Impact of Environmental Regulations on Development (Built Environment Committee Report)
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The Parliamentary Under-Secretary of State, Department for Levelling Up, Housing & Communities (Baroness Swinburne) (Con)
As ever, I am grateful to noble Lords for their considered views on this important topic. Given the number of recommendations in the report and the number of topics raised today, I will try to do justice in responding to them.
I begin by reiterating this Government’s commitment to delivering the homes that we need, while ensuring that we continue to protect and enhance the environment. Through the Environment Act 2021 and the environmental improvement plan, the Government have been clear in their ambition to be the first generation to leave the environment in a better state than we found it. This ambition has been carried through the Levelling-up and Regeneration Act 2023 and our recent updates to the National Planning Policy Framework, to ensure that development continues to support environmental recovery. However, like the committee, the Government recognise the need to ensure that environmental regulation is proportionate and effective in supporting the delivery of much-needed developments.
As noble Lords said—particularly my noble friend Lord Moylan in his opening remarks—a key focus for the Government is to increase housing supply. I reassure my noble friend, as well as the noble Earl, Lord Russell, and the noble Baroness, Lady Thornhill, that we are on target to meet our manifesto commitment to deliver 1 million homes in this Parliament. Indeed, since 2010, we have delivered 2.5 million additional homes—but we can and must do more, and in a balanced way.
To maintain this balanced approach to increasing housing supply, and to drive growth and development, national planning policy needs to create certainty, as numerous noble Lords said. That is why we used the Levelling-up and Regeneration Act to introduce powers for national development management policies to be produced. These policies will have statutory force and will guide decision-making on planning applications across England, helping local authorities produce swifter, slimmer and more locally relevant plans, and ensuring that important protections have the recognition that they deserve. We are working to prepare these policies now and will consult on them in due course.
The Government echo the sentiments of the committee: local planning authorities need up-to-date local plans, as the noble Lord, Lord Jackson, stated. That is why in December we reaffirmed our commitment to a plan-led system, creating strong incentives for local authorities to get their local plans in place, and encouraging authorities to make balanced decisions that support their diverse communities.
For local authorities to be able to have a plan in place, deliver it and do this efficiently, they will need our continued support. I reassure the noble Lord, Lord Berkeley, and the noble Baronesses, Lady Bennett and Lady Thornhill, that we will continue to provide additional financial support. This includes the planning skills delivery fund, which has been boosted to £29 million, allowing the planning application fees to be increased, and indeed a further £13.5 million to support a new “planning super-squad”. This will be made up of leading planners and specialists, who will be deployed across local planning authorities to accelerate the delivery of homes and development and to support those local planners.
As highlighted by the committee and reiterated here today by numerous if not all noble Lords, nutrient neutrality and its interaction with the habitats regulations has created a situation where some local authorities are not able to approve development. To remedy this, we continue to provide funding for local authorities to support strategic management and mitigation plans in their areas. In December 2023, we confirmed the first tranche of the local nutrient migration fund, which totals some £110 million, as referred to by the noble Baroness, Lady Thornhill. It aims to promote innovative approaches to delivering mitigation and to enable more effective mitigation solutions, with a second round of nutrient support funding to lead authorities in substantive catchments.
Indeed, the funding is already delivering an impact, enabling sustainable development in affected catchments. As many noble Lords will know, Natural England’s scheme is providing credits for some 4,500 homes in the Tees catchment so far, and through the local nutrient migration fund the Government have awarded £57 million to eight local authorities in December. That included funds of some £10 million to Wiltshire Council, which has enabled the construction of integrated wetlands, a nature-based solution to reduce nutrient pollution. A further £9.6 million to Somerset Council supports an innovative reverse-osmosis technology building on research from the University of Birmingham. This is rapidly boosting the supply of nutrient mitigation in these areas, which translates directly into more housing.
I congratulate the noble Lord, Lord Banner, on his excellent maiden speech and take this opportunity to welcome him to the House. I think we can all look forward to his further contributions in this Chamber, drawing on his wealth of experience in planning and environmental law.
Although the Government recognise the serious issues that noble Lords have described with regard to nutrient neutrality, I believe it is attainable. There is a lot that we can do and are doing to allow housing delivery to progress, even in areas affected by nutrient neutrality. Where there is a sufficient supply of mitigation, housing delivery is unlocked. I agree with noble Lords that assuring the delivery of long-term, major water supply infrastructure is an important element of this joined-up strategy, and we are seeing examples in Cambridge and elsewhere. We are working on addressing the water scarcity issues, as proposed by various schemes.
