the private sector to utilise the data and confirm how often information will be updated. New technologies and innovations should be utilised to ensure data remains usable and useful in the long term.

The Planning Inspectorate’s work to introduce data standards for Nationally Significant Infrastructure Projects should be expanded to all projects of the scale which requires an Environmental Impact Assessment and should be suitably adapted for smaller housing developments.

To create consistency for developers and improve community engagement with the planning process, the Government should develop templates and exemplars for those assessments most regularly undertaken by developers .

Brownfield development is a key government policy supported by the public and vital to delivering homes.

The Government should ensure that remediating brownfield sites is not disincentivised by biodiversity net gain requirements. Local planning authorities should be able to moderate biodiversity net gain requirements for sites on their brownfield registers.

The interaction between planning permission and permitting is causing delays on some sites, with a specific impact on the development of brownfield land.

The Department for Levelling Up, Housing and Communities should work with the Department for Environment, Food and Rural Affairs to review planning and permitting requirements for brownfield land and eliminate overlap. This should include checks on how brownfield sites are assessed to ensure public sector resources are used most effectively .

The parallel approval approach for permits and planning applications used for Nationally Significant Infrastructure Projects should be expanded to all brownfield and housing developments significant enough to justify an Environmental Impact Assessment.

The Government should ensure that existing planning consents, which cannot be commenced because of an inability to clear conditions owing to new advice under the habitats regulations, are automatically extended for a further three years.

The Government should remove the need for a habitats regulations assessment to be undertaken for post-permission approvals for at least three years and for longer where development has been substantially started within the appropriate timescales for the development.

We were disappointed to learn of the Government’s decision to not consult on nutrient and water neutrality guidance despite time being available. This choice was unnecessary and led to serious ramifications. It is indicative of a wider issue: communication on new or evolving environmental regulations is often not provided in a timely way, lacks detail and practical solutions, or is difficult to understand. This inhibits the ability of developers and local planning authorities to respond appropriately, so delaying development.

Those who deliver policy through the planning system should be consulted on the content and drafting of relevant advice. Defra and DLUHC should work with Natural England and the Environment Agency to develop a suitable consultation method which can be used ahead of issuing advice under the Habitats Regulations. Where necessary this should allow for confidential discussions.

We are sympathetic to the fact that the use of secondary legislation will allow for regulations and policy to respond to the “fast-changing nature of environmental science”. This does not preclude the Government from setting out how the policy will be implemented in the immediate term.

Given the impact of uncertainty in the planning system on the delivery of new homes, the Government should ensure that policy is communicated clearly and in a timely manner. For a transition period to be successful stakeholders need to know to what they are transitioning. Statutory dates for the implementation of new regulations should reflect the lead times for development with the full policy detail available.

By the end of 2023 , the Government should publish its timeline for reviewing and updating all National Policy Statements.

Effective moratoria on housebuilding caused by advice such as nutrient and water neutrality risk putting small developers out of business in affected areas.

All public sector development mitigation schemes should prioritise provision for small developers.

Following the passage of the Levelling-up and Regeneration Bill, the Secretary of State should use their powers to ensure that all wastewater treatment works with capacity for a population of 250 are upgraded by the 2030 deadline.

Allowing local planning authorities to require biodiversity net gain ahead of the delayed statutory deadline negates the benefit of this accommodation. Where the Government has announced a transition period and implementation date local planning authorities should not be able to act ahead of it.

The Government should ensure that local planning authorities are prohibited from introducing biodiversity net gain requirements above the 10 per cent minimum for small sites. These sites should be exempt from following the mitigation hierarchy and immediately permitted to deliver an offsite solution.

Large, and growing, up-front costs disincentivise developers of all sizes from entering the housing market. For smaller developers with limited access to finance they are a greater burden. Whilst developers are willing and able to cover these costs in many circumstances, they should not be asked to fund inapplicable surveys.

The Government should review the range of ecological assessments required of developers. It should issue guidance to local planning authorities on which assessments can be discretionary for smaller sites, rather than required up front.

Too often, the outcome of government policies and regulations place responsibility for preventing and addressing historic pollution onto those with limited, if any, power to effect change. Balancing the social, environmental and economic benefits and costs of development is a difficult task requiring expertise, evidence, ability and genuine willingness to effect change: it is a matter for the Government and Parliament.

The full suite of environmental regulations delivered through the planning system should be reviewed and, if necessary, considered for amendment to ensure that they are in line with the Government’s environmental principles policy statement. Addressing nutrient pollution

The Government has acknowledged this imbalance in addressing nutrient pollution. Trudy Harrison MP, Minister for Natural Environment and Land Use told us “I absolutely sympathise and agree that it feels incredibly unfair to housebuilders.” 107 Box 4: The Netherlands’s nitrogen strategy The Netherlands has 160 Natura 2000 sites and, like all member states, is required by EU law to maintain and restore these areas and avoid activities that could results in their deterioration. The Netherlands has the second highest nitrogen balance (surplus) in Europe and has the highest density of livestock in Europe. 108 In 2019, the Council of State (the highest administrative court) ruled that a nitrogen permitting approach in the Netherlands was contrary to environmental law. 109 This made it difficult for new nitrogen-emitting projects, including housing development, to get permits to build and caused delays to thousands of projects. The 2021 coalition Government set out a nitrogen strategy which includes measures for industry, agriculture, transport and the construction sector to reduce nitrogen deposition and improve the quality of nature areas. 110 The intention is to reduce nitrogen emissions by 50 per cent by 2030 and the plan has an associated budget of €24.3 billion. A key part of this is a planned government buy out of some 3,000 highly polluting farms located close to Natura 2000 areas that could be shut down. The government plans to pay them 120 per cent of the value of their businesses to stop producing. 111 Farmers across the Netherlands have been protesting over concerns that the plan may require a one-third reduction in the country’s livestock herd and may result in the forced purchase of farms to close them down. 112 This issue led to the Farmer-citizen movement (BBB) being set up which, in the March 2023 provincial elections, became the largest party in the Dutch Senate.

In the Netherlands, the courts required the Government to develop a coherent plan taking difficult decisions at a national level about the desired balance between housing, farming and other sectors to address nutrient pollution.

The UK Government’s proposed solution to this issue is the Integrated Plan for Water, which aims to “transform management of the whole water system, deliver a clean water environment for nature and people, and secure a plentiful supply of water”. 113 It seeks to take a system wide approach including aiming to reduce pollution from wastewater (legislated through the Levelling-Up and Regeneration Bill), urban areas, transport, farms and metal mines. 114

It is unclear how this plan will be implemented. John Curtin, interim Chief Executive of the Environment Agency, suggested that resolving the implementation approach for the IPW would require political decisions on the balance of responsibility between sectors for addressing nutrient pollution: “How bold will you be? Do you want to buy X or Y farms to really reduce the nutrient effect there so that you can unlock development? Do you want a glide path that is more equitable across all sectors?” 115

Local housebuilding remains stalled in many areas owing to the condition of protected sites; therefore, answering these questions to ensure the Integrated Plan for Water can be properly implemented is vital for local economies, to address the housing crisis and for the environment.

We were concerned to hear that the Government’s Integrated Plan for Water, proposed as the solution to nutrient pollution, is not yet able to deliver genuine change. The Government has shied away from taking the necessary decisions and risks failing to improve the situation in line with international commitments.

The Government must prioritise implementing the Integrated Plan for Water and publish the information sought by its arm’s-length bodies, including setting out the balance of priorities between farming and other sectors in addressing nutrient pollution. In doing this it should be cognisant of the experience in the Netherlands ( see Box 4).

The Government should develop integrated plans for addressing all areas of conflict between development and environmental policies before legal backstops are reached and development is halted. These must include implementation plans and be in line with the environmental principles policy statement.

