For more than two years, Natural England has been advising against new development in certain parts of the country where this involves creating overnight stays, including new housing development, any new overnight accommodation such as hotel and student accommodation, and major tourist facilities, unless developers can demonstrate that their schemes are nutrient-neutral.
What is nutrient neutrality?
Both nitrates and phosphates occur naturally within the environment and, at normal levels, are essential nutrients for plants. However, levels have been increasing over the past century with modern agricultural practices being by far the largest source. In addition, waste water from homes and other development is an increasing source of these nutrients which find their way to rivers and the coast largely because waste-water treatment plants do not remove these nutrients, or only remove a portion of them.
When these nutrients reach excessively high levels in rivers or at the coast, this causes phytoplankton to grow and reproduce more rapidly, resulting in algal blooms which disrupt normal ecosystem functioning. This process is known as eutrophication and it causes a range of problems including using up all the oxygen in the water leaving none for other marine life, such as the invertebrates on which the protected coastal bird populations depend.
Generally, nitrates tend to have a greater impact on saltwater environments at the coast, whereas phosphates impact freshwater environments more, including rivers, lakes and reservoirs.
The issue of proving nutrient neutrality initially affected the Solent area of Hampshire and West Sussex, where excessive nitrates from development were having an impact on European-protected coastal sites known for their wading bird populations. Subsequently, the issue has also arisen in other parts of the country including Kent, Somerset, Herefordshire, Cornwall and Wales. In each case, either nitrate or phosphate pollution from new development has affected protected coastal or riverine sites.
Natural England's stance means that planning permissions for some 30,000 homes in Wales and across the south of England have been significantly delayed. Furthermore, the cost of securing planning permission in the affected areas is rising steeply, and navigating the planning system is now even more complicated for applicants.
Legal and policy context
Initially, Natural England's new guidance resulted in a period of severe planning paralysis. Most of the dozen local authorities around the Solent stopped issuing planning permissions while they interpreted the guidance and issued their own advice to applicants.
In early 2020, development of more than 7,200 dwellings across the Solent was held up mainly or solely because of the nitrates issue, according to the Partnership for South Hampshire. But not all affected local authorities stopped work on planning applications: Southampton City Council and Eastleigh Borough Council for instance were less risk-averse and continued to permit development.
In June 2020, Natural England revised its Solent nitrates guidance following feedback from various stakeholders. This version – still in force at the time of writing – helpfully included a standardised nitrate budget tool that calculates the impact of each development. This guidance was also tested by the High Court in two linked cases in May 2021 involving a development in Fareham.
Mitigating development delays
When it comes to the protection of European sites of nature interest, the relevant legislation is in Articles 6(2) and 6(3) of the EU Habitats Directive (92/43/EEC) which was implemented in the UK by the Conservation of Habitats and Species Regulations 2017 (SI 2017/1012).
The role of waste water from development exacerbating eutrophication in protected EU sites has been acknowledged for many years. However, it was only following the implementation of the 2017 regulations and a subsequent inspection of the existing condition of the Solent marine protected sites that Natural England became sufficiently concerned to publish initial guidance in 2018. This called for larger-scale development – of more than 300 homes – across the Solent area to be 'nitrogen neutral' to avoid worsening the existing problem.
Also in 2018, the European Court of Justice made the 'Dutch N ruling'. This held that mitigation measures that were required to avoid harm to protected sites had to be certain in their benefits and needed to apply directly to the protected site affected, rather than provide any wider environmental benefit elsewhere.
As a result, Natural England revised its guidance for Solent local planning authorities in 2019, using the 'precautionary principle', to say that all new development involving overnight stays should now be nitrate neutral.
Initially the new guidance resulted in a period of severe planning paralysis particularly in the Solent. But during 2020, the nutrient pollution problem spread further afield, including to Kent where the impact of both nitrates and phosphates on the Stodmarsh Nature Reserve led to advice against new residential development affecting large areas of central and eastern Kent.
In Somerset and northern Dorset the impact of development in exacerbating the levels of phosphates on the protected Somerset Levels and Moors was recognised and led to residential development being put on hold across parts of six local planning authorities.
There are also smaller areas impacted by nutrient pollution in Herefordshire and in Cornwall. In Wales, where the entire Principality was declared a nitrates vulnerable zone (NVZ) in April 2021, some residential development has been delayed by the need to mitigate for the additional nitrates impact of the new homes. However, as the NVZ was only introduced recently, the full impacts on development are not yet known.
The first problem faced by planning applicants in affected areas is how to calculate the level of nutrients that the development will cause. For nitrates this is relatively straightforward, assuming the proposed development fits the parameters of the Natural England calculator tool. But many do not. For those proposing small flats or care homes, a bespoke approach will be required for household occupancy.
There is also the issue of how much nitrates each waste water treatment works is allowing in its discharges. For larger works near the coast there is an Environment Agency-imposed permit, but that does not apply to many smaller inland works. Here, a high default rate of nitrate discharge is required by the calculator tool.
However, that rate is not always justified by the reality of the project and therefore some applicants need to get hold of monitoring data to argue a case for a more realistic level of nitrates discharge. All this means that many applicants are forced to use specialist consultants to prepare their report that needs to be submitted alongside the planning application.
For phosphate-impacted areas there is no Natural England prescribed calculator tool yet though local authorities in Somerset developed their own.
How to achieve nutrient neutrality
Calculating the level of nitrates or phosphates is all well and good, but the key problem is how to mitigate their impact and achieve nutrient neutrality. A wide range of approaches can be taken, but the development site itself is often the best place to start. In many cases, for instance, a well-designed wetland area can act as a nitrates sink and thus reduce the surface water run-off.
