1011: How cleaning up our rivers might be linked to infrastructure costs

Today’s entry looks at the proposed reforms to nutrient neutrality and trends in the costs for delivering infrastructure.

Polluted discourse

Nutrient neutrality is an issue relevant to both conventional and infrastructure planning. The issue of nutrient neutrality reforms, like most others, is about trade-offs rather than malicious attempts to harm the environment. It’s been quite disappointing to see the discourse on it, although perhaps some relief is provided by the clear acknowledgement that some organisations have fallen short.

What exactly is the nutrient neutrality issue? The crux of the challenge is that, as it stands, only 14% of rivers in England can currently claim to have ‘good ecological status,’ and only 45% of rivers are currently achieving a good status in terms of phosphorus. The concept of nutrient neutrality aims to ensure that any increase in pollution is offset by a reduction in pollution in the same area (this often means development is subject to, for example, the use of particular drainage systems or the creation of new wetlands or woodlands to capture nutrient pollution).

What is the cause of our polluted water bodies? It is important to recognise that new housing development is not the cause of these pre-existing issues. 76% of the drivers for water bodies not achieving ‘good status’ are agricultural production (40%), and sewage and waste water issues (36%). The contribution of new homes specifically is, probably correctly, said to be ‘very small’ by the Government. Only 18% is caused by ‘run-off from towns, cities, and transport,’ referred to as urban diffuse pollution but even this figure includes a much wider array of things, such as highways but also wet wipes. Did you know that an analysis of 260,000 blockages on the public sewer network across the country suggests that 40% of pollution incidents in that network were caused by blockages, and almost 60% of these incidents are caused by wet wipes. For the good of our country, I implore you to please stop using them.

Why does any of this matter? In short, this state of affairs has meant that Natural England have recommended that development, particularly housing, cannot be permitted because the water quality issues are so severe that development will ‘break the camel’s back’ of water quality. This has led to a significant impediment to the delivery of new homes and development. In 2021, it meant that only 27 homes were granted permission in Fareham, with 8,770 homes held up at the application stage. This isn’t just a one-off, extreme case: Savills estimate it could lead to up to a 50% drop in house building; the House Builders Federation estimates the nutrient neutrality issue has led to 160,000 homes being blocked; and the Government itself has suggested the reforms could unlock 100,000 homes.

Natural England started by issuing the guidance in question for the Solent, and the issue has subsequently spread to over 70 local authorities. This is because under the Habitats Regulations, local planning authorities and other decision-makers must assess the environmental impact of projects and plans (such as planning applications or local plans) which affect protected sites. Local planning authorities can only approve a project if they are sufficiently certain it will have no negative effect on the site’s condition. Given the state of the waterways, Natural England’s advice suggests that, as these sites are in unfavourable condition due to excess nutrient pollution, projects and plans may only go ahead if the increase in wastewater that is produced by the assumed population increases, from developments will not cause additional pollution.

The Government seeks to implement mitigation for this issue at a ‘strategic’ level (in area, and/or cross-sectoral reach) so that the mitigation can be banked (and considered to be ‘secure’) without preventing development from proceeding. This is already happening to some extent, Natural England themselves have released quasi-boastful press releases about using this form of strategic compensation. There are provisions in the Energy Bill which seek to do the same for offshore wind.

So why the controversy? The government have tabled amendments to the Levelling Up and Regeneration Bill which mean that ‘when making the decision, the competent authority must assume that nutrients in urban waste water from the proposed development, whether alone or in combination with other factors, will not adversely affect the relevant site [for the purposes of a Habitats Regulations assessment].’ In effect, we are creating a carve out of the existing Habitats Regulations requirements that nutrient neutrality be secured on a development-by-development basis by relying at this juncture area-wide and cross-sectoral measures being implemented.

Ignoring the spurious accusations about ‘lying’ (now withdrawn by the RSPB) the claim from environmental groups, including the Office of Environmental Protection, is that this lowers the level of environmental protection in place. The government’s case is that they have a long list of measures which will be implemented so that the targets for water quality across the country will be met. This includes reducing nutrient run off into our rivers from farms (ie, the primary cause of this all) by supporting farmers with £200 million in grants for improved slurry storage infrastructure and precision spreading equipment, as well as imposing new duties on water companies.

Simon Ricketts, who provides a thoughtful rather than alarmist take on the Government’s approach, endorsing them but also asking ‘if these commitments are solid enough to be relied upon, why can’t they just be taken into account in determining that there will not be an adverse effect on the integrity of the relevant protected area?’ I think the point here is to ask ourselves: do we care about the maintaining the existing process, or the outcomes? If we care about the process, Simon’s question is right: developers currently have to show the mitigation is in place and secured at the point of the decision on their development.

If we care about the outcome (making sure quality in water bodies is improved), then the answer is simply that we’re varying the rules to help with the sequencing of development without changing the outcome. In truth, given the primary sources of pollutants are not new development but agricultural, the urgency of needing new housing, and given that the Government’s proposed area-wide and cross-sectoral measures, my own personal view is that these reforms seem like a prudent attempt to balance the countervailing considerations. In other words, in my view, there is unlikely to be a significant deterioration as a result of these reforms, and we’re suffering from a lot of social costs in maintaining the current system. Enabling strategic compensation is likely to reverse some of the trends we are about to discuss in the next section.

Infrastructure costs

The Financial Times this week reported on infrastructure costs. It doesn’t make for particularly happy reading. The data suggest that after adjusting for inflation, we found that tram projects in Britain are two and a half times more expensive than French projects on a per mile basis.

One thing that got my goat was the commentary on this costs analysis – and I’m trying to be polite here given I’ve just noted unsavoury public discourse above – including the frankly bizarre and ahistorical suggestions from one tweeter (should we call them X-ers now?) that the rising costs were attributable to ‘the common law’.

The Tweeter’s suggestion is based on a fundamentally flawed analysis of both Parliamentary sovereignty and its interaction with the common law. Apparently, the ‘common law’ cannot be overridden by Parliament and that is why the level of control over planning cannot be removed. Even ignoring that this idea is completely wrong as a matter of UK constitutional theory (AV Dicey would be turning in his grave, and even the source cited – which represents the looser end of theories on Parliamentary sovereignty – doesn’t support the claim), the most ‘entrenched’ positions of the common law do not extend to planning and environmental legislation, which is likely to be a cause of many of our delays and increased costs. But nor does such an explanation explain the trends of infrastructure costs over time.

So how does the common law apparently prevent infrastructure delivery? Who knows. Not to toot my own horn, but I like to think that, having worked in the infrastructure planning and public law realm for some time, that I know what a wide range of parties think the issues in planning sphere are. Never has any serious person that I am aware of suggested that the ‘common law’ is responsible for the delays or costs related to infrastructure delivery. Rather than grand claims about the ‘common law’, one avenue might be judicial review, but for reasons we’ve previously explained, whilst the effect is significant, it is not an insurmountable issue, and there are ways and means of reforming which would not suddenly turn us into a civilian law system (for completeness, Parliament and Government is able to pass these reforms).

It’s worth noting that there is a general academic literature suggesting that common law systems incentivise legal challenges – that is very distinct from the claim being made here (ie, the bizarre claim that Parliament cannot override or modify the ‘common law’). In any event, in the infrastructure sphere, you can make the case for reforms without having to upend our common law tradition – a lot of the proceduralism that can be utilised in a common law system needs to have a piece of legislation or institution to ‘bite’. That is precisely why the best kinds of reform seek to amend or modify those things – and there is a lot of low hanging fruit in that context.