Response to Planning Reform Working Paper: Development and Nature Recovery

Our response to the working paper starts with some overall comments on the proposals in the working paper, followed by specific answers to the questions posed at the end of the paper.

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As Greenshank’s main focus is delivering nutrient mitigation schemes, most of the responses are based on our experience of delivering schemes for nutrient neutrality (NN).

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General comments on the working paper and the proposed Nature Restoration Fund (NRF)

It is our opinion that the working paper has been proposed largely as a response to the politically difficult and technically challenging problem of NN. As has been pointed out in other responses, there are programmes such as the Thames Basin Heaths Suitable Alternative Natural Greenspace (SANG) model that have been doing something similar to what is proposed here for a long time.

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These programmes tend to be less technically complex to deliver and have not become a seemingly intractable problem for competent authorities in the way that NN has. The responses from many other stakeholders involved in the delivery of existing programmes that tackle environmental planning obligations (District Level Licensing (DLL), recreational disturbance, etc.) is that these are not problems that need solving.

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Since the publication of the working paper, there have also been a number of ministers and Secretaries of State (SoS) in the media suggesting the NRF is an opportunity to do more than just mitigate for environmental impacts resulting from new development, delivering a “win-win” for nature and development, and that this will be done through a “strategic approach”.

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The NRF proposal is not happening in a vacuum, with other big policy shifts like the Land Use Framework and the Dan Corry Review likely to refine what strategic priorities may underpin the Delivery Plans that the NRF will be reliant on. The consultation documents for the Land Use Framework estimate that land use change is required on one fifth of the utilised agricultural land in England, and of this land area, half (around 10% of England’s utilised agricultural land) may need to change away from agricultural use entirely.

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We are aware that NN is probably the first environmental planning obligation that will be subject to a Delivery Plan and subsummation by the NRF. The working paper also makes it clear that delivery of environmental interventions funded by the NRF is likely to rely heavily on the private sector.

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It is therefore critical that the Government makes it clear, with significant lead time, what strategic prioritisation will underpin a Delivery Plan. This will give organisations time to gear up to provide what the NRF is seeking to support through Delivery Plans.

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Greenshank has focused our efforts on how to deliver cost-effective NN solutions because of the problems for development viability that have been caused by a reliance on land use change as a key mechanism to deliver nutrient mitigation. This approach has been very well received, and we are rolling out our approach at scale across the areas affected by NN.

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If there is a shift, driven by wider strategic priorities, that sees NN as a means to purchase and remove agricultural land from production, this will have considerable impacts on the floor price for nutrient mitigation, which will be pegged to land value. While there are opportunities to potentially stack environmental credits, additionality rules mean this is currently only possible with Biodiversity Net Gain (BNG) and NN.

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There may not always be a strong BNG market in areas where NN schemes are needed, meaning the ability to cross-subsidise between nature markets to reduce the price of meeting NN obligations cannot be relied upon to reduce costs for developers.

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It should also be recognised that the scale of mitigation scheme delivery achievable through NN, or other environmental planning obligations, is unlikely to make a ‘strategic’ contribution to land use or land management change. We have recently heard reports that Government is also considering a review of BNG, in part due to perceived delays to planning applications, and in part because green groups suggest BNG is not delivering nature restoration at a sufficient scale.

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Previous forecasts of BNG demand never suggested that a balanced BNG market would deliver a major contribution to the Government’s ‘30x30’ target. Similarly, there is insufficient demand from NN to drive landscape-scale nature restoration initiatives. It is essential that any proposed change to NN and other environmental planning obligations via the NRF recognises this.

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NN and BNG are hotbeds of innovation in nature markets, laying the groundwork for significant future investment in nature restoration. It is imperative that unrealistic strategic ambitions for the NRF do not hamper this innovation or reduce appetite for private investment in nature restoration that is not driven by the planning system.

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The scenarios in the working paper suggest that, in addition to NN, compensation and mitigation for impacts on protected sites and species will be key obligations targeted by the NRF. Greenshank does not have direct experience in protected species licensing or protected site compensation schemes, but responses from other stakeholders suggest these issues rarely act as blockers to development.

