Councils to bid for nutrient mitigation scheme funding

The government has called for expressions of interest for up to £10m in grant funding to help create local schemes designed to unlock development where it has been stalled by the nutrient pollution crisis.

The call for bids from local authorities follows on from a promise in Jeremy Hunt’s Spring Budget to provide funding to “support clearer routes for housing developers to deliver ‘nutrient neutral’ sites”.

The news comes as upwards of 100,000 homes are estimated to be held up in the planning pipeline because of Natural England’s requirement that developments in protected areas demonstrate “nutrient neutrality” where watercourses are in a poor condition.

The consultation paper published by the Department for Levelling Up, Housing and Communities late last week did not specify the total amount of government funding to be made available to support nutrient mitigation projects, but that individual bids should not be for more than £10m.

Natural England allows developers to offset nutrient pollution created through new development by the creation of habitats such as woodland or wetlands elsewhere in the same river catchment that remove the equivalent amount of nutrient pollution as a new development adds. However, this is generally impossible to achieve “on-site”, requiring developers to wait until the relevant local authority has created a habitat it can “buy” credits from.

>> See also: How do we stop the nutrient neturality problem holding up development?

>> See also: Solving nutrient neutrality puzzle is a key test of ministers’ housebuilding commitment

The government’s consultation said it was looking to support schemes which are being designed or are ready to be delivered/expanded, and that further rounds of funding would be made available in autumn this year and spring 2024. Money will be made available as grant to “allow for the creation of credits which can be sold to developers […] with the subsequent receipts recycled by the recipient local planning authority with a view to funding further measures to tackle nutrient pollution”, it said.

The problem affects 74 local authorities across 27 river catchments, totalling 14% of England’s land area, with the consultation admitting the problem posed “a major barrier to the government’s ambition of delivering 300,000 homes per year by the mid-2020s”. Any of the 74 affected authorities will be able to bid for the funding, it said.

Alongside the call for bids, the consultation also launched a call for more detailed evidence of the impact of the nutrient neutrality crisis on development and planning. So far the best estimate of its impact, of between 100,000 and 120,000 homes held up in the planning pipeline, comes from the Home Builders Federation, but has been collated from a number of different sources.

The government has already committed to spending £30m to set up a National Nutrient Mitigation Scheme led by quango Natural England, and introduced a series of measures into the Levelling Up and Regeneration Bill designed to force water companies to improve water treatment facilities.

However, developers have criticised the government for doing little to tackle the immediate problem, with many sites already stalled for a number of years.

James Stevens, director of cities at the Home Builders Federation, said the consultation was a public acknowledgement by the government that the issue of nutrient neutrality was a major barrier to housing supply. He said: “Government now must intervene to prime the market in nature-based or other solutions.

“This confirms the HBF’s view that creating a market supplying solutions has been much harder to establish than many commentators expected. The consultation also reveals the government’s concern about the collateral impact on affordable housing supply and brownfield regeneration owing to the cost of solutions.”