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Maintaining a Neutral Position: Nutrient Neutrality in the Courts and the Environment Agency in the press

On Friday 30 June, the High Court ruled on C G Fry & Son Ltd v Secretary of State for Levelling Up Housing and Communities & Anor [2023] EWHC 1622 (Admin).  The judgment is a vital one for any councils or developers who are currently affected by nutrient neutrality issues.

The case considers whether nutrient neutrality requirements can be imposed on an reserved matters or condition discharge application even though the original permission pre-dates the Natural England guidance.

Unfortunately for developers, the High Court not only found that they can, but also that they might apply to an even wider range of circumstances than previously thought.

I strongly recommend reading the decision in full. The key points, however, can be summarised as follows:

  • While on a strict reading of the Habitats Regulations 2017 the need for an appropriate assessment does not cover the discharge of conditions, they do apply as a result of article 6(3) of the Habitats Directive; a purposive interpretation of the provisions of the regulations and domestic case law within England (para 48 of the decision);
  • The Habitats Directive and Habitats Regulations 2017 mandate that an appropriate assessment be undertaken before a project is consented. That applies irrespective of the stage the process has reached according to UK planning law  (para 64). 
  • If an appropriate assessment is required, then it can be carried out at any stage at which a decision is made - be that grant of planning permission, reserved matters or condition discharge.  
  • If an assessment is carried out at condition discharge stage, then it is not limited to matters related to the condition in question. The assessment still relates to the project as a whole (para 69). 

In short, at present, it does not matter if the original permission you are looking at was granted before the nutrient neutrality guidance took effect -  if there are any approvals left in the planning process, then the scheme can still be effected. In short, the decision could significantly increase the number of developments affected by nutrient neutrality issues in England. 

Whilst I have no inside knowledge about this case at all, given its wide ranging potential impact, I would not be at all surprised if it was appealed. In fact, the court has already granted the claimant permission to do so*. In the meantime, however, it looks as if the only way forward for affected developments is to seek credits from an approved nutrient off-setting or mitigation scheme. 

Environment Agency in the Press

As misery loves company, it is not only the effects of nutrient neutrality that looks like it might be expanding.  Last week the BBC reported that the Environment Agency has objected to five residential planning applications in Cambridgeshire.  

The Environment Agency is reported as stating that "water is a "precious resource that is under pressure across the country" and that taking more from natural stores is "posing a real risk to chalk streams, river, and wetland habitats".

It added: "We have objected to some proposed development applications in the Greater Cambridge area on the basis that the water supply for these developments will pose a significant risk to our local water environment."

The objection has lead to speculation that Natural England may be about to expand it's Water Neutrality guidance, which currently only applies to the Sussex North Water Supply Zone, which serves parts of Crawley, Horsham, Arun and Chichester.  

Developments affected by water neutrality issues need to be able to demonstrate that that the total water use in the relevant water supply area after the development has been completed will be equal to or less than the total water-use in the region before the new development.  

This is usually achieved through a combination of water efficiency measures incorporated into the development itself and off-setting measures on external sites - although finding those external sites can sometimes be much easier said than done. 

The need for a strategic solution

The one thing that both 'neutrality' requirements have in common: development is not the primary source of the problem.  

As the Court acknowledged in Fry, the nutrient neutrality "issue relates to the phosphate loading of protected water habitats, leading to eutrophication. This is caused by reasons including agricultural practices and under - investment in water infrastructure."  

The need for water neutrality has also arisen, in part, as a result of under-investment in our water infrastructure. The requirement was imposed in Sussex as a result of concerns that groundwater abstraction within the affected area may be harming biodiversity within internationally designated sites.

Both issues require a long-term strategic solution. For nutrient neutrality, there is some hope that one may be on it's way. The Levelling-Up & Regeneration Bill (which is shortly to enter Report Stage in the House of Lords) places an obligation on water companies to upgrade their water treatment plants to tackle the issue at source.  However, even once the bill is passed into law, this requirement is not expected to come into effect until 2030. 

Short term options

In the meantime, however, it looks as if the industry will need to continue to rely on nutrient or water off-setting schemes. 

Whilst these are currently in short supply, there is a growing market in the provision of these types of ecological mitigation schemes and a clear government commitment to establishing more of them.  

These schemes not only allow development to come forward, but are also proving to be an attractive form of income diversification for a range of rural business - as the firm recently explored in its Future of Estates report. 

Whilst it is clearly not an ideal solution, these types ecological mitigation schemes do provide a pragmatic way forward for those developers lucky enough to be able to access them. 

It is just a shame that we will have to resort to sticking plaster solutions for the foreseeable future.

* according to Charles Banner KC's LinkedIn post, that can be accessed here

The upshot is that the Habitats Directive and Habitats Regulations 2017 mandate that an appropriate assessment be undertaken before a project is consented. That is irrespective of whatever stage the process has reached according to UK planning law. The basal fact in this case is that neither at the permission, reserved matters, or conditions discharge stage has there has been an appropriate assessment. Application of the Habitats Directive and a purposive approach to the interpretation of the Habitats Regulations 2017 require the application of the assessment provisions to the discharge of conditions. The strict precautionary approach required would be undermined if they were limited to the initial - the permission - stage of a multi-stage process.”