We welcome proposals in the Levelling- up and Regeneration Bill for the Environment Agency to review the environmental permits of plants which discharge treated effluent into catchments impacted by nutrient pollution. This should be expanded to agricultural activity. The Environment Agency should inspect all farms within the 27 catchment areas subject to nutrient neutrality advice by the end of 2024 to ensure they are operating within their permitted pollution levels and enforce standards on those that are not. Focus on new development

All the environmental regulations on which we received evidence have applied to the development of new homes, infrastructure or other amenities. This is because regulations and guidance generally cannot be applied retrospectively: once a house is constructed and sold, upgrading its energy or water efficiency becomes the responsibility of the individual homeowner. 116

This focus on new development means that an opportunity to reduce pollution or improve efficiency within existing developments may not be utilised. In 2021 there were 24.9 million dwellings in England. 117 In 2021/22, there were 232,820 net additional dwellings completed, a gain of 0.9 per cent. New homes are at the “forefront of energy efficiency”; 118 and can deliver water efficiency well above standards. 119 New development (certainly new housing development) is a small part of overall pollution and the current emphasis on their contribution is unbalanced. 120 Box 5: Crawley Borough Council water mitigation In September 2021, Natural England issued a Position Statement advising water neutrality should be required for planning permissions in the Sussex North Water Resource Zone. Several commercial developments in the area demonstrated they would be less water consumptive than the existing use on a site. Mitigating the increase water use of new homes has been more challenging. Crawley Borough Council is retrofitting its own housing stock with water efficiency appliances to reduce water consumption. This creates water neutrality credits which can be used for new housing development. By improving the water efficiency in 5,500 homes, the council has offset the water consumption of 206 new houses and flats, a ratio of 27:1. This approach should be cost neutral for the local planning authority. It has required upfront spending of £1 million which will be recovered from developers as they bring sites through the planning process. 121 Source: Written evidence from Crawley Borough Council ( IER0025 )

Schemes to improve the condition of existing stock can be centrally managed and delivered for council owned properties but can only be incentive based for privately owned stock. Private sector companies have been seeking to encourage people to upgrade their septic tanks in order to create phosphate credits with the promise of a cash incentive and servicing. 122

New development can contribute to environmental damage; however, it is important that the ongoing and long-term impact of historic housing stock and agricultural practices are addressed.

The Government should explore how mitigation schemes could finance improving existing housing stock, building on the model in Crawley. It is unlikely that this approach will provide sufficient offsetting to meet housing demand, but it should be considered a key part of the solution and a suitable route to contribute to the Government’s levelling-up mission to improve housing quality. 123 Protected sites

There is a target to restore 75 per cent of protected sites to a favourable condition by 2042. 124 Natural England holds an objective to achieve ‘favourable condition’ status for all Sites of Scientific Interest (SSIs), meaning that the habitats and features are in a healthy state and are being conserved by appropriate management. 125 In June 2023, 39 per cent of SSSIs were in a favourable condition; in 2003, 44 per cent were in a favourable condition. 126 Richard Benwell, CEO of the Wildlife Countryside Link, told us “68 per cent of Sites of Special Scientific Interest have not been visited or monitored in the last six years”. 127 Natural England has tools to secure the good management of SSSIs but has used them only nine times in the previous 20 years. 128

We heard that the Government “has taken inadequate proactive action” 129 to ensure the condition of all protected sites. The resultant poor condition of sites has led Natural England to issue standing advice for certain geographic areas, forcing local planning authorities to require mitigation or refuse planning applications. 130

Regulatory enforcement is necessarily reactive, but this lack of monitoring forces policy making and problem solving also to be reactive. A lack of forward planning and programmes means issues cannot be addressed before they reach this legal backstop. Crawley Borough Council told us: “If early warning signs related to the impact of abstraction by Southern Water on the protected habitats had been picked up earlier through Natural England being fully resourced to undertake monitoring, the water industry regulators (Environment Agency and OFWAT) could have required Southern Water to bring in alternative water supply solutions sooner as part of their Water Resources Management Plan.” 131

In their recent report, Protected areas, the House of Lords Environment and Climate Change Committee raised concerns about the degradation of protected sites across the country. 132 This contributes to the Government not being on course to meet the ‘30 by 30’ target agreed under the Kunming-Montreal Global Biodiversity Framework. 133

In August 2023, the Government announced it would undertake “further work on developing Protected Sites Strategies” for those sites impacted by nutrient neutrality. 134 The intention is for these to agree actions to reduce nutrient pollution at its source. 135

The condition of protected areas in the UK has a direct impact on development. When not maintained, their poor condition can cause an immediate halt in housebuilding. Statutory bodies and others have known about the poor state of some protected areas for several years but there has been no overall improvement.

Given the importance of site condition and classification to the planning process and decision making there should be greater transparency over the assessment process. Natural England should publish its detailed scientific justification for any site assessment in an easily accessible and understandable format.

