Policy paper

Implementing the Nature Restoration Fund

Published 18 December 2025

Applies to England

Ministerial foreword 

We remain firmly of the view that when it comes to development and the environment, we can do better than the status quo, which too often sees both sustainable housebuilding and nature recovery stall. Instead of environmental protections being seen as a barrier to growth, we are determined to unlock a win-win for the economy and for nature.

The current approach to discharging environmental obligations too often delays and deters development, placing unnecessary burdens on housebuilders and local authorities. It requires housebuilders to pay for localised and often costly mitigation measures, only to maintain the environmental status quo. By not taking a holistic view across larger geographies, mitigation measures often fail to secure the best outcomes for the environment.

The Nature Restoration Fund (NRF) provided for by the Planning and Infrastructure Act provides an alternative to this sub-optimal arrangement. By facilitating a more strategic approach to the discharge of environmental obligations, leveraging economies of scale and reducing the need for costly project-level assessments, it will streamline the delivery of new homes and infrastructure and result in improved environmental outcomes, delivered more efficiently.

Strong safeguards are built into the legislation to ensure positive environmental outcomes. These include a binding overall improvement test, monitoring and back-up measures, remedial action, and the ability to amend or revoke plans if necessary. These protections ensure accountability whilst still allowing the flexibility necessary to drive strategic nature recovery, while supporting the delivery of the homes and infrastructure we need.

The NRF model builds on proven successes – from enabling over 50,000 homes around Thames Basin Heaths whilst protecting ground-nesting birds, to unlocking more than 20,000 homes in the Arun Valley whilst safeguarding internationally important wetlands. These examples show what’s possible when we move beyond the constraints of site-by-site assessment and embrace the opportunities provided by a more strategic approach.

The Nature Restoration Fund represents the next evolution of this strategic approach to development and the environment. By working in partnership with Natural England, local authorities, communities and developers, we can build the homes and infrastructure Britain needs whilst improving our natural environment for future generations. This is not just an aspiration – it’s a practical pathway to the resilient, prosperous and nature-rich nation we’re determined to build.

Mary Creagh CBE MP, Parliamentary Under-Secretary of State (Minister for Nature)

Matthew Pennycook MP, Minister of State (Minister for Housing and Planning)

Introduction

In December 2025, the Planning and Infrastructure Act (2025) received Royal Assent and is now law. A key part of this Act is the Nature Restoration Fund (NRF). 

The NRF introduces a new way for housing and infrastructure developers to meet their environmental responsibilities where their projects affect protected sites or species. Natural England will deliver the NRF through Environmental Delivery Plans (EDPs). Each EDP will cover a specific area and outline a package of conservation measures that will address one or more impacts of development on a protected site or species. Where an EDP is in place, developers can make a payment into the NRF to meet their environmental responsibilities. 

This is a change to the current system, where developers must identify any impacts and put in place their own site-specific mitigation measures – a process that can be complex and uncertain.

The NRF allows a more flexible and strategic approach. The main benefits of this are: 

1. Better outcomes for nature: Payments from multiple developments will be pooled, allowing Natural England to deliver conservation measures at scale. This will maximise environmental benefits. The Act requires that, by the end of each EDP, the effect of the conservation measures will materially outweigh the effect of the EDP development on the conservation status of each environmental feature. 

2. A simpler, more predictable process for developers: they will have access to a streamlined process and simple user experience. The result is a win-win for development and nature. 

Earlier this year, the Ministry of Housing, Communities and Local Government (MHCLG) published a factsheet on the NRF, which sets out more on the principles and aims of the NRF. 

This plan sets out how we will deliver the NRF now that its legislative framework is in place, including: 

• how the NRF will work in practice
• our implementation plans and milestones

The government recognises that the NRF is a change in approach and successful implementation goes beyond merely introducing the reforms. It is important that everyone understands our next steps and feels confident that the model will deliver for development and nature. 

The government appreciates the constructive way that stakeholders have worked with us so far. We look forward to continuing this engagement at a local and national level as we move into delivery. 

How the NRF will work in practice 

This section sets out how the NRF will operate in practice, from the creation of Environmental Delivery Plans (EDPs) through to ongoing monitoring and evaluation of them.

Phase 1: Creating an EDP 

Natural England will prepare a draft EDP for an impact on a protected species or site, or multiple species and sites, affected by development in a specific area. The draft EDP will use the best available scientific evidence and be developed with local partners.

Each EDP will include: 

• a definition of the environmental feature(s) covered by the EDP (such as a protected species or site) 
• the environmental impacts of development on these features that the EDP will address 
• clear maps setting out the area covered by the EDP 
• the scale and type of development the EDP can support 
• the conservation measures which will be deployed to address the impact of development on the described environmental features across the given area 
• where the environmental feature is a protected species, the terms of the licence that will be treated as having been granted and also how any such licence meets the species licensing tests derived from international law 
• a charging schedule that will include covering the costs of the conservation measures - developers will pay this to meet the relevant legal obligations associated with the impacts addressed by the EDP 

The draft EDP will go through a minimum 28 working day public consultation, giving stakeholders and the local community an opportunity to comment. Natural England will consider feedback from the consultation before both the final draft EDP and the consultation responses are passed onto the Secretary of State.

