Attaining Nutrient Neutrality in Residential Development Sites – Key Elements to Consider

Following the recent rejection of the Government’s proposed amendments to the nutrient neutrality regulations by the House of Lords, developers may now be questioning whether their sites will continue to be adversely impacted by these regulations. The term ‘nutrient neutrality’ refers to minimising the levels of nitrogen and phosphates in protected freshwater habitats, following human activity such as agricultural practices, issues with water infrastructure and new development sites. Surges in nitrogen and phosphate levels can lead to eutrophication, which disrupts local ecosystems extensively. As such, relevant authorities have sought to limit damage to protected habitats by only providing consent to developments once appropriate assessment has been conducted.

The decision in the recent case, C G Fry & Son Limited vs (1) Secretary of State for Levelling Up Housing and Communities and (2) Somerset Council [2023] EWCH 1622 has placed emphasis on the importance of nutrient neutrality, in obtaining consents for development sites. The case examined the scope and application of the Habitats Regulations 2017 and revealed that an appropriate assessment under these regulations must be undertaken before a project is consented to, irrespective of which stage the planning consent process has reached.

Case Details

Timeline

• Dec 2015 – Somerset Council (“The Council”) granted an outline planning permission for a mixed-use development of up to 650 houses, community and commercial uses, a primary school and associated infrastructure. The development was to be built in 8 phases. The planning permission was subject to several planning conditions; two key conditions were a condition requiring the submission of a site-wide surface water drainage strategy and a condition requiring the submission of a foul water drainage scheme.
• Jun 2020 – C G Fry & Son Limited (“The Claimant”) obtained reserved matters approval for phase 3, relating to 190 dwellings, subject to several conditions being attained. Phase 1 and Phase 2 of the development had already commenced, under separate reserved matters approval.
• Aug 2020 – An advice note was released by Natural England advising Councils to exercise greater scrutiny for projects and plans which run the risk of increasing nutrient loads, which would impact Special Protection Areas, Special Areas of Conservation and Ramsar Sites. The Claimant’s development site was near a Ramsar Site in Somerset.

In this note, Natural England had concluded that the conditions at Somerset Levels and Moors Ramsar Site were already considered “unfavourable” and so, at risk from the effects of excessive phosphates and nitrates. They specifically noted that although mitigation measures could be undertaken, these would not be sufficient to reduce phosphate levels enough to restore the condition of the Ramsar Site, and so any further residential development near the site had to be limited. Natural England therefore advised planning authorities to undertake appropriate assessments under the Habitats Regulations 2017 of any planning applications for new developments.

• Jun 2021 – The Council withheld approval because appropriate assessment under the Habitats Regulations 2017 was required before conditions could be discharged.
• April 2022 – The Claimant made an appeal to the Secretary of State and an Inspector was appointed.
• July 2022 – The Council submitted a shadow appropriate assessment which stated that the proposed development would have a negative effect on the qualifying features of the Ramsar site, especially due to the increased levels of phosphorous generated by the development. There was no mitigation for this made by the Claimant so it could not be concluded that the project wouldn’t adversely affect the Ramsar site.

The Claimant appealed to the Inspector on the basis that no appropriate assessment, under the Habitats Regulations, was required at the discharge of conditions stage. The appointed Inspector dismissed the Claimant’s appeal, on the basis that:

1. Although the Habitats Regulations 2017 did not specifically cover Ramsar Sites, the National Planning Policy Framework (“NPPF”) designated the same level of protection to Ramsar Sites, as to other sites listed in the Habitats Regulations.
2. The Inspector determined that the discharge of conditions were the “authorising act” for the development and stated that the grant of planning permission and reserved matters approval did not impact the scope of any appropriate assessment of the site. The Inspector further stated that the requirement for an appropriate assessment applied to the discharge of conditions stage.
3. The Claimant had tried to argue that the grant of the outline planning permission referred to in regulation 70 was the “consent, permission or other authorisation” referred to in regulation 63 of the Habitats Regulations. The Inspector held that if this was the correct interpretation, it would lead to “loopholes” which are counter-intuitive to the purpose of the Habitats Regulations.

This dispute was then escalated to the Planning Court, with the Claimant’s case being that additional phosphate loading, caused by the Claimant’s development, was not a substantial consideration in determining whether the key conditions could be discharged and that the main issue was whether an appropriate assessment was required.

Key Elements from the Judgement

The Claimant’s grounds were dismissed for the following reasons:

1. Appropriate assessment under the Habitats Regulations 2017 is required before a project can be consented to, and that an outline planning permission being granted did not negate the need for an appropriate assessment. The judgement highlighted that the planning approval of a development is a “multi-stage process”, applying a purposive approach to interpreting the Habitats Regulations. It was concluded that authorising a development to proceed as planned without ensuring appropriate assessment had been conducted, simply because an outline planning permission was granted, would undermine the “strict precautionary approach required”, expressing that the outline planning permission was in fact an “initial stage”.
2. When assessing whether conditions can be discharged, policy considerations can have an impact on whether some matters impact the development. The Claimant had tried to argue that the Inspector could not apply the NPPF to this site as “phosphate generation was outside the scope of the considerations capable of being relevant to the discharge of the conditions [outlined for the development] …”, and furthermore, attempted to argue that policy (by reference to the NPPF protecting Listed Ramsar Sites in paragraph 181(b)) could not change a legal position. This argument was rejected on the grounds that, when discharging conditions, “…it is necessary to consider the legal consequences” of authorising a development and that a development having a potential impact on a Ramsar site, as protected by a national policy (the NPPF), is a legal consequence.
3. Finally, when assessing whether conditions can be discharged, the scope for appropriate assessment cannot be narrowed to the scope of the conditions, regardless of whether any other conditions have already been discharged and whether planning permission has been granted. For instance, if the various specific conditions on one or more phases of a development site have been discharged, the scope of the planning authority’s assessment would not be limited to the remaining conditions and remaining phases but rather to the whole development scheme.

The Impact on Developers

This judgement signals further delays, and increased incurred costs, for developers and their schemes. A report by the Home Builders Federation released earlier this year stated that “an estimated 150,000 homes have been delayed or cancelled by the nutrients issue…” despite an estimated 40% having already secured planning permission.

Whilst the Secretary of State for Environment Food and Rural Affairs, in a statement released in July 2022, has stated that new housing developments only had a small impact on overall nutrient pollution, it is quite clear that government policy is focused on tackling nutrient neutrality by 2030. In addressing whether appropriate assessment was required and at which stage, the Statement explicitly stated that “The Habitats Regulations Assessment provisions apply to any consent, permission or other authorisation, this may include post-permission approvals, reserved matters or discharges of conditions.”

This case indicates to developers that, when planning development schemes, there should be a special focus in mitigating any impact on the local environment, especially if building in a protected area.

Contact our Residential Development solicitors today

For more information or to discuss your requirements, please contact the team on 0330 175 7609, or email us at residentialdevelopment@ibblaw.co.uk.