Impact of Environmental Regulations on Development (Built Environment Committee Report)

Baroness Thornhill Excerpts

Friday 19th April 2024 Lords Chamber

[Baroness Thornhill (LD)]

I too welcome the noble Lord, Lord Banner, to our Chamber; I appreciated his extremely pertinent contribution. Likewise, I echo my thanks to my committee members and to Kate and Kelvin, who kept the herd of cats focused. I am no longer a member of the committee, but I really enjoyed my time with them.

This has been a stimulating debate with some excellent contributions, kicked off most incisively by our indomitable and knowledgeable chair, the noble Lord, Lord Moylan. What is clear from the contributions of all noble Lords is that this report has laid bare the failure of government to meet either its environmental objectives or its housing targets.

As has already been said by the noble Baroness, Lady Eaton, the Office for Environmental Protection—whose representatives were of excellent calibre—gave evidence in the annual report saying that the Government remain largely off track to meet their environmental ambitions, including those set out in the 2021 Act. Sadly, we were not surprised by the Secretary of State’s admission to the committee that the 300,000 housing target will not be met in this Parliament. This is a failure on both objectives.

As the noble Lord, Lord Mawson, strongly stated, we found the Government’s response disappointing, to put it mildly. In fact, I go so far as to say that it felt like there was a collective giving up on trying to engage with the issues, and many answers were just assertions that they rejected the committee’s findings. Despite very strong evidence that both sets of targets would not be met, they did not engage with the evidence that we put forward.

It was a challenging inquiry in different ways, but it was soon established that this was a battleground, and entrenched positions were taken up. Regrettably, because their respective roles are so important, Natural England versus Defra and the Environment Agency and/or the greedy developers featured as the villains of the piece, depending on which side of the battle you were on, with poor council officers stuck in the middle of the fray trying to referee.

Some of our witnesses were clear that with the right policy levers and leadership from government, the objectives were not mutually incompatible. But lack of policy co-ordination and implementation were exacerbating the problem and hampering delivery, as several noble Lords have mentioned.

As we have heard today, the report identified very clear policy conflicts between the Government’s food security ambitions, in particular, and steps to offset nutrient pollution or to deliver biodiversity net gain. Both are resulting in active farmland being taken out of use, including through Natural England’s own mitigation schemes.

There is no doubt that the impact of water pollution measures and nutrient neutrality rules has resulted in fewer homes being built. The former has been the reason for some councils in effect calling a moratorium on housebuilding in their area. This has been to great fanfare and whoops of delight from nimby residents and their councillors in some areas.

A quick study of the councils is revealing. I am not aware of any parties’ political leaflets going out saying, “Boo, hiss, the nasty Government are stopping us building lots of much-needed new homes—shame on them”, but rather the opposite. I would be grateful for the Minister’s update on the Government’s position with those councils. Is there actively any engagement with councillors who sit on the planning committees that make the decisions?

It was clear to us that finding solutions to allow housing to go ahead is technically challenging. For example, I learned about the science of working out how many nutrients can be offset by creating a wetland. There is undoubtedly a shortage of people in individual councils with the right skills and knowledge, as was mentioned by the noble Lord, Lord Berkeley. For councils it has been a steep learning curve, as it has for the private sector and public bodies.

Developers looking for a way to meet their obligations find a complex, complicated and inconsistent system. This particularly impacts on SME builders, as has also been said. The market in schemes providing mitigation and selling credits to housebuilders has not materialised or grown quickly enough to meet demand. Some of the designated catchments are still without schemes, such as the River Eden and Bassenthwaite catchments in the north-west. Even in areas with relatively mature credit markets, availability is not always good.

Part of the problem is the lack of central standards and accreditation. It seems that it is up to each individual local Natural England team as to whether the proposed solution is acceptable. Will the Government consider an independent set of standards and accreditation to circumvent the need for Natural England to have to approve every single solution, which inevitably leads to delays and inconsistency?

As ever, funding is clearly an issue. The Government have set aside a £110 million nutrient mitigation fund, but as always it is a competitive bidding process, which those of us in local government know is a barrier and does not always result in those with the greatest need getting the appropriate amount of money to make a difference. As yet, there is no timetable for when these local authority schemes will be operational.

Do the Government have an assessment of the availability of both local authority and commercial credit schemes in each of the nutrient-sensitive areas, including when they expect the local authority-funded schemes to become operational and how many homes are expected to be supported? Unfortunately, there is real uncertainty and inconsistency with local authority schemes, not least regarding the cost of credits, which I was surprised to find varies considerably. This is exacerbated by the paucity of credits and the lack of competition in this area.

It came over strongly in the report that collaborative working was the key to success—there is no surprise there. Councils need clarity over the roles of the regulators, as this is critical to stopping nutrients entering the water systems in the first place, coming mainly from agriculture and water treatment. To make this effective, there have to be more formal data-sharing agreements between councils and water companies, as the lack thereof is hampering progress.

Are the Government acting now on changing agricultural practices that would help in the short term? Perhaps the Minister can update us. It must be said that housebuilding contributes a very small amount to nutrient emission. The biggest source of pollution is farming at 70%, as we know, with 30% coming from the activities of the rest of the built environment, including existing residents.

This is a significant and bold report. Much more could be said, and I have just scrapped a couple of paragraphs. In truth, noble Lords have given it a good critique today. It seems we agree that the two objectives are currently incompatible, and it will probably take another Government—and perhaps a few decades—to pull everything together, to get a grip and to reconcile the very valid goals of reducing pollution and building more homes. If we do not, we face the lose-lose situation of pollution continuing to accumulate unchecked, with our rivers facing total ecological collapse while our housing crisis gets worse.