On receipt, the Secretary of State will consider the draft EDP and, in particular, whether the effect of the conservation measures will materially outweigh the negative effects of development on the conservation status of each identified environmental feature by the EDP end date. Only if they are satisfied that this is the case can they approve the EDP and it will come into effect.

Phase 2: Using an EDP 

The process for each EDP will vary slightly depending on the specific type of development and the consenting regime to which it applies. The general process is as follows.

• When an EDP comes into effect, developers will be able to use an online platform to obtain an estimate of the levy they would need to pay if they used the EDP.

• The overwhelming majority of EDPs are expected to be voluntary and developers can choose whether to opt for their development to utilise it. They will then be able to request inclusion within the EDP from Natural England. In exceptional circumstances it is possible for EDPs to be mandatory but the Secretary of State will only make such EDPs where Natural England has satisfied them that it is necessary.

• Once approved, the EDP can be relied on by developers in a planning application in place of the required habitats assessment or species licence (as relevant) for the environmental feature included.

• Once planning approval is granted the developer is committed to pay the levy. This gives local authorities confidence that their obligations will be fulfilled through the EDP. 

During the consideration of a planning application, local planning authorities are expected to apply any planning conditions set out in the EDP which the developer is using. The local planning authority will work closely with Natural England where the wording of that condition is not appropriate to the particular development being considered. Developers will need to pay the nature restoration levy to a timetable agreed with Natural England, for instance once development has begun, and following the charging schedule. Natural England will use this money to deliver the necessary conservation measures. 

Once an EDP comes into effect, Natural England will engage with nature recovery and services partners who have expressed interest during pre-market engagement and will run a clear and open tendering process for the delivery of conservation measures. 

Phase 3: Reporting and monitoring 

Throughout an EDP’s duration, monitoring will play a critical role in providing the scientific evidence and confidence that conservation measures are achieving the desired effect. Natural England is required to publish organisational annual reports, which will provide a high-level view of NRF progress including the amount of money received and spent under each EDP. These will be accompanied by EDP-specific reports published at the mid-point and end-point of an EDP. These will show the delivery of conservation measures and whether they are on track to achieve the desired positive environmental outcomes. 

These measures will be delivered over the duration of the EDP. Through this careful monitoring, Natural England will ensure that conservation measures under each EDP materially outweigh any negative impact of development relying upon the EDP. Where monitoring shows these measures are insufficient, Natural England will ensure backup measures are deployed. 

Where necessary, maintenance will continue beyond the EDP’s end date (and for as long as needed) to deliver the environmental benefits set out in the EDP. In these cases, monitoring may remain in place. This will provide the Secretary of State with confidence that the overall improvement test has been achieved.

The Secretary of State has the power to amend an EDP, meaning where they are not confident the overall improvement test will be achieved, they can amend the EDP to make it achievable by the EDP end date.

The Secretary of State must publish a statement if an overall improvement has not been achieved by an EDP end date or at EDP revocation. This statement must set out the proportionate remedial actions that will be taken to secure the overall improvement.

Our implementation plans 

This section sets out how we will deliver the NRF. It covers: 

Approach to developing and delivering the NRF

The following principles will guide the development and delivery of the NRF. 

Driving nature recovery through an evidence-based approach

Natural England will use robust ecological evidence, scientific literature, research and data to model, the impacts of development pressures and identify effective conservation measures. This evidence-led approach will support nature recovery by drawing on best practice from existing schemes and make use of the best available scientific evidence for preparing, amending or revoking an EDP.

Unlocking growth 

The NRF will be about unlocking a win-win for the economy and nature. This means focusing on issues and impacts that will unlock sustainable development, introducing tools such as new digital systems which will streamline processes. These improvements will unlock growth and deliver on nature recovery. 

Engaging nationally and locally 

Engagement with stakeholders will be a central part of developing each EDP. Natural England will work closely with stakeholders throughout the process. This will ensure transparency, gather insights, and build understanding of each EDP’s purpose and content. This approach ensures that EDPs are informed by local context and priorities while maintaining consistency with national standards and statutory requirements. As part of this, all EDPs will also be subject to public consultation. 

Supporting Nature Markets

Private and third sector providers will play an essential role in delivering the conservation measures set out within EDPs. Through the NRF, the government is looking to strengthen and grow a clear, predictable market for nature recovery and nature services. Natural England will ensure conservation measures are delivered through a combination of direct delivery and fair and open competition. This will be in line with all applicable public sector rules around transparency and equal treatment of suppliers. You can learn more about how NRF delivery will impact suppliers on this Defra Environment Blog.

Restoring nature for communities 

Natural England will seek to enhance public access to nature through EDPs wherever possible. This will create more opportunities for people to experience and enjoy created and restored landscapes. 

