Strategic Development Strategies and the Nature Restoration Fund

There are a couple of things in the Planning and Infrastructure Bill that I thought I’d provide some brief comments upon, as these are things I’ve been involved with closely for the HBF in recent years.

Strategic Development Strategies:

A revival of strategic planning in England. Hobbled since 2011, patchily pursued elsewhere outside Greater London but only on a voluntary basis. The Government wants this to be undertaken by all the new strategic authorities, whether mayoral or non-mayoral.

Debate over whether the voluntary, bottom-up approach provides an effective basis. Would this reflect properly the functional economic areas and housing market geographies? See the discussion by Anthony Breach over at the Centre for Cities.

SDS could provide a solution to the problem of large unmet housing needs accumulating in our cities. This is likely to become more pointed as the mandatory Standard Method bites. Coupled with the ability to release Green Belt, this should go a good way to ensuring that our strategic authorities do accommodate all housing needs. Birmingham, Bristol and Brighton can no longer duck the issue.

The Devolution White Paper proposes empowering the mayoral strategic authorities so they no longer require full support of every constituent local authority (this had been a Tory device to counter the potential influence of a city mayor with a Labour-voting base). Proposing a majority instead. Something I called for five-years ago. This should make it easier to progress strategic plans and avoid non-ambitious plans that don’t upset anyone.

The model the Government seems to have in mind for SDS is the London Plan. This aggregates together the housing need based on the Standard Method for the constituent local authorities and then apportions it among the local authorities (assuming the mayoral combined authority model) based on an assessment of capacity and constraints. This means that some local authorities may get more housing, and some less (like Salford versus Bury or Kensington & Chelsea versus Newham). Don’t underestimate the political horse trading associated with this.

The apportioned requirement becomes the basis for the calculation for the five-year land supply and the housing delivery test. Under-delivery elsewhere within the combined authority will not impinge upon another local authority. If a constituent local authority under-delivers massively, the problem can’t be corrected within the adopted the SDS. This would not be the case, however, with the unitary model. The combined authority model quarantines other local authorities.

The downsides:

1. Just as we have a concerted push on local plan production, the requirement to produce SDS could cause delay to local plan making, delaying the embedding of the new Standard Method. This will compound the problem associated with the transition terms in the NPPF, December 2024 that Sam Stafford and others have spoken about.

2. Potential to redistribute housing numbers away from stronger markets. Inevitably, the more suburban and rural local authorities in combined authorities, and former areas of this type in the unitary model, will push for numbers to be concentrated on brownfield land and in more deprived areas, ostensibly to support regeneration. It is likely, therefore, that Solihull will push for the Black country and Coventry to take-up more in return for regeneration grants etc. Much also depends on whether strategic authorities will characterise themselves as single housing market areas, as London and Greater Manchester do.

Nature Restoration Fund:

This is the Government’s proposal to deal with the growing problem of restrictions on housebuilding in the wake of the EUCJ Dutch-N judgments. As the Explanatory Notes finally admit (para. 84) the market has not responded to supply solutions in the way that many politicians, commentators and lobbyists assured the Government it would. HBF has been arguing this for years.

The Government’s proposes moving away from a process of site-specific mitigation to one of compensation to address an environmental ‘obligation’ (its nomenclature) at a catchment level (also known as recovery). It calls this its Nature Restoration Fund

 The Government’s proposal cannot avoid a change in legislation because it entails changes to the way the Habitat Regulations has been interpreted and applied in the light of the Dutch-N caselaw. It must do this through legislation because its proposal could allow some harm in the short-term in return for greater gains, namely effective habitat and species recovery, in the medium term. The ability of member states to do this post Dutch-N was reduced, if not potentially unlawful.

The proposal will allow the Secretary of State (SoS) to identify an environmental issue – like nutrient neutrality – and instruct a public body (Natural England in the case of nutrients) to prepare an Environmental Delivery Plan (EDP) to resolve the issue. That EDP will be supported by the payment of a levy called the Nature Restoration Levy. Only the SoS can approve the Environmental Delivery Plan and allow the accompanying levy, including how much this levy will be.

 Once the levy is paid, the environmental obligation/s addressed by the EDP will no longer apply to the applicant. The applicant will have dischared legally his/her legal obligation (para. 89). The applicant will not need to provide assessments or nutrient budget calculations. This is the big benefit associated with the proposal.

 What is not clear to me at the moment, based on the draft legislation, is whether the payment of the levy by the applicant will allow construction to commence without any further delay (subject to all other planning requirements being addressed unrelated to the environmental obligations addressed by the EDP) – ‘pay to go’ in other words. I suspect that will be in the regulations, but this is a very important condition of the HBF’s support. We need clarity on this.

 The Bill implies that the local authority cannot apply a pre-commencement condition in relation to the environmental obligations addressed by the EDP (see page 97 of the Explanator Notes). In my view this is also essential for the effectiveness of the proposal and to avoid local planning authorities grinding the scheme intro the dust with overly cautious bureaucracy.

 Clause 58, subsection (2) is also important. I believe it is there to prevent an applicant who has committed to pay the levy, from being prevented to build-out if the EDP has to be amended. This is vital to avoid delays in construction, should there be questions or challenges raised about the effectiveness of the EDP, or if it is found subsequently to not be achieving the results intended.

 It is unclear how the local authority schemes to address nutrient neutrality financed by the Government through its Local Mitigation Fund (over £100 million) will work with this proposal. One assumes that Natural England will use the fund to purchase credits from these schemes, and factor them into its EDP as part of the programme of restoration.

Observations and corrections on all the above most welcome.