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How we can build more homes and restore rivers

Sam Hall, director of the Conservative Environment Network

Building more homes and cleaning up England's rivers should not be opposing goals. Conservative environmentalists believe that we can and must do both. Changes to nutrient neutrality guidance were necessary, with so many young people desperate to get on the housing ladder, and the new measures to mitigate additional pollution are welcome. But the government has missed the opportunity for more holistic reform of the habitats regulations to benefit both housing supply and nature recovery.

Because England’s waterways are in a poor state, EU-inherited rules to protect important wildlife sites have been stopping new housing from causing further pollution. The housing blockage has stemmed from ‘nutrient neutrality’ guidance from Natural England. The guidance gives effect to laws that safeguard already polluted protected sites from further pollution. In practice, it means that developers must offset nutrient pollution from new homes through creating habitat to remove pollution from rivers. But currently there is a limited supply of accredited nutrient offsets, leading to a de facto block on new homes in nutrient neutrality areas.

Ministers have had to walk a tightrope. They can’t scrap the habitats regulations, which are an essential ecological safeguard to protect precious fragments of nature and the most valuable parts of our natural inheritance. But nor could they let the de facto block remain, as the rules are now thought to hold up over 120,000 homes across 74 local authorities, when many feel affordable rent let alone homeownership is further out of reach than ever.

It would have been environmentally irresponsible, as well as politically damaging, to simply allow new house building to increase already high river pollution levels, even though it only causes a small share of nutrient pollution. Only 14 percent of England's rivers are in good condition, with a toxic mix of pollutants and chemicals harming wildlife and preventing people from enjoying rivers recreationally. And only 39% of Sites of Special Scientific Interest in England are in good condition. Further pollution would make these key indicators worse, while the government has a legally binding target to halt nature’s decline by 2030.

For these reasons, the package of pollution mitigation measures is welcome, as it will prevent overall pollution levels in rivers from increasing and further damage to protected sites. Ministers are right to put the focus on reducing the far larger sources of water pollution - namely, agriculture and the water industry.

The government has already amended the Levelling Up Bill to require water treatment works to achieve the highest technical standards by 2030, which is the long-term solution for preventing new homes adding pollution to rivers. Nature-based solutions like wetlands are often cheaper than engineered solutions, as well as delivering wider biodiversity benefits. So allowing water firms to use nature-based solutions to achieve this requirement will help minimise consumers’ water bill increases. This change will also support nascent private markets for nature, as water firms will be able to buy credits from farmers who create wetlands near their treatment works.

It is worth noting the dependence of the mitigation package on the move away from EU-derived subsidies for owning land. Runoff from agriculture is the biggest single polluter of rivers, responsible for 40 per cent of damage to waterways. In recognition of farmers’ role as food producers, the government is offering additional grants and payments for farmers to reduce their pollution, rather than following the more free market approach of making them pay for the costs of their pollution.

As a result, any delays or weakening of ambition of the new Environmental Land Management schemes would have a significant impact on this mitigation package and the health of our rivers. Having offered farmers financial help to achieve compliance, the government should signal that it will in due course begin stronger enforcement of water quality rules.

But the government has missed the chance for a more holistic reform of the habitats regulations. Issues like nutrient neutrality will continue to arise until the government undertakes wider policy change. The habitats regulations have been an important backstop for the natural environment and prevented things getting even worse, hence why the environmental sector has been so conservative about potential reform. But post-Brexit it is now possible to design protections that improve the outcomes for nature but also simplify the process and speed up regulatory decision-making for businesses.

A similar problem has emerged in relation to the offshore wind sector, which has endured delays and had to pay significant amounts to mitigate harms to marine protected areas on a project-by-project basis. Through the Energy Bill, the government is legislating to speed up the process and allow developers to mitigate impacts strategically across multiple projects. It is a shame the government didn’t use a similar solution for nutrient neutrality, which would also have required the housebuilding sector to fund mitigations, rather than funding them with taxpayers’ money and asking developers for voluntary contributions.

A more wide-ranging reform could both unblock new homes and clean up our rivers. The government has hinted at this approach with the announcement of more Protected Site Strategies, which are long-term plans to get important wildlife sites into a good condition, but they have only limited them to the worst-affected areas. Furthermore, the legislative change will simply exempt new homes from the rules in relation to nutrient pollution, rather than taking this more strategic approach.

The other disappointing element is the impact on nascent private markets for nature. Nutrient offset schemes were a promising new source of private funding for nature, alongside biodiversity net gain, but nutrient reduction will now be directly funded by government instead. Given the funding gap for meeting the government’s nature recovery targets and limits on public spending, attracting more private funding into environmental improvements is crucial.

We should maintain some perspective on today’s announcements. Because of the mitigations, the environmental outcomes ought to be the same. It is not a panacea for housing affordability: the scale of the UK’s housing need is far greater than the number of homes freed up by this change. Similarly, the contribution of housebuilding to river pollution and the scope of the exemption to the habitats regulation is relatively small. Instead, the worry is what it says about the government’s approach to post-Brexit regulatory reform and funding nature restoration.

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