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‘Neutrality’ requirements – Natural England’s new approach to environmental protection


Climate change has  moved up the political agenda with many local planning authorities adopting policies on “climate emergency”.  Policies have also come centrally from the Government’s adviser on the environment, Natural England (NE).  NE is a statutory consultee to local planning authorities on some planning applications and its role is to help conserve, enhance and manage the natural environment, thereby contributing to sustainable development. It is also the adviser to the Competent Authority under the Habitat Regulations.

In terms of development, the issue of “neutrality” is now key.  NE has provided advice to some local authorities on how to address the impacts of development which has the potential to increase nutrient pollution or adversely affect the integrity of habitats protected sites through increased water extraction.

The key tenet of neutrality requirements is that planning permission must not be granted unless it can be shown that the new development does not:

  • add any more nutrients to the relevant river catchment area (nutrient neutrality); or
  • lead to any more water extraction from the relevant water supply zone (water neutrality).

The practical result of this in some cases is stymieing or preventing development. The Home Builders Federation (HBF) recently calculated that 60,000 homes have been delayed across 32 local authority areas as a result  of nutrient neutrality.

We have advised developer clients on both nutrient neutrality and water neutrality issues in recent months, for example on development in Horsham and Gosport.  Recent extensions to nutrient neutrality requirements and introduction of water neutrality in certain areas show how quickly development can be affected.  As such, we consider that it is important for developers to understand how neutrality issues affect development and the options open to them to unlock the issue.

Nutrient Neutrality

NE guidance on nutrient neutrality was introduced in June 2019 in response to concerns about the effects of nutrient pollution from domestic sewage and agriculture on marine sites in the Solent that are protected under the Habitats Regulations 2017 (as amended).  It provides that all  new development that creates overnight visits (i.e. all residential development) cannot lead to any additional nutrients entering the relevant river system.

On 16 March 2022 NE issued new guidance that extended the nutrient neutrality requirement to 42 further local authorities.  This requirement now applies to 74 local authorities in England.

Water Neutrality

Water neutrality guidance was introduced in September 2021 due to concerns about the effect of water extraction on internationally designated sites of nature conservation in the Arun Valley which are protected under the Habitats Regulations 2017 (as amended).  This guidance affects five local authorities and provides that planning permission for development in the affected areas cannot be granted unless it can be shown that the new development will not create any more water demand in the Sussex North Water Resource Zone.

Given that much of southern England is under water stress, the possibility that this guidance will be extended cannot be discounted, albeit DEFRA has recently stated that NE is not planning any further water neutrality notices. The issue of neutrality is not just limited to the South East  -following a letter from NE in March this year Carlisle City Council stated that “[the Council] cannot lawfully conclude that relevant development within the identified catchments of these Special Areas of Conservation will not have an adverse effect. Therefore, until these matters are resolved the Council will not be able to grant planning permission for current schemes under consideration or for new proposals within the affected catchments”.  A number of planning application are now on hold until a solution is found.

Unlocking the Issue

The above-mentioned neutrality requirements have taken effect from the date that the guidance has been published.  Therefore, even if a proposed development has a resolution to grant planning permission, if neutrality guidance is published it cannot progress unless it can be shown to be nutrient or water neutral (as applicable).

Neutrality can be achieved through a combination of reduction and offsetting measures.  How to resolve the issue much depends on the availability of offsetting options in the area.

Some areas have strategic offsetting schemes, such as the one run by the Hampshire and Isle of Wight Wildlife Trust which has been purchasing farms and ceasing the agricultural use – thus reducing the amount of nutrients entering the Solent.  Developers are able to buy credits to offset the nutrients produced by the new development.  Similar schemes are being explored by local authorities elsewhere.

As water neutrality is a newer issue, no strategic offsetting schemes have been created yet.  Until one comes forward, developers will be required to create their own offsetting schemes to show local authorities that water usage in the water catchment area has been reduced by the relevant amount, likely through retrofitting existing properties to allow water offsetting.

Neutrality requirements will either be secured through planning condition or as section 106 obligations.  The best approach will depend on the specific combination of reduction and offsetting measures for each development, although local authorities may have a preferred approach and, in our experience, early dialogue with the local authority is important to agree a way forward.  Given the relatively new nature of neutrality requirements, we have found that it is key that flexibility is built into any neutrality scheme.  This will allow alternative schemes to be provided if necessary, or credits to be traded if the development does not come forward or the guidance changes.

Although neutrality requirements add cost (estimated by HBF to be £5,000 per home to meet nutrient neutrality requirements ), delay and uncertainty to new development, NE clearly view them as a useful tool in protecting the environment.  It is therefore likely that we will see their use increase across England.  As such, it is important to understand whether the requirements affect a proposed development, that there is early engagement with local authorities and careful consideration is given to how the neutrality proposals will work in practice.

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