In some cases, nitrates or phosphates will be discharged to a mains sewer in waste water and will not be removed at a treatment works; this means that land use in the same river catchment area as the relevant water treatment works will need to change to ensure there is no net impact. Agricultural land could be converted to other uses with lower nutrient input for instance by way of offset. However, the effectiveness of this approach will depend on the nature of agricultural production: pig and poultry farming offers the largest net reduction in nitrates, and lowland livestock grazing the smallest.
The problem for developers is that many sites do not have sufficient agricultural land to offset their nutrient impacts. In fact, in the case of brownfield sites, there is none. The difficulty of resolving this issue has prompted local authorities to delay the issue of planning permissions.
Far larger areas of agricultural land are required to mitigate phosphate pollution than are needed for nitrates. This is a serious problem, not only in terms of the potential costs of mitigation to developers, but also for the wider rural environment and economy. If large areas of productive land need to be permanently taken out of use, we should expect consequences in terms of landscape changes, food production and agricultural job losses.
Third-party mitigation
In the Solent area, the difficulty of nitrate mitigation is being dealt with principally through third-party schemes operated by local authorities and by private enterprise alike. They usually involve conversion of agricultural land to another, lower- or zero-nitrate use, such as woodland or wildflower meadows, in perpetuity. The reduction in nitrates input is then banked as credits that can be purchased to offset the impact of proposed development in the same river catchment area, as set out in Natural England's guidance.
Such schemes can make a significant difference by enabling mitigation for developments that do not have the option of on-site measures. In some areas of the Solent, this is now beginning to unblock the pipeline of residential development.
Third-party schemes can also provide valuable supplementary benefits, including opportunities for biodiversity net gain or suitable and accessible natural greenspace to offset the disturbance caused by developments to recreational opportunities near protected coastal sites.
Notwithstanding their benefits, third-party mitigation sites in the Solent have not always been available in the right place at the right time. Furthermore, the costs to developers of securing sufficient credits can vary from as little as £1,000 to more than £13,000 per dwelling.
This variation depends on a range of factors including the commercial view of the scheme operator – who can be private companies or not-for-profits – the cost of the agricultural land, and the extent to which waste-water treatment plants in the area remove nitrates at source under current permits. The effect has been to create a postcode lottery, with reasonably priced credits available in some areas but a scarcity and higher prices in other parts of the Solent, such as the Test and Itchen river valleys.
These cost and availability issues should ease as more mitigation schemes become operational. Landowners are being encouraged to come forward to offer their land for new schemes. However, planning applicants must pay for and secure full mitigation, in some cases before starting the development or before dwellings are occupied depending on the local authority.
For now, delays and cash-flow problems for some Solent development schemes look set to continue. In other areas such as Kent and Somerset, which started dealing with the issue a year or so later than the Solent, the situation is worse because of the timing as well as the greater area of agricultural land that phosphate mitigation requires.
Potential for progress
The situation remains difficult across most affected areas, and in the Solent is only just beginning to ease. However, the UK government is developing an online nutrients trading platform that will be piloted in the Solent area next spring.
This will make it easier for willing landowners to come forward with mitigation sites and to access a marketplace where developers can bid for the credits they are likely to need. If it is successful, the platform will be rolled out to other affected areas in England and Wales, although that could take some time.
The other cause for optimism is the Environment Agency's work in reviewing and revising permit levels for many of the sewage treatment works in the Solent area. If thresholds at which water utility companies must remove nitrates at source become more stringent, there will be direct and significant reductions in the level of on-site and other mitigation required.
Some mitigation will still be needed, but it will help make current on-site measures more effective and nutrients credits cheaper for developers. Again, this may not have a material effect for a few years, but in combination with the online trading platform it may mean there is light at the end of the tunnel.
Peter Home is associate partner, Paris Smith LLP
Contact Peter: Email
Related competencies include: Agriculture, Environmental management, Legal/regulatory compliance, Management of the natural environment and landscape, Planning and development management
RICS' next steps on nutrient neutrality
RICS recently convened a round table of senior officials from relevant stakeholders including the Home Builders Federation, National Farmers Union, Royal Town Planning Institute, utility companies, Natural Resources Wales, the Welsh government and some local authorities to discuss nutrient neutrality, and its impact on the planning system in some areas of England and Wales.
RICS intends to write a joint letter to Department for Levelling Up Housing and Communities and the Department for Environment, Food & Rural Affairs shortly, working with other stakeholders from the round table. This letter is likely to highlight the lack of consistency in data modelling and assessment of environmental impacts on waterways, the issue of funding to improve waste-water treatment works, and the delays to developments.
Legal background
In both Wyatt v Fareham Borough Council and Natural England [2021] EWHC 1434 (Admin) and Save Warsash v Fareham Borough Council and Natural England [2021] EWHC 1435 (Admin), Mr Justice Jay found that the guidance could be relied on and was suitable for its purpose. However, he did question the calculator's use of an assumed household size of 2.4 persons. Natural England defended this as necessary for simplicity, and highlighted that local planning authorities could allow evidence of other household occupancy sizes if they wished.
But nutrient pollution did not only affect the Solent. The impact of both nitrates and phosphates on the Stodmarsh National Nature Reserve led to advice from Natural England against new residential development, which affected large areas of central and eastern Kent. Meanwhile, the impact of development in exacerbating phosphate concentrations on the protected Somerset Levels and Moors was recognised, and led to housing schemes being put on hold across six local planning authority areas.
Smaller areas in Herefordshire and in Cornwall have also been affected by nutrient pollution. The entirety of Wales was declared a nitrate-vulnerable zone (NVZ) in April 2021, and some residential development has been delayed by the need for mitigation. However, as the NVZ was only introduced recently, the full consequences for development are not yet known.