The Nature Restoration Fund: Yet another levy on development?
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Planning reform is delivering a new route for discharging environmental obligations. Whether it feels like a time-saver or a further charge on development remains to be seen.
Spoiler alert: Potentially.
What is the Nature Restoration Fund?
Introduced as part of the Government’s planning reform agenda, the Nature Restoration Fund offers developers a new way to discharge certain environmental obligations.
Where a local Environmental Delivery Plan is in place, a developer can choose to pay into a central fund rather than deliver environmental mitigation on site. The contribution is intended to be simple and predictable, in much the same way as the Community Infrastructure Levy (CIL).
The Fund is then used to deliver conservation and restoration measures at scale. The policy ambition is clear: move away from piecemeal, site‑by‑site mitigation and towards strategic, co‑ordinated environmental interventions across a wider area.
How will it work in practice?
Nutrient pollution is the flagship first test case for the Nature Restoration Fund, but it is not the only one. Great crested newts are also part of the initial wave of Environmental Delivery Plans, running in parallel and drawing on existing strategic licensing models.
Many residential developments are currently subject to planning conditions requiring them to achieve nutrient neutrality. Faced with this, developers typically have to design, secure and implement mitigation measures themselves.
Under the new regime, where an Environmental Delivery Plan exists, developers will have a choice:
follow the traditional route and deliver nutrient neutrality themselves; or
swap that obligation for a payment into the Nature Restoration Fund.
If they choose the latter, Natural England takes responsibility for delivering the necessary conservation measures.
Is participation voluntary?
Formally, yes.
However, both Natural England and the Secretary of State have powers, in limited circumstances, to make participation mandatory. That has led to understandable industry concern about how “voluntary” the regime will be in practice.
Add to that the increasing focus by funders on environmental risk, and the concerns mount. Lenders may well prefer the perceived clarity, simplicity and risk transfer that comes with a payment into a central fund.
What are the key concerns?
At least initially, the scheme has a narrow scope. With nutrient pollution as the sole focus, its usefulness will be limited to many developments.
There are also serious questions around deliverability. Large‑scale nature recovery projects are complex, long‑term and operationally challenging. Whether Natural England, even working with partners, can consistently deliver these schemes at pace remains to be seen.
What are the opportunities for landowners?
This is where the Fund becomes more interesting.
To deliver Environmental Delivery Plans, Natural England will need access to land capable of hosting conservation and restoration measures. That creates potential opportunities for landowners to receive payments in return for accommodating environmental infrastructure.
For estates and landowners with suitable land, the Nature Restoration Fund could become a new income stream, sitting alongside more established environmental and biodiversity initiatives.