Natural England’s new Protected Sites Strategy approach should be extended to all protected sites in an ‘unfavourable’ condition. These strategies should include a time-bound action plan for restoring its condition in line with the environmental principles policy statement. 56 Planning and Compulsory Purchase Act 2004, section 38 57 Department for Levelling Up, Housing and Communities, National Planning Policy Framework , para 11 58 Savills, ‘Planning Data Update 2023’ (11 January 2023): https://www.savills. co.uk/research_articles/229130/338073-0 [accessed 6 September 2023] 59 Lichfields, ‘Planning matters: Failing to plan or planning to fail? The State of Local Plan-Making’ (20 April 2023) https:// lichfields.uk/blog/2023/april/20/failing-to-plan-or- planning-to-fail-the-state-of-local-plan-making/ [accessed 6 September 2023] 60 Department for Levelling Up, Housing and Communities, News story: Long-term plan for housing 61 Ministry of Housing, Communities and Local Government, ‘Councils urged to ensure Local Plans are up to date’ (19 January 2021): https://www.gov.uk/government/news/councils-urged -to-ensure-local-plans-are-up-to-date [accessed 6 September 2023] 62 Q 31 (Richard Blyth) 63 Department for Environment, Food and Rural Affairs, ‘Air Quality Management Areas (AQMAs)’: https://uk-air.defra.gov.uk/aqma/ [accessed 30 August 2023] 64 Q 31 (Carolyn Mackenzie) 65 Written evidence from the Environment Agency ( IER0013 ) 66 Ibid. 67 Royal Town Planning Institute, ‘Planning for a better future: RTPI Proposals for Planning Reform in England’ (March 2023): https://www.rtpi.org .uk/policy-and-research/planning-for-a-better-future/ [accessed 23 August 2023] 68 Written evidence from the Wildlife and Countryside Link ( IER0023 ) 69 Select Committee on Land Use in England, Making the most out of England’s land (Report of Session 2022–23, HL Paper 105) and Environment and Climate Change Committee, An extraordinary challenge: Restoring 30 per cent of our land and sea by 2030 (2nd Report, Session 2022–23, HL Paper 234) 70 Q 119 (Professor Emma Lees) 71 Q 130 (Professor Emma Lees) 72 Ibid. 73 Department for Environment Food and Rural Affairs, Government food strategy 74 Written answer HL2 273 (20 September 2022) 75 QQ 112 - 113 (Dr Richard Benwell), Q 107 (Joseph Lewis) 76 Q 112 (Dr Richard Benwell) 77 Select Committee on Land Use in England, Making the most out of England’s land (Report of Session 2022–23, HL Paper 105) 78 Q 112 (Dr Richard Benwell) 79 Department for Levelling Up, Housing and Communities, National Planning Policy Framework , para 33 80 Built Environment Committee, ‘The impact of environmental regulations on development: summary of SME engagement event’ (2 August 2023): https://committees .parliament.uk/publications/41101/documents/200221/default/ 81 Q 113 (Dr Richard Benwell) and Local Government Association, Habitats Regulations advice for LPAs (15 November 2022): https://www.local.gov. uk/pas/topics/environment/nutrient-neutrality-and-planning-system/habitats- regulations-advice-lpas [accessed 23 August 2023] 82 Q 113 (Dr Richard Benwell) 83 Local Government Association, Habitats Regulations advice for LPAs 84 Q 45 (Hamish Walke) 85 Nutrient neutrality advice, for example, only applies in those catchments were connected protected sites are in an unfavourable condition. 86 For example, in south Cambridgeshire where the Environment Agency has reduced water abstraction licences owing to the impacts on protected habitats and is subsequently issuing advice against all EIA developments owing to insufficient water supply. The LPA has raised concerns that this undermines allocations within its current local plan. South Cambridgeshire District Council, Letter to Alison Dyson, The Planning Inspectorate, from the Environment Agency, (23 May 2023), page 8: https://www.scambs.gov.uk/media/23727/cd1300-environment-agency- final-statement-23-may-2023.pdf [accessed 23 August 2023] 87 Q 7 (Professor Liz Fisher) 88 Q 29 (James Stevens), Q 45 (David Lowe) 89 Q 29 (James Stevens) 90 Built Environment Committee, ‘The impact of environmental regulations on development: private roundtable with volume housebuilders’ (10 July 2023): https ://committees.parliament.uk/publications/40809/documents/198879/default 91 Ibid. 92 Department for Environment Food and Rural Affairs, Government food strategy 93 Built Environment Committee, The impact of environmental regulations on development: private roundtable with volume housebuilders 94 Ibid. 95 Department for Environment Food and Rural Affairs, Policy paper: Environmental principles policy statement (updated 31 January 2023): https:// www.gov.uk/government/publications/environmental-principles-policy-statement/environmental- principles-policy-statement#environmental-principles-an-overview [accessed 23 August 2023] 96 Ibid. 97 Ibid. 98 Written evidence from the Home Builders Federation and the Land Promoters and Developers Federation ( IER0031 ); Gladman Developments Ltd ( IER0020 ); Councillor John Fuller OBE, Leader of South Norfolk District Council ( IER0027 ); and Lands Improvement Holdings Ltd ( IER0009 ) 99 Written evidence from Water UK ( IER0021 ) 100 Ibid. 101 ‘Loophole lets farmers pollute England’s rivers with excess manure—report’, The Guardian (13 July 2023): https://www. theguardian.com/environment/2023/jul/13/loophole-lets-farmers-pollute- uk-rivers-with-excess-manure-report [accessed 23 August 2023] 102 Q 167 (John Curtin) 103 ‘Housebuilders attack double standards as farmers pollute’, The Times (8 August 2023): https://www. thetimes.co.uk/article/66d58c0e-35f4-11ee-8810-d3022cd752ba [accessed 23 August 2023] 104 Written evidence from Land Improvement Holdings Ltd ( IER0009 ) 105 Ibid. 106 Ibid. 107 Q 199 (Trudy Harrison MP) 108 Eurostat Statistics ‘Explained, Agri-environmental indicator - livestock patterns’ (January 2023): https://ec. europa.eu/eurostat/statistics-explained/index.php?title=Agri-environmental_ indicator_-_livestock_patterns [accessed 23 August 2023] 109 ‘Setback for government as Council of State throws out new nitrogen rules’, Dutch News (2 November 2022): https://www.dutchnews.nl/2022/11/ setback-for-government-as-council-of-state-throws-out-new- nitrogen-rules/ [accessed 23 August 2023] 110 Government of the Netherlands, ‘The nitrogen strategy and the transformation of the rural areas’: https://www.government.nl/topics/nature-and-biodiversity/the-nitrogen-strategy-and-the-transformation-of-the-rural-areas [accessed 23 August 2023] 111 ‘Brussels gives green light to Dutch farm buyout plan’, Dutch News (2 May 2023): https ://www.dutchnews.nl/2023/05/brussels-gives-green-light-to-dutch -farm-buyout-plan/ . [accessed 23 August 2023] 112 ‘The easy guide to the Dutch nitrogen crisis, farmers’ protests, and more’, Dutch Review (13 October 2022): https://dutchreview.com/culture/ dutch-nitrogen-crisis-explained/ [accessed 23 August 2023] 113 Department for Environment Food and Rural Affairs, Policy paper: Plan for Water: our integrated plan for delivering clean and plentiful water 114 Ibid. 115 Q 169 (John Curtin) 116 Q 155 (Alan Law) 117 Office for National Statistics, ‘Housing in England and Wales: 2021 compared with 2011’ (30 March 2023): https://www.ons.gov.uk/peoplepopulationandcommunity/housing/articles/housinginenglandandwales/2021comparedwith2011 [accessed 23 August 2023] 118 Written evidence from Land Improvement Holdings Ltd ( IER0009 ) 119 Letter to Alison Dyson, The Planning Inspectorate, from the Environment Agency 120 Written evidence from Crawley Borough Council ( IER0025 ) 121 Ibid. 122 WCI, ‘A septic tank upgrade shouldn’t cost the earth’: https://www.wci.co.uk/nutrient-neutrality/phosphate-scheme-for-home-owners/ . [accessed 6 September 2023] 123 HM Government, Levelling Up the United Kingdom, CP 604 (2 February 2022): https://assets.publishing.service.gov.uk/government/uploads/system/ uploads/attachment_data/file/1052708/Levelling_up_the_UK_white_ paper.pdf [accessed 6 September 2023] 124 Department for Environment, Food and Rural Affairs, Environmental Improvement Plan 2023 125 Natural England, Guidance: Sites of special scientific interest: managing your land (updated 18 May 2023): https://www. gov.uk/guidance/protected-areas-sites-of-special-scientific-interest# achieving-favourable-condition [accessed 23 August 2023] 126 Natural England, ‘ Designated Sites View: SSSI Feature Condition Summary’ : https://designatedsites.naturalengland .org.uk/ReportFeatureConditionSummary.aspx?SiteType=ALL [accessed 23 August 2023] 127 Q 112 (Dr Richard Benwell) 128 Written evidence from the Wildlife Countryside Link ( IER0023 ) 129 Q 97 (Ben Kite) 130 Q 113 (Dr Richard Benwell) 131 Written evidence from Crawley Borough Council ( IER0025 ) 132 Environment and Climate Change Committee, An extraordinary challenge: Restoring 30 per cent of our land and sea by 2030 (2nd Report, Session 2022–23, HL Paper 234) 133 Ibid. 134 Department for Levelling Up, Housing and Communities, ‘News story: 100,000 more homes to be built via reform of defective EU laws’ (29 August 2023): https ://www.gov.uk/government/news/100000-more-homes-to-be -built-via-reform-of-defective-eu-laws [accessed 30 August 2023] 135 Ibid. < Back Next > © Parliamentary copyright 2023 A-Z index Glossary Contact us Freedom of Information Jobs Using this website Copyright Privacy notice Cookie policy Cookie Manager House of Lords - The impact of environmental regulations on development - Built Environment Committee Accessibility Email alerts RSS feeds Contact us Home Parliamentary business MPs, Lords & offices About Parliament Get involved Visiting Education House of Commons House of Lords What's on Bills & legislation Committees Publications & records Parliament TV News Topics The impact of environmental regulations on development Contents Chapter 4: Public sector structures and resourcing Structures and resourcing

Throughout this inquiry we have identified a wide range of public sector organisations involved in the creation and implementation of environmental regulations relating to development. These span two government departments; arm’s-length bodies such as Natural England, the Environment Agency and Homes England; and multiple tiers of local government. Central government and statutory bodies

The Association for Consultancy and Engineering and Environmental Industries Commission identified a lack of coherence, with “different environmental regulations … administered by different government agencies or departments, each with their own priorities and approaches. For example, regulations related to air quality may be administered by the Department for Environment, Food and Rural Affairs, while regulations related to water quality may be administered by the Environment Agency.” 136

By way of example, the Minister for Housing and Planning, Rachel Maclean MP, sits in DLUHC which is also responsible for local government finance and policy. 137 However, the introduction of biodiversity net gain and local nature recovery strategies has given Defra an active stake in the planning process. It is responsible for providing funding to support local planning authorities and upper-tier authorities to deliver these policies and leads on the relevant primary and secondary legislation.

In March 2022, Defra published a Nature Recovery Green Paper , which consulted on which “institutional and delivery arrangements would best support our nature recovery objectives.” 138 This presented an opportunity to consider the structural arrangement of the relevant arm’s-length bodies and address the “massive overlap” Tony Juniper, Chair of Natural England, described between the Environment Agency, Natural England and the Forestry Commission. 139 He acknowledged that that there were many ways government agencies could be configured. 140 This green paper also features as a key part of the Government’s ‘action plan’ for reforming the planning process for Nationally Significant Infrastructure Projects. 141

The Government has not published a response to this consultation. Dame Glenys Stacey, Chair of the Office for Environmental Protection, suggested that the optimum time for undertaking such change has now passed given a need to focus on the Government’s ambitious 2030 environment targets. 142

Restructuring Defra’s arm’s-length bodies could distract from the Government’s targets for 2030. Nonetheless overlap between the agencies must be reduced to deliver the best value for money and reduce delays and confusion for developers.

