The government’s plan is intended to allow developers to pay into a fund instead of directly delivering mitigation works. Sophie Henwood looks at its chances of success and finds it is anything but straightforward
The government’s Nature Restoration Fund is intended to simplify a planning system often criticised as complex and slow. By allowing developers to pay into a centralised fund instead of delivering certain environmental mitigation works themselves, the scheme is framed as a way to accelerate housebuilding while improving environmental outcomes. The reality, particularly in its early stages, is more nuanced.
A key question for developers is whether the fund will meaningfully reduce delay. In principle, removing the need to design and negotiate on site or bespoke offsite mitigation should save time.
Developers who secure planning permission must comply with a number of provisions. These include any planning conditions attached to the permission, which detail how the development is to be carried out; any section 106 agreement, which can contain long-term positive obligations and off-site works; and the Community Infrastructure Levy, where adopted, which is a fixed contribution on additional floor space. It is important to remember that planning conditions and section 106 agreements often include environmental mitigation.
The scheme is framed as a way to accelerate housebuilding while improving environmental outcomes. The reality, particularly in its early stages, is more nuanced
The extent of any time saving will depend on the fund’s scope. At launch, it is expected to focus primarily on nutrient neutrality. For developers grappling with these constraints, particularly in affected catchments, the ability to discharge obligations through a financial contribution may be attractive. It could replace negotiations over mitigation design with a more straightforward payment.
For most developments, however, the impact is likely to be limited. Eligibility depends on a relevant environmental delivery plan covering the site, development type and specific environmental issue. In areas where no such plan exists, developers will remain reliant on traditional approaches. The voluntary nature of the scheme adds further uncertainty, as developers will weigh cost against delivering works themselves.
As a result, while the fund may offer some streamlining, it is unlikely to represent a universal time-saving initially.
A second question is whether Natural England can deliver the large-scale, coordinated projects that underpin the fund’s rationale. The logic of a centralised approach is compelling. Pooling contributions from multiple developments should enable mitigation to be delivered at landscape scale, rather than through fragmented site by site solutions. This has the potential to produce better ecological outcomes.
The challenge lies in delivery. Natural England will be responsible for designing and implementing Environmental Delivery Plans, securing suitable land and ensuring mitigation achieves the required outcomes over the long term. This represents a significant expansion of its role. Delivering complex, large scale projects requires not only ecological expertise, but also commercial capability, project management capacity and the ability to engage effectively with landowners and other stakeholders. The success of the Fund will depend heavily on resourcing, and delays could undermine confidence.
If adequately resourced, Natural England is well placed to take a strategic view and coordinate interventions across sites. This could lead to more coherent mitigation than the current patchwork of site specific measures. The Fund’s success will turn on execution.
The third issue is the attractiveness of the scheme to estates and landowners. The Fund will require land for mitigation, creating a potential revenue stream for those with suitable sites. This aligns with a broader trend of diversifying away from traditional agricultural uses towards environmental and alternative income sources, including biodiversity net gain, carbon markets and renewable energy.
For some estates, participation will be appealing. Long term agreements may provide relatively stable income and complement existing land uses.
Financial considerations will be key. Landowners will need clarity on payment structures, duration and ongoing obligations. Constraints on future use will need to be factored in. In addition, the interaction with existing regimes, such as agricultural tenancies or environmental schemes, may add complexity.
The fund has the potential to reduce delays in certain cases and deliver environmental benefits at scale. However…its impact will likely be gradual
Tax considerations may also play a role. With increasing pressure on estates to generate income, particularly following inheritance tax changes, new revenue opportunities will be scrutinised closely.
Ultimately, the scheme’s desirability will vary. For some landowners it may offer a viable opportunity. For others, particularly where land is committed to alternative uses or flexibility is a priority, the appeal may be more limited.
In its current form, the Nature Restoration Fund has the potential to reduce delays in certain cases and deliver environmental benefits at scale. However, its limited scope and reliance on developer and landowner participation mean its impact will likely be gradual. Its success will depend on expansion, effective delivery and clear value to participants.
Sophie Henwood is a commercial real estate partner at Boodle Hatfield
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