Essential planning law updates for developers

As Head of Planning and Environment, I help clients navigate the challenges of today’s planning and environmental regulations. For Hugh James’ 2024 Housing Week, I’ll review several key agenda items that are transforming the planning process for developers and planning authorities alike.

Biodiversity Net Gain (BNG), which became mandatory in February 2024, will require developments to achieve at least a 10% net increase in biodiversity. This change has significant implications for planning permissions across England. The Community Infrastructure Levy (CIL), a financial charge that local authorities may apply to developments, also brings a range of exemptions and reliefs that require strict compliance to avoid penalties. Finally, Nutrient Neutrality (NN)—the obligation for new developments to demonstrate that they are not increasing nutrient pollution—now has government funding available to help developers meet these requirements, potentially unlocking projects delayed by compliance challenges.

Each of these items reflects a stronger governmental focus on sustainability, aiming to balance environmental goals with the demand for new housing. Here, I’ll discuss the implications of these changes and how they impact developers, planners, and communities as they work to adapt to this evolving regulatory landscape.

Biodiversity Net Gain (BNG)

BNG is one of the most significant recent developments in planning law and has meant that from 12 February 2024 every grant of planning permission in England under the Town and Country Planning Act 1990 for major development (unless exempt) will be deemed to be granted subject to a general BNG condition. The condition cannot be varied or removed.  For small developments the key date was 2 April 2024.

In particular, it requires the developer to provide a BNG of 10% on all habitats within the redline boundary of their development, whether or not they are impacted. Developers are required to deliver at least 10% BNG, either on-site or off-site, or by buying statutory biodiversity credits.

The effect of the condition is to secure that the biodiversity gain objective is met. This means at least a 10% increase in the biodiversity value of the habitat on the land to which the planning permission relates.  The condition requires that development may not be begun unless a biodiversity gain plan has been submitted to the planning authority, and the planning authority has approved the plan.

Major development includes residential developments with 10 or more dwellings or other residential development where the site area is 0.5 hectares or more and the number of dwellings isn’t known. It also includes the provision of buildings (residential or otherwise) where the floor space to be created is 1000 square metres or more, or any development carried out on a site having an area of 1 hectare or more.

Small developments are developments between 1 – 9 dwellings or a residential site smaller than 0.5 hectares and buildings with less than 1,000 sqm of floorspace or development carried out on a site having an area of less than 1 hectare.

There are transitional provisions found within the Environment Act 2021 (Commencement No. 8 and Transitional Provisions) Regulations 2024 that set out various exemptions for the need to meet this requirement. These include, amongst others, the following:

Householder development: development to an existing house, but not including a change of use or a change to the number of dwellings.

Small scale self-build and custom housebuilding: this only applies to development of no more than 9 dwellings, on an area no larger than 0.5 hectares and exclusively consisting of dwellings within section 1(A1) of the Self-build and Custom Housebuilding Act 2015.

It is important to note that whilst the details of BNG are a post-permission matter they will require the submission of a BNG plan prior to the commencement of the development and it is therefore imperative that you engage your ecologist at an early stage in the process to ensure that the BNG condition can be discharged and also to avoid any delays following the grant of permission.

In practice, compliance with the mandatory condition (i.e. the delivery of the 10% net gain) will normally need to be achieved through section 106 agreements (or in some cases through conservation covenants). This is because any mitigation and enhancement that is required in order to achieve the 10% BNG must be maintained for at least 30 years after the development is completed.

Community Infrastructure Levy (CIL)

The CIL is a financial charge which local planning authorities are entitled (but not obliged) to charge on development in their area.  Normally, a LPA will adopt a charging schedule and the CIL charge for the development will depend on the size of the developable area, its location within the administrative area and then the tariff that applies an amount per square meter of development.

There are though a number of reliefs and exemptions available that can reduce the amount payable.  These include, amongst others, social housing relief, self-build exemption and minor development exemptions.  There is also the “in-use” credit which allows developers to offset the floorspace of existing buildings against the CIL liability for new development.  There is though strict criteria that must be met in order to benefit from this credit.

It is also key when seeking to obtain relief or exemption that the various forms required to be completed and submitted to the LPA are done prior to the commencement of development or the developer may lose the ability to benefit from the same.  Equally, there are strict conditions that must be satisfied once the relief or exemption is granted and sanctions can apply if that is not adhered to.

Nutrient Neutrality (NN)

Nutrient neutrality requires developments – that propose a net increase in the number of dwellings – to prove that all surface water runoff and wastewater generated by the development will be less than, or equal to, the nutrients generated by the existing land use. This aims to reduce nutrient pollution within our wildlife in both freshwater and river habitats.

In practice, this requires developers to calculate ‘nutrient neutrality’ in order to prove that their proposed development avoids adding to existing levels of pollution.  It will, however, come as no surprise that the rules have stalled the development of thousands of homes as developers looked to find practical solutions in order to demonstrate that their scheme satisfied the NN rules.

Natural England’s Guidance on NN sets out a range of commonly suggested mitigation strategies that can be used to address NN and include, amongst others, replacing existing inefficient septic tanks and Package Treatment Plants (PTPs) with improved PTPs; retrofitting Sustainable Urban Drainage Systems (SUDs) into existing developments or the creation or restoration of new semi natural habitats e.g., woodlands/ grasslands/Natural wetlands.

It seems the Government has now found a key – in the form of £47 million worth of funding – to unlock 28,000 nutrient neutrality stalled homes according to its press release last week.  Importantly, the Government has announced that the Local Nutrient Mitigation Fund will ensure building the homes we need will not come at the expense of the environment, with the funding being used to protect local rivers and precious habitats.

The press release goes on to say that “As part of the government’s plans to get Britain building again, the Local Nutrient Mitigation Fund will boost housebuilding through locally led schemes, such as creating new wetlands and upgrading septic tanks, to enable development is sustainable.”  It goes on to state that “twenty of the largest sites impacted by nutrient neutrality will each receive a further £100,000 to support planning teams who will implement pollution solutions across the local area” which will come as a welcome relief for developers who have been affected by the NN rules.

This update comes hot on the heels of news that the Supreme Court has granted CG Fry & Son Ltd – a developer who had argued that the so-called NN rules did not apply to a 650-home scheme for which he received consent for in 2015 – when he sought to discharge pre-commencement conditions attached to the reserved matters approval, which it had secured in June 2020, for the third phase of the scheme, near the town of Wellington.

Conclusion

With planning regulations rapidly evolving, it’s essential for developers and planning authorities to stay ahead of new requirements, from Biodiversity Net Gain and Community Infrastructure Levy compliance to Nutrient Neutrality. These changes highlight the government’s commitment to balancing environmental protections with the pressing need for sustainable housing. Meeting these standards means planning ahead, working closely with ecological and legal advisors, and understanding how each requirement will impact your project.