The Government should publish its response to the Nature Recovery Green Paper by the end of 2023. If structural changes are not made, a clear plan for eradicating unnecessary overlap and improving cross-organisational work should be published. This must focus on improving engagement at a project level. Improving collaboration

Regardless of the structure of the Government, there will be delineations between departments which need to be overcome through collaboration. This was felt to be poor between government agencies, especially Natural England and the Environment Agency, unless a project was deemed to warrant sufficient senior intervention. 143 Arup described systems and resources within the Environment Agency and Natural England as “frequently resulting in suboptimal conditions” for infrastructure projects. 144

In some instances, the actions and advice of Natural England and the Environment Agency appear to contradict each other. The Environment Agency is responsible for granting water abstraction licences and is the competent authority for ensuring that they will not cause significant harm to protected areas. 145 Natural England has advised the local planning authorities in the Sussex North Water Resource Zone that new development should not be permitted unless it can be proven not to inflict harm on protected areas through increased water abstraction. Despite Natural England’s assertion that additional water abstraction risks the condition of protected areas, the Environment Agency has not amended abstraction licences (as has been the case with a similar issue in Cambridgeshire). 146 It is unclear why Natural England and the Environment Agency take different views on the risks to these protected sites and why Natural England is advising a halt in all development while the Environment Agency continues to allow potentially harmful water abstraction. 147

The Home Builders Federation told us: “about two years ago, we wrote to Defra about [water and nutrient neutrality] and Defra said that it was a DLUHC matter; that it was nothing to do with it because it is housing. We had a similar response from DLUHC, which said that it was a Defra matter.” 148 The Minister for Housing and Planning and Homes England told us that there is now a ministerial level cross-government taskforce working to address nutrient pollution and resolve policy tensions. 149

Agencies and arm’s-length bodies have experience delivering policy ‘on the ground’ and in partnership with local communities and businesses. This is invaluable to the policy development process. Delivery expertise is necessary to ensure that policy is appropriate and is vital to ensuring that innovations are made at all levels of government. Homes England and the Planning Inspectorate told us they have regular contact with policy officials in DLUHC and both interact with Defra and its arm’s-length bodies at an operational and delivery level. 150

Alan Law, deputy Chief Executive Officer at Natural England, said they “engage directly with Defra and, to a lesser degree, with DLUHC and other departments, around their development of policy.” 151 Natural England is also involved in the development of implementation plans. The Environment Agency has a similar role.

We were pleased to discover that there is a Ministerial Taskforce on Nutrient Neutrality. We do not know what its remit and objectives are. It is disappointing that such cross-governmental working was not in place before housebuilding was effectively halted across 14 per cent of the country ’s land area. 152

The Government should pave the way in innovating how organisations collaborate and drive change. It should ensure that the delivery expertise and market understanding in Homes England and the Planning Inspectorate is accessible to all departments making policy that will affect development. As far as possible , practitioners should be included in policy development. When introducing new regulations or requirements on the planning system or for development, all government departments should be mandated to consult Homes England and the Planning Inspectorate.

When developing new advice or guidance which will affect the planning system, Defra and its agencies should undertake and publish an impact assessment. This should include insights from across government. Effective and efficient resourcing

Effectively resolving conflicts between development and environmental priorities is reliant on the technical expert advice provided by statutory consultees. 153 Both Natural England and the Environment Agency told us that they respond to most cases within agreed deadlines. 154

Citing a lack of resources, smaller and volume developers reported having significant difficulty engaging with both bodies outside the formal planning process, describing Natural England as a “faceless organisation”. 155 Some had experienced isolated instances of good practice or teams going above and beyond, including providing advice outside the statutory requirements. 156

We heard about similar experiences for Nationally Significant Infrastructure Projects, although Simon Blanchflower, former Chief Executive Officer of EastWest Rail Company, said that for major projects the access to support is better if one engages “at a sufficiently senior level”. 157 The Planning Inspectorate shared examples of challenges securing agency attendance at hearings or inquiries, especially where robust evidence in opposition to agency advice had been offered. 158

The Environment Agency and Natural England confirmed that they have received funding increases after a period of cuts. 159 We heard that the skills they have recruited are not as expert as those they had lost and it will take time for staff to “get fully up to speed.” 160 The Environment Agency was keen to understand more about the difficulties faced by developers; however, Alan Law, Deputy CEO of Natural England, did “not recognise the position that developers find it difficult to contact us.” 161

As part of an announcement on planning fees in July 2023, the Government said that it was developing proposals for a new planning performance framework, which will include considering the use of qualitative metrics such as customer feedback. It is unclear if this framework will apply to statutory consultees as well as local planning authorities. 162

Liz Hart, Director of Hart Environmental Limited, told us that, for soil reuse plans, developers can fund an independent assessment by a qualified person who will confirm to the competent authority that a developer’s risk assessment is in order. 163 She suggested that similar approaches could be developed for other technical assessments. This could reduce the need for the Environment Agency and local planning authorities to undertake or contract assessment themselves. This could be particularly useful for activity undertaken by statutory body area teams outside the statutory requirements, such as reviewing land quality or groundwater issues. 164

Public bodies are facing challenges recruiting and retaining ecological expertise. It is necessary to bring expertise into the system through recruitment or training current staff.

Additional funding has been provided for statutory bodies. In 2024, a review should be undertaken of the availability and accessibility of expertise in Natural England and the Environment Agency to identify and address any remaining gaps in expertise.

Statutory consultees should ensure sufficient resource is available for them to work with developers to address issues raised during the statutory process in a timely manner.

The Government should introduce targets for stakeholder satisfaction for its arm’s-length bodies as part of the proposed new planning performance framework. Feedback from developers and infrastructure promoters should be regularly sought and acted on.

The Environment Agency and Natural England should support the formalisation of a role for those experts who are part of the Nationally Qualified Mark Scheme. They should explore using this resource to provide independent reviews of relevant environmental assessments , funded by the developer, where the capacity is unavailable internally . Local planning authorities

The Government told us that the funding shortfall for planning application services is “estimated to be in the region of £225 million annually”. 165 Where funding to recruit is available it can be difficult to attract applicants: one council had to undertake three recruitment rounds before a Senior Planning Officer could be appointed. 166

This situation risks poorer outcomes for the environment owing to an inability of decision makers to apply environmental regulations and provide advice. 167 Natural England suggested this lack of the necessary skills had contributed to local planning authorities making increased demands of developers for information throughout the planning process. 168

In July 2023, the Government increased fees for planning applications by at least 25 per cent and announced that a further fees review will be carried out within three years. 169 Planning fees will be increased on 1 April each year in line with the Consumer Prices Index, capped at 10 per cent. The comprehensive resources and skills strategy promised in the 2020 White Paper Planning for the Future has not yet been published . 170

New regulations and burdens can be difficult for local planning authorities (LPAs) to meet without additional resources.

The unexpected publication of new position statements by Natural England can be much more disruptive. Hamish Walke, Water Neutrality Lead at Crawley Borough Council, told us the advice on water neutrality was “the first time that had happened in the country, so at the start we simply did not know what to do”. 171 They sought additional, expensive, consultant expertise at short notice. Even with this (unplanned) spending they could not avoid a two-month cessation in the granting of all planning permissions. 172 Similar advice relating to water usage is now in place for developments requiring an environmental impact assessment in South Cambridgeshire where the Environment Agency has issued objections to over 9,000 homes. 173

All LPAs affected by Natural England’s nutrient neutrality advice received additional funding from the Government, but not those impacted by water neutrality. 174 Water neutrality advice impacts development beyond housing—it relates to all development including the building of new schools—and the geographical limits of the advice mean there is less ability for affected LPAs to share the burden.

