Nutrient Neutrality – One year on

As the Norfolk Authorities put an immediate stop to issuing planning consents, we quickly had to understand Nutrient Neutrality (NN) and its implications.  In our blog of 21^st March 2022, we considered the possible implications of the guidance.  A year on, we reflect on how some of the key issues identified have played out.

Understanding the Issue

“Will the skillset and resource be available locally to enable the decision maker to be confident that there is no reasonable scientific doubt that the development will not give rise to adverse effects?”

The Norfolk Planning Authorities quickly recognised that NN would require specialist advice and appointed Royal Haskoning DHV to assist in the preparation of a bespoke calculator for Norfolk, and to explore and identify possible mitigation solutions.  In October, the Norfolk Calculator was published, allowing a more refined calculation of the nutrient budget for a project to be calculated, effectively reducing mitigation requirements by around one third.  Whilst the Authorities’ speed in bringing in outside expertise is to be commended, a year later strategic mitigation options that would release significant numbers of homes are yet to be identified.

The impacts have also had implications for resourcing within Natural England, who we understand have been inundated with requests through their Discretionary Advice Service and have consequently had to be selective in their advice, prioritising strategic sites. To add to resource pressures, whilst the Local Authorities are the Competent Authorities, they have, understandably, relied heavily on advice from Natural England to inform their decision making.

Determination of Planning Applications

“We hope that all parties affected by the changes introduced by Natural England will be able to quickly adapt, enabling planning applications to be determined and development to progress without significant delay.”

We saw an immediate halt to the issuing of planning permissions across much of Norfolk, whilst the Authorities took time to consider the impacts of Natural England’s advice.  Applications that were on the agenda for March Planning Committees found themselves pulled and remain undetermined a year later.  Whilst we have seen a very small number of consents issued, the vast majority of affected schemes remain held up whilst mitigation solutions are found. Schemes able to deliver mitigation on-site have so far been few and far between.

A key area of debate was whether Reserved Matters (RM) and Discharge of Conditions (DOC) applications were caught by the requirements with strong arguments being put forward on both sides.  This is a particularly important issue as it is estimated that of the 100,000+ homes across England held up by NN, around 40% already have planning permission (outline or full) and are simply waiting on either approval of RM or DOC.  The Norfolk Authorities quickly sought Counsel’s advice, which confirmed their original stance that such consents would be subject to NN considerations.  Whilst the Councils have stood firm on this position, we await with interest the outcome of the High Court hearing in respect of Somerset West and Taunton Council’s refusal to discharge conditions at Jurston Farm. 

It is worth noting that some of the Norfolk Councils have adopted a pragmatic approach in respect of discharge of conditions, only refusing to approve those relating to drainage where they deem that the impacts had not already been considered through the application.

On many schemes that are delayed, applicants have sought to ensure that all other planning matters have been addressed, meaning that an application can be determined as soon as mitigation credits become available, but this has often proved difficult in many cases as consultees are aware that even if comments are provided promptly, the application cannot be determined, removing any impetus for quick responses.

Impacts on Plan Making

“Plan making will also be affected by the change.  It will be particularly interesting to understand the implications for the Greater Norwich Local Plan.”

A year ago, the main Greater Norwich Local Plan Hearing Sessions had just concluded, and whilst NN has not been the only matter to delay progress of the Plan, it has had significant implications.  The Councils’ proposed approach is to amend Policy 2 of the GNLP, to include a requirement for relevant developments to demonstrate no adverse impact on the integrity of affected Habitats Sites (i.e. that they are Nutrient Neutral).  Further Hearing Sessions are programmed for next week, with the Inspectors’ Matters, Issues and Questions including questions such as, “Is the application of Policy 2 likely to affect the viability and deliverability of residential development in the plan area?” and,  “Is the nutrient mitigation strategy likely to be successful in facilitating delivery of the plan?” 

The Partnership are of the view that, despite estimated mitigation costs of approximately £5,000 - £7,000 per dwelling, NN will not affect the viability of residential development in the plan area, other than for one notional typology.  However, in acknowledgment of the fact that a number of other typologies become only ‘marginally’ viable, the Partnership also propose to modify the Plan to allow for site-specific viability assessments to be submitted on all sites, rather than just brownfield sites as originally drafted – a revision Bidwells and others have been lobbying for from the outset.  It will be interesting to see how these matters play out at next week’s Hearing Sessions.