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When delays do occur, they are often due to a lack of resourcing within statutory bodies responsible for approving compensation, mitigation plans, and licences. This mirrors our experience with NN, where mitigation supply could have been significantly increased if not for delays caused by limited expertise and capacity within statutory bodies.

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This raises the question of whether such a substantial policy shift is required, when many of the challenges affecting environmental obligation delivery stem from resourcing constraints within local government and government agencies. These challenges will not disappear through centralisation, and accountability will ultimately sit with Defra and MHCLG if NRF implementation is delayed due to slow scheme approvals.

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While it appears unlikely that the NRF proposals will be withdrawn, it is vital that the NRF does not undermine the current development of nature markets. The commitment not to include BNG within the NRF is welcome, as are reaffirmations of Government support for nature markets.

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NN and BNG have demonstrated how private finance can be channelled into nature recovery. Excessive interference with existing market mechanisms risks undermining investor confidence and shifting delivery responsibility back to Government, which would pose risks to the timely delivery of the NRF and wider nature recovery goals.

Greenshank sees embedding market principles in the NRF as critical to its success and as an opportunity to shape governance and standards for high-integrity natural capital markets.

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The following sections provide specific responses to the questions posed in the working paper.

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a) Do you consider this approach would be likely to provide tangible improvements to the developer experience while supporting nature recovery?

• In principle, yes.
• The current NN system places a significant burden on developers to source mitigation.
• Sourcing often involves protracted contractual agreements or the delivery of entire mitigation schemes, which are technically complex and time-consuming.
• We believe the NRF should act as a trading platform for NN and other natural capital schemes, becoming a trusted supplier of environmental interventions.
• Developers consistently indicate a preference for a single supplier rather than negotiating with multiple schemes.
• However, we support the decision not to include BNG in the NRF, as BNG is beginning to function effectively as a market.
• A ‘one-stop-shop’ may be attractive, but existing systems like DLL and SANG already provide cost transparency and certainty.

While improvements are possible, careful consideration is required to avoid disrupting systems that already function well.

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b) Which environmental obligations are most suited to this model, and at what geographic scale?

• NN is the most dysfunctional obligation and would benefit most from reform.
• Obligations with established systems (e.g. SANG, DLL) may be easier to incorporate but risk short-term disruption.
• Delivery Plans must be underpinned by certainty that offsetting projects can be delivered.
• For NN, the NRF must operate at the catchment scale.
• Delivery Plans could also address spatial NN principles to better target nutrient sources.

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c) How could the process of developing a Delivery Plan be improved?

• Delivery Plans represent a key risk point in the proposals.
• Plans must provide practical and scientific certainty that mitigation can be delivered.
• Effective Delivery Plans require accurate demand forecasting and a consistent mitigation supply.
• Plans should prioritise nature-based solutions and be grounded in robust baselining.
• Geographic flexibility could allow for more effective mitigation delivery.

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d) Are there additional safeguards needed?

• Standards for mitigation approaches are essential.
• Additional framework methodologies are needed for land use change, septic upgrades, river restoration, and agroforestry.
• BNG systems (e.g. registers, reporting templates) could be replicated for other obligations.
• Pricing disparities must be addressed, particularly for small rural developments.
• A proportion of mitigation could be left unallocated to support high-cost developments at capped rates.

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e) Do you support a continued role for third parties?

• Yes. Most NN mitigation has been delivered by third parties.
• Private sector involvement is essential for cost-effective delivery and innovation.

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f) How could Environmental Outcomes Reports support this model?

• EORs could help ensure SuDS best practice is applied where developments are subject to NN requirements.

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g) Any other matters to consider?

• Mitigation pricing must remain market-based to encourage participation.
• NN mitigation should be priced per kilogram, not per dwelling.
• Per kilogram pricing supports innovation and onsite SuDS solutions.
• Targeted, cost-effective NN solutions are essential.
• Institutional delays within LPAs and Natural England must be addressed to accelerate scheme delivery.

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