The slower pace for introducing biodiversity net gain, and the national impact, has seen the announcement of several waves of funding support for LPAs. Following an initial commitment of £4 million, a further £9 million was announced in July 2023 to help LPAs recruit additional ecologists and specialists. 175

We heard that where LPAs can share or pool resources and expertise it can result in greater efficiencies. Warwickshire County Council currently has 16 ecologists on staff. 176 The team operates service level agreements with the district and borough councils to review relevant planning applications and provide advice to developers for all ecological issues. This operates on a cost recovery principle. As a result, district and borough councils do not need to employ a full-time member of staff or access costly external consultant support. Whilst uncommon in England, this is like the approach to issuing environmental permits in the Netherlands. Assessment was moved from the municipality to the provinces because of the issues becoming “so complex that municipality departments do not have enough knowledge to deal with them.” This has helped developers as it ensures that appropriately qualified people are able to consider an issue. 177

We welcome the Government taking steps to address the funding shortfall in local authority planning departments. The Government should complete its proposed fees review within the next 12 months to provide greater long-term certainty for planning departments and applicants. The proposed skills and resources strategy should be published by the end of 2023.

The disparity in providing additional support between those areas impacted by nutrient and water neutrality is both unfair and illogical. Given the proliferation of new advice, ensuring early understanding and solutions are available could have wide reaching benefits.

The Government and statutory bodies must meaningfully consult local planning authorities on new advice and policy which will have an impact on their decision making as competent authorities. This process must allow sufficient time for expertise in handling new policy issues to be developed.

Local planning authorities should work with local partners and, where relevant, upper- tier authorities to share expertise and drive economies of scale. The approach taken by Warwickshire County Council should be considered a best practice example and delivered through two-tier authorities, mayoral combined authorities and joint ecological units. 136 Written evidence from the Association for Consultancy and Engineering and Environmental Industries Commission ( IER0026 ) 137 Department for Levelling Up, Housing and Communities, ‘Ministerial role: Parliamentary Under Secretary of State (Local Government and Building Safety)’: https://www.gov.uk/government/ministers/parliamentary-under-secretary -of-state--172 [accessed 23 August 2023] 138 Department for Environment Food and Rural Affairs, ‘Nature Recovery Green Paper: Protected Sites and Species ’ (March 2022): https://consult.defra.gov. uk/nature-recovery-green-paper/nature-recovery-green-paper/ [accessed 23 August 2023] 139 Q 156 (Tony Juniper) 140 Ibid. 141 Department for Levelling Up, Housing and Communities, Nationally Significant Infrastructure: action plan for reforms to the planning process (February 2023): https://www.gov.uk/government/publications/nationally-significant-infrastructure-projects-nsip-reforms-action-plan/nationally-significant-infrastructure-action-plan-for-reforms-to-the-planning-process#annex-a-nsip-reform-actions [accessed 30 August 2023] 142 Q 183 (Dame Glenys Stacey) 143 Q 52 (Simon Blanchflower); written evidence from Arup ( IER0036 ) and Partnership for South Hampshire ( IER0005 ) 144 Written evidence from the Home Builders Federation and the Land Promoters and Developers Federation ( IER0031 ) 145 Environment Agency, Managing water abstraction (April 2021): https://www.gov.uk/government/publications/managing-water-abstraction/managing-water-abstraction#Water [accessed 30 August 2023] 146 Written evidence from the Home Builders Federation and the Land Promoters and Developers Federation ( IER0031 ) 147 Ibid. 148 Q 29 (James Stevens) 149 Written evidence from Homes England ( IER0037 ) 150 Written evidence from the Planning Inspectorate ( IER0035 ) and Homes England ( IER0037 ) 151 Q 156 (Alan Law) 152 Q 22 (Paul Brocklehurst) 153 Q 43 (Hamish Walke) 154 Natural England respond to 90 per cent of planning applications within agreed deadlines. The Environment Agency responded to 88 per cent within agreed deadlines. Written evidence from HM Government ( IER0030 ) 155 Built Environment Committee, The impact of environmental regulations on development: summary of SME engagement event and The impact of environmental regulations on development: private roundtable with volume housebuilders 156 Written evidence from Hart Environmental Ltd ( IER0039 ) 157 Q 52 (Simon Blanchflower) and written evidence from the National Infrastructure Planning Association ( IER0011 ) 158 Written evidence from the Planning Inspectorate ( IER0035 ) 159 “The Environment Agency has seen cuts of 60 per cent in funding from 2010 to 2019; Natural England cuts are more like 70 per cent” Q 111 (Dr Richard Benwell). 160 Q 173 (John Curtin) 161 Q 153 (Alan Law) 162 Department for Levelling Up, Housing and Communities, Technical consultation: Stronger performance of local planning authorities supported through an increase in planning fees: government response (July 2023): https://www.gov. uk/government/consultations/increasing-planning-fees-and-performance-technical-consultation/ outcome/technical-consultation-stronger-performance-of-local-planning-authorities-supported- through-an-increase-in-planning-fees-government-response#planning-fees [accessed 30 August 2023] 163 Q 137 (Liz Hart). A further example, provided in written evidence, is the National House Building Council’s Land Quality Scheme, a paid for service to confirm reports meet a satisfactory standard to support future build warranty. Written evidence from Hart Environmental Ltd ( IER0039 ) 164 Written evidence from Hart Environmental Ltd ( IER0039 ) 165 Written evidence from HM Government ( IER0030 ) 166 Written evidence from Crawley Borough Council ( IER0025 ) 167 Written evidence from the Wildlife Countryside Link ( IER0023 ) 168 Written evidence from Natural England ( IER0007 ) 169 Department for Levelling Up, Housing and Communities, Technical consultation: Stronger performance of local planning authorities supported through an increase in planning fees: government response 170 Ministry of Housing, Communities and Local Government, Planning for the future: White paper (August 2020): https://assets.publishing.service.gov.uk/government/uploads/system/ uploads/attachment_data/file/958420/MHCLG-Planning-Consultation.pdf [accessed 30 August 2023] 171 Q 44 (Hamish Walke) 172 Written evidence from West Sussex County Council ( IER0018 ) 173 South Cambridgeshire District Council, Appellant: Brookgate Land Ltd on behalf of the Chesterton Partnership LPA Updated Position Statement—15 June 2023 : https:// www.scambs.gov.uk/media/23730/cd1303-ea-appendix-2- gcp-draft-briefing-note.pdf and Appellant: Brookgate Land Ltd on behalf of the Chesterton Partnership LPA Updated Position Statement— 15 June 2023 : https://www.scambs.gov.uk/media/23852/ id104-updated-water-resources-position-statement-15-june-2023.pdf [accessed 30 August 2023] 174 Written evidence from Horsham District Council ( IER0001 ) and Land Promoters and Developers Federation ( IER0010 ) 175 Department for Environment, Food and Rural Affairs, ‘Biodiversity Net Gain moves a step closer with more funding’ (27 July 2023): https://www.gov.uk/government/news/biodiversity-net-gain-moves- a-step-closer-with-more-funding [accessed 30 August 2023] 176 Q 43 (David Lowe) 177 Q 125 (Professor Gert de Roo) < Back Next > © Parliamentary copyright 2023 A-Z index Glossary Contact us Freedom of Information Jobs Using this website Copyright Privacy notice Cookie policy Cookie Manager House of Lords - The impact of environmental regulations on development - Built Environment Committee Accessibility Email alerts RSS feeds Contact us Home Parliamentary business MPs, Lords & offices About Parliament Get involved Visiting Education House of Commons House of Lords What's on Bills & legislation Committees Publications & records Parliament TV News Topics The impact of environmental regulations on development Contents Chapter 5: Project-specific challenges

It is clear that a coherent plan from central government, which balances the trade-offs between housing and infrastructure development, protecting and improving the environment, and ensuring food security, is a matter of urgency. Beyond this vacuum at a strategic level, we have also identified ways in which the implementation of regulations is having unintended consequences or leading to poorer outcomes for both developers and the environment. In this chapter we consider the structure of mitigation schemes in more detail, explore the information required alongside a planning application and address specific challenges for brownfield development. The function of mitigation schemes

