Nutrient neutrality: update

On 13 September 2023, the House of Lords voted against government proposals intended to unlock 100,000 homes between now and 2030 whilst protecting and improving the environment.

Applies to England

The government’s reforms would have provided the certainty for which local authorities, communities and developers have been calling, by making a targeted and specific change to the law so that there was absolute clarity housing development could proceed in areas currently affected by nutrient neutrality. At the same time, the government had set out a wider environmental package aimed at tackling the underlying sources of nutrient pollution, restoring nature, and supporting our commitment to leave our environment in a better state than we found it. 

Taken together, these reforms would have benefited communities and the environment. They would have allowed for the delivery of more than 100,000 new homes. Unfortunately, despite strong support from local authorities and house builders, the necessary amendments to the Levelling-up and Regeneration Bill was blocked by the opposition  in the House of Lords and do not form part of the Levelling-up and Regeneration Act - perpetuating uncertainty and further delaying much needed homes. 

The government recognises that developers, local planning authorities, and nutrient mitigation providers need certainty now to make progress on planning consents and to unlock homes. The government will now focus on making rapid progress in unlocking home. In order to meet our manifesto commitment to build 1 million homes over this Parliament, and since 2010, over 2.5 million new homes have been delivered and millions of people have moved into home ownership.

In the immediate term, Natural England will continue to deliver the £30 million Nutrient Mitigation Scheme  in line with the Environment Secretary’s direction of 28 July 2022. Nutrient mitigation credits for 4,200 new homes have already been provided by the Nutrient Mitigation Scheme in the Tees and Cleveland Coast catchment. Further credits in the Tees, and an expansion of the Nutrient Mitigation Scheme to other catchments affected by nutrient neutrality, will proceed in the coming months. The Nutrient Mitigation Scheme will continue to operate on the principle of complementing locally and privately led mitigation schemes, rather than crowding out these valuable schemes, to maximise total mitigation provision.

Natural England will also continue to provide advice and guidance to other scheme operators, helping to secure and grow the potential pipeline of credits.  

To boost the supply of mitigation, the £110 million Local Nutrient Mitigation Fund will enable local authorities to boost the supply of mitigation, by investing in innovative mitigation schemes and enabling additional mitigation credits. This will enable local authorities to boost the supply of mitigation, by investing in innovative mitigation schemes and enabling additional mitigation credits. The funding will be recycled locally until nutrient mitigation is no longer needed, at which point it will be invested in measures to help restore the relevant Habitats Sites. This will enable sustainable development, unlocking stalled housing delivery, whilst delivering secondary benefits like enhanced public access to nature and supporting our commitment to leave our environment in a better state than we found it.

As part of the Local Nutrient Mitigation Fund, DLUHC has confirmed:  

  • the first tranche of capital funding with up-to £57 million of funding to the 8 successful bids
  • a second round of Nutrient Support Funding with another £100,000 to a lead authority for substantive catchments (those over 10k hectares in size)
  • round 2 of the Local Nutrient Mitigation Fund is open to Expressions of Interest until 26 April 2024

Find further information on the successful bids for the first round of the Local Nutrient Mitigation Fund.

Find further information on the Local Nutrient Mitigation Fund – Round 2.

To address pollution at source, the Levelling-up and Regeneration Act 2023 created a new duty for water companies in designated catchments, to ensure wastewater treatment works serving a population equivalent over 2,000 meet specified nutrient removal standards. Competent authorities (including local planning authorities) considering planning proposals for development draining via a sewer to a wastewater treatment works subject to the upgrade duty are required to consider that the nutrient pollution standard will be met by the upgrade date for the purposes of Habitats Regulations Assessments.  

On 25 January 2024, the Secretary of State for the Environment, Food and Rural Affairs designated 16 catchments in which water companies are required to upgrade wastewater treatment works before 1 April 2030. Further information can be found in the Notice of designation of sensitive catchment areas 2024

A limited exemption process will be completed by 1 April 2024, when wastewater treatment works exemptions will be confirmed, which may affect the levels of nutrient mitigation that development must secure when connecting to specific wastewater treatment works in some catchments. It is important that planning decisions continue to be taken based on material planning considerations.

Finally by way of immediate measures, the government remains committed to tackling nutrient pollution at source and can confirm that the following measures all remain government policy and will be progressed:  

  • exploring further work on developing Protected Sites Strategies in nutrient neutrality catchments, where these can help deliver site restoration and unlock housing delivery
  • investing £200 million in grants for improved slurry storage infrastructure and equipment over the agricultural transition period
  • committing £25 million to a new nutrient management theme within the Farming Innovation Programme, to help farmers manage plant and soil nutrients,
  • consulting early next year on modernising fertiliser product standards to support increased use of organic and recycled nutrients
  • introducing payment premiums into environmental land management schemes in 2024. This will accelerate take up of certain high priority options, including those that provide benefits for water quality
  • continuing to conduct at least 4,000 risk-based inspections on farms each year - making sure that slurry and other pollutants are being handled in a way that minimises pollution of the water environment
  • consulting on mandating Sustainable Drainage Solutions for relevant new developments, subject to a threshold. This will reduce urban run-off and so reduce pressure on storm overflows as well as flood risk
  • Defra launched an additional round of the Natural Environment Investment Readiness Fund, which opened for applications on 11 December, to help farmers address barriers to accessing private investment to help nature’s recovery - including through nutrient mitigation projects

These measures will make a difference but may not be sufficient to unblock all of the housing blocked by nutrient neutrality, certainly not at the speed these homes are needed by local communities. Primary legislation is the only way to quickly unblock the building of homes affected by nutrient neutrality. The House of Lords voted down that legislation. The government is therefore determined to do more, working with Natural England, developers, local planning authorities, and others to explore and develop further measures - within the existing legal framework - which can unlock homes as fast as possible, while improving the water environment.

Published 20 September 2023
Last updated 6 March 2024 + show all updates
  1. Added link to Local Nutrient Mitigation Fund – Round 2.

  2. Amended following the designation of sensitive catchment areas under the Water Industry Act 1991 by the Secretary of State.

  3. Amended to update that the government will not be pursuing further primary legislative measures and outlining the measures the government is taking to tackle nutrient pollution at source.

  4. First published.