I am cutting out an awful lot of my paragraphs to make sure that I do not overrun while trying to answer your Lordships’ questions and understand my own scribbled handwriting, so I apologise if this does not sound as eloquent as it might have done when it was originally drafted.
We will of course continue to support local authorities, having opened a second expression of interest process, open to all nutrient-neutrality catchments. We are continually looking at ways to work more strategically on the delivery of mitigation on top of our close partnership with Natural England, which manages the £30 million nutrient mitigation scheme.
In response to the comments of the noble Lord, Lord Best, and the noble Earl, Lord Russell, one of the clearest examples of the Government’s commitment to ensuring a proportionate approach to environmental regulation is the new system of environmental outcomes reports that will be brought forward using the powers secured through the Levelling-up and Regeneration Act. Processes for environmental assessment have matured since they were first introduced, yet, despite lengthy assessment reports, they often prove ineffective at securing better environmental outcomes or encouraging development to support the country’s most important environmental priorities. A tailored approach to assessment that properly reflects the nation’s environmental priorities via environmental outcomes reports will ensure that assessment moves away from being a costly, passive process to one which focuses on supporting the delivery of the environmental outcomes we all desire. The Government will shortly publish their response to our initial consultation and will be working at pace with the sector on the detailed design of this important new system.
We agree with numerous noble Lords, including the noble Lords, Lord Moylan, Lord Banner, Lord Berkeley and Lord Jackson, and the noble Baroness, Lady Eaton, that taking agricultural land out of production is not the optimal way of addressing nutrient pollution. However, food security and housing delivery can be seen as compatible rather than as conflicting aims. More efficient nutrient management is a win-win, and while improving agricultural practices is a long-term solution, we are taking many of those actions now. Our nutrient reduction plan includes funding for agriculture, encouraging further nutrient management actions for farmers, and includes plans to modernise fertiliser standards, developing innovative solutions locally, as we are seeing with the River Wye.
We are also seeing immediate benefits through action we have taken to improve water infrastructure; the duty to upgrade wastewater treatment in affected catchments by 2030 is an important additional step in unblocking housing delivery. I agree with the noble Lords, Lord Berkeley and Lord Best, the noble Baronesses, Lady Eaton and Lady Taylor, and the noble Earl, Lord Russell, that joined-up working to address this important issue is crucial, and officials from across Defra, DLUHC, Natural England and the Environment Agency are working closely on a daily basis on trying to deliver these competing targets.
The Government recognise just how important it is for these public bodies to be appropriately resourced, just as it is for local planning authorities. That is why, over the 2023-24 financial year, the Government have provided an additional £5.6 million to increase the number of staff at Defra’s arms-length bodies.
Biodiversity net gain became mandatory on 12 February for new major developments and on 2 April for non-major development except where exemptions apply. We have been assisting local authorities with its implementation, providing funding which they can use to recruit ecologists or additional planners, as well as training through the Planning Advisory Service. Also available is a package of guidance designed to help with the implementation of biodiversity net gain, showing authorities how they can monitor and enforce it, as well as how the 10% net gain should be applied. Smaller developers need support, so we have provided a simplified small-sites metric to streamline the process for calculating net gains for small sites where there is no priority habitat present.
As many noble Lords mentioned, we are prioritising brownfield development. It is key to delivering the homes our communities need, but it also provides important opportunities to improve our environment and regenerate places, hence our strong encouragement of the reuse of suitable brownfield land in policy. We have consulted on changes to the National Planning Policy Framework that would place an even stronger emphasis on the value of using suitable brownfield land for homes, and we have also introduced funding incentives to support brownfield development. This includes £5.1 billion that is making its way to the existing brownfield housing fund to unlock and prepare more sites for brownfield development.
With regard to solar, which the noble Lord, Lord Berkeley, mentioned, the Prime Minister said earlier this week that we want to see more solar but on brownfield sites, on rooftops and away from our best agricultural land if at all possible. National planning policy is clear: where significant development of agricultural land is demonstrated to be necessary, areas of poorer-quality land should be preferred to those of higher quality.
I note what the noble Earl, Lord Lytton, said about water neutrality and water efficiency, and that is why the Government have committed to reviewing the building regulations in order to introduce tighter water efficiency standards in new homes. In the meantime, in areas of serious water stress where water scarcity is inhibiting the adoption of local plans or the granting of planning permission for homes—including north Sussex—we will find ways and solutions to unlock what we need to unlock.
I close by thanking noble Lords for their work on this report and on this committee more widely. I am confident that, through our work to improve national planning policy and procedures, we will continue to achieve a balance between protecting our environmental assets and making sure that the right homes and infrastructure are in the right places in support of our communities.