Closely monitoring impact

Natural England will monitor and evaluate both the effectiveness of individual conservation measures and the overall impact of EDPs. This will ensure that there is an overall improvement in the conservation status of the protected site and/or species, and the overall improvement test is therefore met.

Secondary legislation 

The core legal framework to deliver the NRF is contained within the Planning and Infrastructure Act. However, the government is required by the Act to make secondary legislation (in the form of regulations) to add further detail to some provisions and to give full effect to the Act’s measures. This includes: 

• levy regulations – these will set out how the levy (a charge paid by developers) will operate and how charging schedules will work for each EDP.

• prioritisation regulations – these will set out the appropriate prioritisation of the different ways of addressing a negative effect of development on a protected species, or on a protected feature of a protected site. 

The plan for EDPs

The NRF allows the government to take a phased approach to developing and making EDPs. Government’s plan for the first EDPs is to focus on environmental impacts where: 

• The current system is causing delays and blockages to development. 
• There is a robust evidence base supporting the benefits of a strategic approach for nature.
• Natural England have a wealth of existing expertise so EDPs can be delivered at pace. 

On this basis, the first EDPs will cover nutrient pollution.

Nutrient pollution

This government made a commitment that it would ‘implement solutions to unblock the building of homes affected by nutrient neutrality without weakening environmental protections’. Nutrient pollution is a significant environmental issue for many of our most important places for nature in England. In freshwater habitats and estuaries, increased levels of nutrients (especially nitrogen and phosphorus) can speed up the growth of certain plants and algae, impacting wildlife. As a result, residential developments have been required to achieve ‘nutrient neutrality’ where protected sites are in unfavourable condition due to excess nutrients. While this has provided important protection of these sites, it has also had a significant impact on the scale and speed of development in these areas, affecting approximately 16,500 homes per year.

To address this issue and deliver our manifesto commitment, the first EDPs will cover developers’ obligations related to nutrient neutrality. Natural England are currently exploring the benefits of developing EDPs for the following catchments where there is significant pressure from development: 

• Peak District Dales 
• Poole Harbour 
• River Avon 
• River Axe 
• River Camel 
• River Clun 
• River Eden 
• River Kent 
• River Lambourne 
• River Lugg 
• River Mease 
• Solent (including River Itchen) 
• Somerset Levels and Moors 
• Stodmarsh 
• Teesmouth and Cleveland Coast 
• The Broads (including River Wensum) 

Natural England’s existing Nutrient Mitigation Scheme will transition to the relevant EDP when it becomes available. However, existing third-party led mitigation schemes can continue to sell nutrient credits directly to developers. Developers may also continue to propose bespoke mitigation plans under the existing regulatory system. 

Whether local authority nutrient mitigation schemes continue will depend on specific circumstances. Some may choose to fully transition to the EDP where available, while others may continue to operate within the existing system alongside EDPs. Natural England is working with affected local authorities to establish the most appropriate arrangements for their area. 

The Government has committed to returning to Parliament once the first nutrient EDPs are made to issue a statement on the initial learnings from their development and implementation. It will only be after the House has seen this statement that a Secretary of State will make any further EDPs on other environmental issues. 

Plans for future EDPs

The NRF is a huge opportunity to reframe the relationship between development and the environment. The government’s ambition is to expand it over time, introducing EDPs to cover other protected species and habitats.

As set out in the Planning and Infrastructure Act, Natural England will only make EDPs where there is robust evidence to support a strategic approach and where they have confidence that conservation measures will deliver a material improvement for nature. The government intends to prioritise EDPs based on an assessment of where requirements related to protected species and habitats have the greatest impact on development.

Natural England will work closely with local authorities, developers, environmental groups and other stakeholders to gather and assess the data needed to underpin each EDP.

District Level Licensing

Great crested newt populations have declined dramatically over the last 60 years, despite being protected under UK and EU law. District Level Licensing (DLL), introduced in 2016, has helped reverse this trend. It has shifted the focus of investment so that over 80% of funding now goes into creating and restoring ponds, and monitoring and maintaining them for 25 years.

Through utilising the robust DLL evidence base, Natural England will start preparatory work for great crested newts on how best the strategic approach taken under DLL could be transferred into the NRF. This could help DLL secure the benefits of streamlining processes and introducing a digital service. We will also build on the lessons presented to Parliament on the first nutrient pollution EDPs before any future EDPs are made.

Further detail on plans for potential great crested newt EDPs will be shared in due course.

Implementation timeline

Winter 2025

Launch pre-market engagement with private sector, nature recovery and nature services providers. Begin stakeholder engagement on the first EDPs. Develop secondary legislation to support implementing the NRF, including for the design of the levy.

Spring and Summer 2026

User test the NRF digital service. Draft guidance for NRF service users, private sector providers and regulators. Lay secondary legislation for the nature restoration levy before Parliament. Begin formal consultation on first nutrient pollution EDPs. Publish guidance and provide support and skills training for Local Planning Authorities and developers. The first EDPs will go live when the above steps are complete, consultations have been carried out, and the Secretary of State has approved those EDPs.