There have now been a number of cases in which statutory requirements for Nutrient Neutrality under the Habitat Regulations have held up development. Examples include Wyatt, R v Fareham Borough Council (2022), C G Fry & Sons v Secretary of State for Levelling Up Housing and Communities (2024), and Ward & Anor v Secretary of State for Housing, Communities and Local Government (2024). The decisions made in these cases often vary, causing uncertainty for the various parties involved, in particular private landowners looking to generate and sell their own nutrient credits. We look at one of the most recent cases, the Kilnwood Vale development, to see what insights can be gained.
The Kilnwood Vale case refers to the development of 280 dwellings in Horsham, in the Arun Valley SPA, SAC, and Ramsar site. Natural England stated in 2021 that ‘it cannot, with certainty, conclude that Southern Water’s abstraction in the area was not having an adverse effect on the integrity of these protected habitats.’ Therefore, whilst Horsham is not in one of Natural England’s designated Nutrient Neutrality catchments, the Local Planning Authority decided that reserved matters approval would be subject to ‘Grampian’ conditions to allow the developer to provide a favourable assessment under Regulation 63 of the Habitat Regulations. This decision was appealed by the developer who argued that ‘a Grampian condition would fail the test of necessity as there is no need for the development to demonstrate water neutrality to conclude a favourable appropriate assessment.’ Ultimately the inspector concluded that reserved matters approval would be subject to a Grampian condition securing water neutrality. This decision was agreed by the Secretary of State on 25th October 2024.
The basis of the developer’s argument largely rests on the principle that the actions of other regulatory regimes, including the Environment Agency and Southern Water, to mitigate nutrient pollution should cover or incorporate any adverse effects of development. Planning guidance sets out that planning for water supply would typically be addressed though strategic policies. Water Resources Management Plans (WRMP) produced by water companies should reflect planned growth. The implications of this being that responsibility for water neutrality does not rest on the developer. This principle has been maintained in cases such as Huntingdon Road and Cambridge North, in which responsibility was placed on Cambridge Water to address any adverse effects of development in their WRMP.
These examples were focussed on water abstraction, in the case of the Kilnwood Vale development, as well as cases such as the Lower Broadridge Farm and Storrington developments, which are primarily concerned with nutrient pollution, underlying strategic policies have not been deemed sufficient to allow the progression of developments. This ruling bodes well for private landowners looking to create nutrient credits on their own land as developments will require these nutrient credits to gain planning permission. Furthering this point, for both the Lower Broadbridge Farm and Storrington development it was decided that the Sussex North Offsetting Water Scheme (SNOWS) need only be used in the absence of a bespoke water neutrality solution. The inspector has applied this decision to the Kilnwood Vale development which previously mandated the use of SNOWS exclusively. In terms of demand for offsite nutrient credits, this is another positive ruling for landowners looking to produce offsite nutrient credits because bespoke nutrient solutions have been prioritized over the council’s scheme and still remain an option for developers.
Unfortunately, this issue still lacks clarity. It appears from the inspector’s report that a large reason behind the decision to not rely on Southern Water’s WRMP and SNOWS is their status as drafts. With expected changes to the WRMP the inspector decided that it could not necessarily be relied upon to mitigate the adverse effects of the Kilnwood Vale development. Similarly, with SNOWS being in a draft form it was considered as unreasonable to require a developer to use exclusively this service. The implication of this detail being that if the WRMP and SNOWS were completed, they would be considered adequate mitigation for nutrient pollution, thereby eliminating the demand for offsite nutrient credits.
Lastly, this case also provides an update on the subjection to Grampian conditions. Previously, in cases such as Lower Broadbridge Farm, Storrington, and the original conditions imposed upon the Kilnwood Vale, Grampian conditions were imposed upon development. Development could not commence until nutrient mitigation has been confirmed. The inspector suggested that Grampian conditions should instead be imposed upon occupation of the dwelling, with it being the occupation not the development itself which typically contributes adversely to nutrient pollution. This allows developers to progress a little further than previously allowed and could potentially benefit offsite nutrient credit providers. With Grampian conditions imposed upon development, a developer is more likely to abandon the development entirely. Imposing Grampian conditions upon occupation, allows the developer to commit to the project, and by extension the need for nutrient credits. This is again dependent on the uncertain principle that developers will need to offset nutrient pollution themselves, and that developments will not be covered by underlying strategy from water companies.
To conclude, the Kilnwood Vale development case has provided further insight into the tricky interplay between development and nutrient neutrality. The case has highlighted a key area of uncertainty. Does the underlying strategy of water companies absolve developers from their own need to mitigate nutrient pollution? This question is pivotal for landowners who may be interested in producing their own offsite nutrient credits because the demand for nutrient credits hinges upon its answer. Similarly, whilst this case also provides an update on Grampian conditions, the impact of this change rests upon the same key question. The development of case law following the imminent completion of Southern Waters WRMP should hopefully provide clarity on this matter and should be watched carefully.