As discussed in Chapter 3, when it is identified that a development proposal will have an impact on the environment, it is usually required to mitigate the impact. This is done through: on-site measures to reduce harm; payments through the section 106 process 178 ; delivering an alternative habitat or reducing pollution off site through their own means; or buying credits from a government or private mitigation scheme to deliver a centralised off-site solution. The approach to biodiversity net gain is similar. Developers are expected to minimise the impact as much as possible and prioritise delivering gains within a development. If that is not possible then credit purchasing schemes can be used. Availability and costs

For issues such as recreational impact zones, there are several examples across England which could be adapted to a local area. When new advice is issued for a protected site the delivery of new homes or infrastructure may be delayed while a solution is developed but the impact will likely not be significant in the long term (after recreational impacts on the Chiltern Beechwoods SPA were identified in March 2022, a mitigation strategy was agreed by Central Bedfordshire in March 2023) 179 . In contrast, when a new regulation or requirement is introduced, it can be many years until mitigation is available to the market. Box 6: Nutrient Neutrality Natural England told us the Government decided not to launch a mitigation scheme alongside the publication of its nutrient neutrality advice as it expected private markets would deliver a mitigation scheme. 180 The success of this was limited by a lack of market rules for nature-based solutions and, more recently, by reports of a change in government policy on nutrient neutrality providing a disincentive to invest in schemes. 181 In March 2023, Natural England opened a mitigation scheme in the Tees Valley and will shortly open schemes in six other catchments. 182 In the Solent area the local planning authority is running a mitigation scheme and the Department for Levelling Up, Housing and Communities has launched a Local Nutrient Mitigation Fund for local planning authorities to develop their own schemes. 183 There are no active mitigation schemes for phosphate pollution. The schemes are managed in different ways. 184 Some of the nutrient mitigation schemes operate on a ‘first come first served’ basis; others prioritise based on factors such as development scale or affordable housing provision.

The cost of providing mitigation varies significantly between individual schemes and across geographic areas. The Country Land and Business Association described nutrient mitigation costs as a “postcode lottery” even within local planning authorities (LPAs). 185 Examples of the charges associated with recreational impact mitigation include North Norfolk at £210.84 per net new residential and tourism accommodation dwelling and Stroud District Council charging £994 per new dwelling. 186 Developers argued these costs reduce the amount of other ‘public good’ provisions developers can deliver including affordable housing. 187

Developers must offset the pollution caused by their scheme in total and this can be impacted by property size and on-site management methods. 188 For nutrient neutrality the performance of local wastewater treatment works is a key determinant in the amount of mitigation required. 189 Where a local planning authority develops a scheme, such as those described for recreational impact zones, they may choose to charge a flat rate per dwelling regardless of the size of the property.

When new costs are introduced—most recently with the introduction of biodiversity net gain—they can present challenges for viability on sites purchased before the requirements were in place. Homes England told us “this is thought to be a diminishing impact as going forward biodiversity net gain will be designed into schemes from the outset.” 190 Warwickshire County Council experienced little challenge from developers on mandatory biodiversity off-setting because they appreciated the certainty provided by the policy: “developers knew why they were doing it and how to do it.” 191 Successful recreational impact schemes where fixed costs per home are charged by the relevant LPA have not caused long-term reductions in housing delivery. 192 Where costs remain unpredictable, or requirements change unexpectedly, this certainty cannot be achieved.

It is unrealistic to expect the market to immediately provide a private sector mitigation solution for new regulatory schemes, especially where there is political uncertainty about their longevity. When new types of mitigation are required owing to advice from statutory consultees, the Government should work with Natural England to provide public sector mitigation schemes in the immediate term. These can be closed to new applicants or become a provider of last resort when a private sector market has developed.

The lack of managed credit-purchase mitigation schemes for specific pollutants or in certain areas is restricting developers’ ability to gain planning permission . Mitigation networks, organised by Natural England, should be created to share expertise and learning between affected local planning authorities. These networks should develop standard mitigation models for local planning authorities to use when a new requirement comes to their local area.

Where there is a model in place for cost recovery through the planning process, the Government should provide up front funding to local planning authorities to undertake mitigation activity. This could be repaid through the creation of a local credit scheme to ensure that mitigation schemes are available to all developers.

It is unfair that, when using schemes which charge on a per dwelling basis, smaller properties are faced with a relatively larger cost. Local planning authorities should be encouraged to ensure schemes have a charging scale based on the number of bedrooms or square meterage of homes and is thus more directly related to the potential impact of new homes. Effectiveness of mitigation schemes

Requiring project-level mitigation of pollutants and mandating on-site delivery of biodiversity net gain risks poorer results for residents and nature. 193 The Environment Bank is critical of the Government’s preference for onsite mitigation for biodiversity net gain. It considers that mitigation and compensation delivery within a development boundary is largely incapable of securing net positive outcomes for nature—placemaking and green space provision ought to be distinct focuses from biodiversity, and onsite mitigation should not be a substitute for quality placemaking. 194

The National Infrastructure Commission, in its review of the planning system for infrastructure also called for a more strategic approach to environmental mitigation. There is a not always a consistent approach to mitigation, nor effective monitoring and enforcement, meaning that environmental groups identify that does not deliver the best outcomes. 195

However, on-site mitigation in sufficiently large development sites can ensure that local people remain connected to nature in their area and do not suffer only the negative impacts of development whilst benefits are felt elsewhere. 196

A multi-phase development, such as the Houlton urban extension in Rugby, can take a much wider consideration of how and where to provide habitats for species such as the great crested newt. This does not risk the creation of small pockets of green space which could lead to complaints from residents. 197 Where such a strategic approach is not possible owing to the size of a development, there are clear benefits to taking a strategic approach across a local area.

The introduction of a district level licensing scheme for great crested newts has led to a more strategic consideration of necessary habitats and unfavourable areas for development. 198 Mapping shows the most important areas to conserve and identifies target areas for new or restored ponds to compensate for the loss of habitats. Developers pay a fee to obtain a licence which funds the mitigation activity. 199 Natural England argued these deliver better outcomes for nature and reduce delays for developers. 200 The National Infrastructure Commission cites this scheme as a positive example of a strategic environmental mitigation scheme. 201

Local nature recovery strategies, introduced in the Environment Act 2021, could provide a strategic context for the delivery of biodiversity net gain, and other nature-based mitigation. 202 The plans would coordinate mitigation local to the affected areas while operating at sufficient scale to improve outcomes for nature. Ben Kite suggested local planning authorities could consider developing a local biodiversity net gain tariff to support the delivery of their local nature recovery strategies where developers cannot deliver on-site gains. 203 Box 7: Thames Basin Heaths zone of influence At Thames Basin Heaths a strategic approach has been taken to recreational disturbance within 5km of the Special Protection Area (SPA). Local development plans across 11 local planning authorities require developers to make financial contributions to Suitable Alternative Natural Greenspace (‘SANGs’) and strategic access management and monitoring measures. For example, Surrey Heath Borough Council levies a fee of £112.50 per square metre. 204 The approach removes the need for project-level assessments in this respect and the development of tailored mitigations. As a result of this centralised approach, despite a 12 per cent increase in housing stock within 5km of the SPA, populations of the three SPA bird species increased. Eighty SANGs (1,500ha of new or improved greenspace) are open to the public and £20 million of funding has been provided for wardening. Source: Written evidence from Natural England ( IER0007 )

There is a preference among developers of all sizes for off-site mitigation to be managed centrally with clear and predictable costs to allow them to factor these into land value calculations. In these circumstances, the costs can be borne by a development and the outcomes provide greater benefit to the environment.

Natural England’s District Level Licensing scheme for great crested newts has reduced costs and increased certainty for infrastructure and housing developers where it operates while maximising the benefits for species conservation. The Government should expand this approach to other protected species.

The Government should support the authorities responsible for local nature recovery strategies to ensure that they bring together information and actions to enhance the environment. Relevant authorities should develop biodiversity net gain credit schemes which support the delivery of local nature r ecovery strategies so that off-site delivery continues to benefit residents in the local area. Monitoring and enforcement

Mitigation schemes and biodiversity net gain place responsibility on developers to fund or directly deliver long-term benefits to the environment. As well as granting the necessary planning permissions, local planning authorities are responsible for monitoring and enforcing this work. Biodiversity net gain introduces a new 30-year timeframe over which these outputs must be monitored.