In terms of implications for the GNLP Housing Trajectory, the Partnership state that 23,948 homes in their supply are impacted by NN requirements – almost two-thirds.  They consider that an 18-month delay is reasonable to allow for mitigation schemes to come into effect and to account for delay in decision making resulting from the requirements to consider NN. 

Elsewhere, North Norfolk saw delays to the submission of its Local Plan while consideration was given to the implications of Nutrient Neutrality; originally programmed for summer 2022, NNDC have only this month resolved to submit their Plan to the Secretary of State.

Impacts on Housing Delivery

“It seems inevitable that there will be a delay in delivery of housing in the parts of Norfolk affected by Natural England's expanded list.”

The implications for 5-year Housing Land Supply quickly became apparent, and Broadland and South Norfolk soon adopted a precautionary approach that they were unable to demonstrate the necessary supply. This saw approvals of a number of schemes outside the affected catchment area, where the lack of a 5-year land supply whilst probably not determinative, certainly lent additional weight in favour of the development proposals.  Elsewhere in Norfolk, where smaller parts of the Districts fall within the affected catchments, the impacts have been less significant, with Breckland, King’s Lynn & West Norfolk and Great Yarmouth continuing to report a healthy land supply.  North Norfolk’s supply position is marginal and has dipped below 5 years, although this is not just a result of NN delays.

Looking ahead, it is clear that delivery will continue to be affected for some time to come, primarily because whilst we are promised that mitigation credits will be available in the summer, it is likely to take some time for the mitigation schemes to be in place and operational, preventing occupation and impacting delivery rates.

Mitigation

“Surely it would have been better to have a period of time to allow Councils, developers and consultants to… critically, allow a co-ordinated programme of mitigation to be identified.”

The ‘million-dollar question’ from the outset has been what mitigation might entail.  Learning from experience in other parts of the country, it quickly became apparent that most sites would not be able to deliver on-site solutions either due to their size, or their location and hydrological connections to the affected Habitats Sites.  A key part of Royal Haskoning DHV’s commission has been to consider a range of solutions.  Whilst we still await the outcome, a number of significant steps have been taken. 

• Work with Anglian Water to establish a Joint Delivery Vehicle to broker delivery of a variety of mitigation options is ongoing, with reports being considered by the relevant Councils between January and March 2023. The Joint Venture company is intended to secure mitigation and then issue certificates confirming the credits that had been purchased.
• Norwich City Council have identified a programme of retro-fitting of their housing stock over the next 5 years, which would generate enough headroom to release in the region of 1,400 new homes. This headroom has been earmarked for City Centre schemes, including Anglia Square.
• Natural England announced their own project to identify strategic mitigation schemes, although it is understood that they will only provide schemes and nutrient neutrality credits on nature-based solutions such as wetlands and woodlands and that these will not provide sufficient capacity to meet all the need in Greater Norwich.

It has been positive to see multi-agency working in the preparation of the potential mitigation solutions, in particular the involvement of Anglian Water in the Norfolk Authorities’ work.

We hope to see the approach to retro-fitting adopted by NCC replicated by Housing Associations and Registered Providers with housing stock, as it has the potential to generate additional headroom and mitigation credits relatively quickly.

Why should the Development Industry pay?

As we all got to grips with the finer detail of NN, there was a lot of discussion about the development industry’s role in nutrient pollution when compared to other contributors such as agriculture.  Questions were raised about why the development industry was being made to pay, rather than other agencies, such as Anglian Water

In a Written Ministerial Statement of July 2022, the Secretary of State for Environment, Food and Rural Affairs set out an intention to require the water and sewerage companies to upgrade wastewater treatment works to the highest technically achievable limits by 2030 in areas affected by NN.  The hope is that this will significantly reduce the level of mitigation required by individual developers in future, a move very much welcomed by the development industry.  Indeed, it begs the question as to whether landowners and developers may consider delaying delivery, so that the burden of mitigation is carried by the sewerage companies.  However, it remains to be seen whether these provisions survive the final stages of the Levelling up and Regeneration Bill’s progress through the House of Lords.

Conclusion

This time last year, I don’t think many of us would have believed it possible that over the course of 12 months, only a handful of schemes for overnight accommodation would be granted planning permission in large parts of Norfolk.  Given the scale of the issue, credit has to go to the speed with which the Norfolk Authorities have worked together to find a solution. Whilst there is much to be positive about, the fact remains that planning permission for thousands of new homes remains held up in the Planning System, and although mitigation solutions are on the horizon, it will still be some time before these schemes are operational.  With the whisper of ‘Water Neutrality’ also looming, it remains an uncertain time for all of us in the development industry.