Environmental Delivery Plans: the risks developers need to weigh up

The government has published its first draft Environmental Delivery Plan (EDP): the first live test of a wholesale reshaping of how environmental impacts from development could be dealt with in England.

Where an EDP applies, developers will no longer have to secure project-specific mitigation for the environmental impact covered by the plan. Instead, they pay a Nature Restoration Levy and Natural England takes responsibility for the conservation measures. Simpler, more strategic, fewer blockers and greater certainty. Supposedly.

The first draft covers nutrient pollution in Norfolk. It proposes a flat £2,675 levy per home and capacity for up to 15,780 homes. Natural England intends to prepare 16 nutrient EDPs across England, plus seven for great crested newts, and the government is exploring applications beyond housing, specifically nuclear infrastructure.

So this draft is a big deal. And it raises big questions the industry should be asking now.

First: how certain is the certainty? Every EDP has a finite amount of development it can accommodate. Government guidance says obtaining a levy quote does not reserve capacity and if there is not enough capacity left for a development, Natural England will not issue one.

For most EDPs using the levy is expected to be optional. If developers cannot or choose not to use it, they can still secure mitigation through the existing system.

On paper, that provides a fallback, but what will that fallback look like if a cheaper state-run levy has discouraged private mitigation schemes from coming forward? A developer could make land, viability and programme assumptions based on access to the EDP, find that capacity gone by the time the scheme is ready, then return to a private market with less supply than exists today.

There is legal uncertainty too as EDPs can be challenged by judicial review. If the underlying plan or its success is challenged, developments relying on it could face delay.

Second: what are developers paying for? Under the existing nutrient neutrality system, a development’s nutrient impact is quantified and mitigation secured against it. The EDP instead applies an ‘overall improvement test’ – a wider package of conservation measures must materially outweigh the negative effects of development by the end of the plan.

In Norfolk, that package includes wetland creation and restoration, land use change, habitat management and deer management. The draft acknowledges that there will be an increase in nutrient pollution in some sensitive systems.

So the test is no longer simply whether the pollution caused by development has been neutralised. It is whether the wider package is judged to produce an overall – potentially totally unrelated – improvement.

Third: the pollution and the solution may run on different timetables. Internal Defra correspondence obtained by Greenshank indicates an expected one-to-two-year gap between developments entering the Nature Restoration Fund and the corresponding levy income arriving.

But EDPs are not replacing a vacuum: we already have a functioning nutrient mitigation system. Nutrient loads are calculated; credits represent quantified reductions in nitrogen or phosphorus; mitigation must be tied to the affected catchment; and landowners enter legally binding long-term agreements to maintain it.

The private market has grown around those requirements, with increasing supply and competition bringing costs down and giving developers more options. 

Yet we are aware of at least seven proposed nature restoration schemes in Norfolk that have been put on ice because of uncertainty around EDPs. Those schemes could have increased the supply of mitigation and helped unlock housing through the system that already exists. There is a real irony in destabilising a market that is beginning to do the very thing EDPs are supposed to achieve.

Strategic delivery at scale is a sensible ambition. But replacing a maturing market only makes sense if the replacement gives developers at least as much certainty over price, capacity and delivery – and gives nature at least as much certainty over the outcome.

The Norfolk consultation closes on 27 October. Developers are explicitly being asked for their views. If this is the system the industry may increasingly be expected to rely on, now is the time to test it properly.

Kim Connor-Streich is chief commercial officer at Greenshank Environmental