The Government told us, regarding Environmental Impact Assessments, that a lack of post-development monitoring had created uncertainty over the effectiveness of mitigation measures and led to issues being revisited in future assessments. 205 Similar concerns were raised over the monitoring of the new biodiversity net gain requirement: there are questions on the balance of responsibility for monitoring the 30-year delivery of biodiversity net gain, how it will be done given the unavailability of data, how enforcement will be effective if a developer is no longer in business, and whether there will be sufficient resources to undertake this activity. 206

More detail should be provided on the proposed approach to monitoring and enforcing the long- term delivery of biodiversity net gain. Where local planning authorities are required to undertake ongoing monitoring, the Government should provide sufficient resources for this. The Office for Environmental Protection should have a role in ensuring local planning authorities undertake ongoing monitoring and enforcement. Information requirements

When submitting a project proposal, a developer is required to produce an environmental statement detailing the expected impact on habitats, water quality, local species and other site-specific issues. This document is usually produced by an environmental or ecological consultant. For developments over a certain size and Nationally Significant Infrastructure Projects a single assessment is produced following the approach set out in the relevant Environmental Impact Assessment regulations. 207 Demands and costs

For individual assessments, we heard that the expectations of developers are clearly defined, well understood and often appropriate. 208 However, overall, the scale and range of assessments and associated surveys has increased. WSP, an engineering and professional service firm, noted the Environmental Statement accompanying the High Speed 1 applications in 1994 consisted of 10 documents and was 900 pages long; the 2013 High Speed 2 statement was 536 documents and 39,610 pages long. 209

The costs of completing surveys can be significant. Developers and promoters must make a substantial financial outlay at the beginning of a project. The Country Land and Business Association warned that “the fear of excessive costs … deters people from applying [for planning permission].” 210 Jan Bessell, Chair of the National Infrastructure Planning Association, said that this project-by-project assessment requirement “can be hugely expensive at the pre-application stage, which is the hardest to fund for privately funded and promoted infrastructure projects.” 211

Costs can also increase owing to surveys being time sensitive and time limited. Surveys of protected species like the great crested newt can only take place at certain times of year. Lands Improvement Holdings Ltd highlighted that the need to repeat surveys which had gone out of date while a project progressed through the planning system caused costs to “spiral”. 212

Developers told us they had experienced increased requests for ecological surveys from local planning authorities before planning applications would be validated and, in some instances, there was no clear justification for the request. 213 In one example new requests were made part way through the planning process when a new officer was assigned to an issue. 214 The Minister for Housing and Planning, acknowledged “we need to apply a more consistent approach so that we are not asking people to redo things over and over again.” 215

The requirement for robust environmental data accompanying development applications should remain. However, the Government should ensure that local planning authorities are mandated to validate a planning application if it fulfils the published list of information required. 216

The Government should ensure that where planning applications are delayed in the planning system beyond the statutory or agreed time limit the lifespan of necessary surveys is extended. Data and analysis

By focusing on the land within a red line boundary to undertake assessments, developers may not identify relevant species or habitats in nearby nature sites which are important to the local community and give rise to subsequent objections. 217 Additionally, even in instances where data could be usefully shared between developers and potentially reduce costs and improve environmental understanding there can be a reticence to do so owing to intellectual property rights. 218

Natural England told the committee that a national verified environmental database would benefit all participants in the planning process. 219 Jan Bessell, Chair of the National Infrastructure Planning Association, thought that it would reduce costs for developers and infrastructure promoters at the pre-application stage (even if this was a paid-for service) and reduce conflict and challenge owing to having an agreed assessment point and confidence in the veracity of data. 220

Local Environmental Records Centres and National Recording Schemes can be credible sources of baseline data; however, their value to the planning system is impacted by reduced investment and support for volunteer programmes. 221 The reliance on volunteers and independent organisations for species-wide data can lead to variations in the quality and accessibility of the information. 222

Collecting and reviewing data across a broader geographic region, as seen in the great crested newt District Level Licensing Schemes, can overcome costs and provide greater certainty. 223 The licensing schemes reduced the time it took to obtain a licence from 100 days to 10 days and is estimated to have saved the housebuilding sector over £200 million. 224 Box 8: Hampshire County Council Environmental Data and Advice Service Hampshire County Council provides an Environmental Data and Advice Service. This involves a team of specialists providing professional environment and planning advice and interpretation of data for interested developers ahead of commencing the planning process. An Environmental Data and Advice Service report provides site assessment information for any location in Hampshire, giving a “detailed desktop analysis” of the site and listing constraints and opportunities for developers. This might include the presence of a protected species or site designation; water management information; and mineral resources. The cost of a full report is £1,450 plus VAT for sites up to 0.5 hectares. Source: Hampshire County Council, Environmental Data and Advice Service : https://www.hants.gov.uk/landplanningandenvironment/sharedexpertise/whatwedo /environment/edas [accessed 6 September 2023]

The Government told us it expects a digitised planning system to enable greater transparency of planning data, including environmental data. However, it was unclear how this proposal would address those areas where data are unavailable: we heard that there has never been a national audit of biodiversity 225 . The Natural Capital and Ecosystem Assessment Programme may be the solution to these issues, but it is currently unclear when datasets will be available. 226

In its April 2023 report into Improving nationally significant infrastructure planning , the National Infrastructure Commission suggested that the Government should host a data sharing platform for environmental data to make the system more efficient. 227 The Government asserts that the new Environmental Outcome Reports assessment process will improve data collection and therefore reduce assessment burdens in the future. 228 The Planning Inspectorate is working with relevant bodies to agree appropriate data standards within the Nationally Significant Infrastructure process. 229

There will always be a requirement for some site-specific environmental information, but improved and accessible baseline data would reduce costs for developers, improve the quality of information available and, if provided by an independent body, reduce conflict in the planning system.

Alongside its work to digitise planning, the Government should consider the expansion of the Natural Capital and Ecosystem Assessment Programme. Any approach should prioritise the delivery of terrestrial information for areas of high housing and infrastructure demand over a blanket national approach. The Government should clarify when the proposed data sets will be available, develop a paid-for system for the private sector to utilise the data and confirm how often information will be updated. New technologies and innovations should be utilised to ensure data remains usable and useful in the long term.

The Planning Inspectorate’s work to introduce data standards for Nationally Significant Infrastructure Projects should be expanded to all projects of the scale which requires an Environmental Impact Assessment and should be suitably adapted for smaller housing developments. Ease of understanding

A non-technical summary must be published alongside an Environmental Impact Assessment. These contain a wealth of technical data and there is no standard way to present environmental information. When combined with its specialist nature this can be detrimental to the engagement process. Information published in an “unreadable format … just hundreds of pages that were illegible even when printed at A3 size” 230 is difficult to understand without expert support, to which most individuals do not have access.

To create consistency for developers and improve community engagement with the planning process, the Government should develop templates and exemplars for those assessments most regularly undertaken by developers. Brownfield land

The National Planning Policy Framework says that strategic plans should make “as much use as possible of previously developed or ‘brownfield’ land” unless this conflicts with other policies including causing harm to protected sites. 231 In July 2023, Homes England launched the Brownfield, Infrastructure and Land Fund to focus on regenerating brownfield land. 232 Biodiversity net gain

Liz Hart told the committee that the biodiversity net gain (BNG) requirement is “putting developers off brownfield sites”. 233 Remediation of a brownfield site, such as removing contaminated soil, can have a negative impact on biodiversity irrespective of any benefits from the removal of contaminants. If the same BNG metric applies to greenfield and brownfield sites, there is no incentive to fund remediation: a developer risks making a substantial financial outlay to remediate a site only to result in potentially significant negative BNG with further investment then being required on mitigation. We heard that the development of brownfield sites may depend on larger developers building on greenfield land to create a surplus of BNG credits. 234

The Minister for Natural Environment and Land Use agreed that where remediation involved removing contaminated soil that was beneficial to wildlife it would have a negative impact on BNG. However, she suggested many brownfield sites have low biodiversity value or will be below the de minimis threshold. 235 The Wildlife Trust disagreed, suggesting this is often “far from reality” 236 with brownfield sites commonly being successional habitats, home to a variety of rare species.

