What is the “Nature Restoration Fund”?
The Planning and Infrastructure Bill was published at the beginning of March 2025, and had its second reading on 24 March 2025. The Bill is available here: Planning and Infrastructure Bill
Part 3 of the Bill relates to “Development and Nature Recovery”, and provides for a significant change in terms of how developers can discharge their environmental obligations. The Bill establishes two new mechanisms:
1. Environmental Delivery Plans; and
2. A Nature Restoration Levy. This levy will be paid by developers to create the Nature Restoration Fund.
The intention is that, where Environmental Delivery Plans are published (and currently the intention is that responsibility to deliver these plans will sit with Natural England, although it will be the Secretary of State who gives the plans legal effect), developers will be able to discharge their environmental obligations “more efficiently” and have the option to pay a levy into a central fund (the Nature Restoration Fund). The payment into this fund will remove the requirement to obtain separate protected site/SSSI consent or a protected species or badger licence, and would also disregard the current requirements under the Habitats Regulations for an appropriate assessment to be undertaken.
The requirement to deliver biodiversity net gain (“BNG”) is not, however, impacted by the Bill. There will still be a requirement on developers to deliver onsite or offsite BNG, or purchase statutory credits, to discharge their BNG obligation.
Why has the Nature Restoration Fund been introduced?
The Government’s position is that “Sustained economic growth is the number one mission of this government, but this cannot come at the expense of our natural environment…”.
The Government has further expressed that the current protections and existing approaches to habitat and species protection:
- have not been able to reverse the trend of environmental decline; and
- act as “significant barriers” to building homes and infrastructure.
The environmental provisions in the Bill have received a very mixed response from different stakeholders and bodies that may be impacted by these proposed new arrangements. Whilst it is beyond the scope of this article to focus in on the merits (or otherwise) of these new arrangements, there are very strong views being expressed which could lead to changes as the Bill progresses.
It is also important to recognise that the proposed provisions are a significant change in how the environmental and natural world may be protected from development, and introduces a “two tier” approach nationally:
- Where Environmental Delivery Plans are not published and are not in place, the existing framework (of Habitats Regulations assessments, SSSI consent and species licensing) will remain;
- Where Environmental Delivery Plans are published, there will be a Nature Restoration Levy that can be paid (and in some cases, may be mandated to be paid) in place of the existing requirements.
What does the Nature Restoration Fund mean for public bodies?
If the Bill receives Royal Assent in its current form (or largely its current form), the creation of the Nature Restoration Fund will have a significant impact on a range of public bodies.
No change to BNG
Firstly, as noted above, the statutory BNG obligations now contained within the Town and Country Planning Act 1990 (by virtue of the Environment Act 2021) are not affected. Therefore, for local planning authorities, there is no change on their duties and requirements to ensure BNG is delivered through the planning regime.
Legal, resource and operational changes
There will be change, however, for local planning authorities dealing with developments in areas where Environmental Delivery Plans have been published by Natural England and where developers can pay into the Nature Restoration Fund. Further detailed secondary legislation is required to understand all of the detail in terms of how decision making, and processes, will work, but the on the face of it the disapplication of provisions in the Habitats Regulations 2017 will mean that where an Environmental Delivery Plan has been published and a developer has paid the required levy into the Nature Restoration Fund, existing requirements to undertake (and consult on) appropriate assessments as part of the planning process fall away.
On a practical and operational level, these new provisions will also significantly impact on local planning authorities, as they will need to be resourced and have structures, governance and Officers in place to accommodate both the “current” requirements and the “new” requirements, to include consideration of, and input into, proposals for Environmental Delivery Plans affecting their areas. Where no Environmental Delivery Plan is in place, the existing framework will continue to be relied on to protect the environment and nature otherwise impacted by development.
When considering Environmental Delivery Plans, it should also be noted that these cannot remain in place for longer than 10 years. Whilst ecologically this is arguably a positive to ensure updated data and the best available ecological evidence can guide plans for sites over time, this will impact local planning authorities especially in terms of long-term planning and resourcing.
The intention very clearly is that, notwithstanding the complexity and introduction of a new regime to be resourced and accommodated, benefits will also be enjoyed by local authorities as housing and infrastructure projects will be able to proceed more efficiently, and existing site specific hurdles – such as requirements around nutrient neutrality – will be removed. Indeed, the Bill’s explanatory memorandum uses nutrient neutrality as a case study example to illustrate how the proposed changes could be beneficial: 240196en.pdf. Therefore, for those local authorities currently seeking to secure a supply of nutrient mitigation to allow housebuilding to move forwards, the Nature Restoration Fund could enable development to proceed more readily.
The Bill clearly has significant impacts for Natural England – as drafted, the Bill gives Natural England new and significant duties to prepare, monitor and report on Environmental Delivery Plans, as well as potentially acquiring land if such land is required for purposes linked to a conservation measure in an Environmental Delivery Plan; also being responsible to use the Nature Restoration Levy to secure environmental improvement. The Bill is silent on how additional resources and funds will be made available to the organisation to deliver these additional duties in addition to its existing duties and powers.
The local environmental impact on local authorities and public bodies does also need to be recognised – with Natural England having responsibility to “spend” the Nature Restoration Fund, and the intention being that the fund will deliver more strategic nature recovery, there is a question around how this will impact local nature recovery and the voice that local decision makers may have in this process. Whilst the Bill does provide a framework whereby payments into the Nature Restoration Fund will fund the conservation measures set out in the relevant Environmental Delivery Plan, detailed secondary legislation is required to understand the complete picture.
Finally, public bodies planning their own developments or capital projects will directly be impacted by these new proposals in the event works are planned in areas where an Environmental Delivery Plan is in place.
We specialise in nature conservation and environment law, and if you have any queries on the Nature Restoration Fund or existing environmental protections, please do let us know:
Helen Gill
Principal Associate
m: +447745644575
t: +443300452435