Brownfield development is a key government policy supported by the public and vital to delivering homes. The Government should ensure that remediating brownfield sites is not disincentivised by biodiversity net gain requirements. Local planning authorities should be able to moderate biodiversity net gain requirements for sites on their brownfield registers. Planning and permitting

When a project requires planning permission and environmental permits these processes are usually run separately: a housing development on brownfield land may receive planning permission for the proposal, but separately require a licence to handle contaminated material on site.

The Environment Agency provides a ‘parallel track’ for planning and permitting regimes for large or complicated proposals or those where a significant impact on a protected habitat or species is likely. 237 Parallel tracking is standard for Nationally Significant Infrastructure Projects, with permits, and development consent issued concurrently.

Where parallel tracking is not available, the Mineral Products Association criticised the lack of certainty provided by the Environment Agency on whether a site will obtain the necessary permits. “Environmental permitting is far too slow and often lags behind the planning process, effectively delaying or constraining implementation with serious adverse consequences for business.” 238 VertaseFLI Limited and Hart Environmental highlighted that this significantly affects the remediation of brownfield land: sites which are appropriate for redevelopment are “orphaned” because of the delays in permitting. 239

Overlaps between planning and permitting result in some developers facing lengthy waits for permits to address issues which have already been considered in the planning system. This is specifically in respect to the definition of waste and how this relates to soils and construction and demolition arisings.” 240 Box 9: Redevelopment site containing red shale A development site in the northeast included red shale, a naturally occurring bedrock. Following tests which found the rock to be chemically clean, the development proposed retaining the rock on site for reuse in the necessary earthworks. The reuse of the rock was included in the planning application and approved and included in the planning conditions. The development site is adjacent to an historic colliery and the presence of the red shale was believed to be natural bedrock which had been removed to access the coal seam. Therefore, the rock is classed as ‘extractive waste’ under the Mining Waste Directive and an environmental permit is required to reuse the red shale under an agreed Waste Management Plan—the plan is a replication of the Remediation Strategy and Earthworks Specification agreed through the planning process. Alternatively, the developer could excavate all the red shale from the site and dispose of it as waste, a costly approach. The developers applied for a permit in December 2022 and had not received it when we received evidence from Hart Environmental Ltd in June 2023. As a result, development earthworks were stalled. Source: Written evidence from Hart Environmental Ltd ( IER0034 )

Jennie Donovan, Deputy Director, Sustainable Business and Development at the Environment Agency, told us that planning and permitting are “quite distinct”. 241 The National Planning Policy Framework states: “The focus of planning policies and decisions should be on whether proposed development is an acceptable use of land, rather than the control of processes or emissions (where these are subject to separate pollution control regimes). Planning decisions should assume that these regimes will operate effectively. Equally, where a planning decision has been made on a particular development, the planning issues should not be revisited through the permitting regimes operated by pollution control authorities.” 242

The interaction between planning permission and permitting is causing delays on some sites, with a specific impact on the development of brownfield land. The Department for Levelling Up, Housing and Communities should work with the Department for Environment, Food and Rural Affairs to review planning and permitting requirements for brownfield land and eliminate overlap. This should include checks on how brownfield sites are assessed to ensure public sector resources are used most effectively.

The parallel approval approach for permits and planning applications used for Nationally Significant Infrastructure Projects should be expanded to all brownfield and housing developments significant enough to justify an Environmental Impact Assessment. Post-permission approvals

In July 2022, the Secretary of State for Environment, Food and Rural Affairs issued a written ministerial statement confirming his view that habitats regulations assessment provisions “apply to any consent, permission or other authorisation, this may include post-permission approvals; reserved matters or discharges of conditions.” 243

Competent authorities must now also consider a habitat regulations assessment when discharging any conditions on a planning application. This is the case even where the post-permission approval is not altering the impact of the proposal on protected areas.

This interpretation of the law could mean that, in some cases, a permission already given will be lost because tests that did not apply at the time that it was granted have been applied retrospectively. As the Ministerial statement made clear, this means that “… development that previously was lawfully screened out at the permission stage cannot now be screened out.” 244

This requirement is stalling developments across the country. 245 Developments which had planning permission in place before advice such as water neutrality was issued must now undertake additional assessments and source mitigation before they can commence development. The owners of these sites face all the challenges in availability and costs that we outline above regarding mitigation schemes, compounded by the fact that this will have not been factored into the initial viability assessments of the sites. 246 The retrospective application of these requirements creates uncertainty for developers and therefore impacts on market confidence and future investment. 247

The Government should ensure that existing planning consents, which cannot be commenced because of an inability to clear conditions owing to new advice under the habitats regulations, are automatically extended for a further three years.

The Government should remove the need for a habitats regulations assessment to be undertaken for post-permission approvals for at least three years and for longer where development has been substantially started within the appropriate timescales for the development. Clarity and Guidance

Interrelated legislation and guidance, developed in isolation, has made it difficult for developers to understand what they must deliver and when. 248

The Environment Agency and Natural England work with several organisations, including specific development industry groups, to communicate changes and strengthen the capability of the sector. 249 Nonetheless we heard that there is not a single source of information on issues owing to the number of bodies involved. This can be particularly difficult for smaller developers to navigate. 250 When guidance is located it is not written in plain English, which the Minister for Natural Environment and Land Use, described as “completely unacceptable.” 251

We heard condemnation of the lack of communication in advance of Natural England’s advice on nutrient and water neutrality, as well as the subsequent lack of and contradictory advice. 252 Natural England indicated that it worked on the advice for months but Defra and DLUHC took the decision that they “should not proactively signal that this advice was coming” because of concerns about legal risk and potentially causing a pre-emptive stalling in the granting of planning permissions. 253 This approach resulted in implementation “without warning and with significant consequences.” 254 Flaws in the guidance which could have been resolved in advance required several weeks to fix. 255

Witnesses were of mixed opinions about the process for introducing biodiversity net gain. We heard from a volume housebuilder that the timeframe for introduction was appropriate and that, because housebuilders were fully consulted, they had been able to plan. 256 However, with less than six months until the policy became mandatory for the majority of developments, and well after the introduction of the policy by many LPAs, we heard that there was insufficient clarity on several key policy details 257 including the relevant metrics 258 and the pricing and approach to statutory biodiversity credits. 259 Robbie Owen, Partner at Pinsent Masons, discussing the introduction of biodiversity net gain for housing and infrastructure development explained that “It is extremely difficult, when the policy tapestry is developing around you and behind you, to try to navigate through that.” 260

In a similar vein, despite a consultation on Environmental Outcome Reports (EORs), we were told that how the new system will operate, following the passing of the Levelling-up and Regeneration Bill, remains unclear. 261 The Delegated Powers and Regulatory Reform Committee, in its assessment of the Levelling-up and Regeneration Bill, concluded: “Parliament will have set no policy framework for assessing the environmental impact of proposals over as wider a range of activities as it is possible to imagine.” 262 It found that the department had provided inadequate justification for such skeleton legislation. 263 A lack of clear information on the nature and form of the proposed new EOR regime prevents us from commenting on whether this proposal will address any of the issues raised in this report. Whatever the potential effectiveness of this proposed new regime, the introduction of such fundamental changes creates uncertainty for developers and risks delays in delivery. 264

We were disappointed to learn of the Government’ s decision to not consult on nutrient and water neutrality guidance despite time being available. This choice was unnecessary and led to serious ramifications. It is indicative of a wider issue: communication on new or evolving environmental regulations is often not provided in a timely way, lacks detail and practical solutions, or is difficult to understand. This inhibits the ability of developers and local planning authorities to respond appropriately, so delaying development.

Those who deliver policy through the planning system should be consulted on the content and drafting of relevant advice. Defra and DLUHC should work with Natural England and the Environment Agency to develop a suitable consultation method which can be used ahead of issuing advice under the Habitats Regulations. Where necessary this should allow for confidential discussions.