Environmental Delivery Plans and the Nature Restoration Levy – a better way of developing for the environment and developers?

Introduction

The current much maligned regime of environmental mitigation requires developers to identify any impacts that may be caused by their development proposal and put in place site-specific mitigation measures.

The Ministerial Forward to the policy paper entitled, “Implementing the Nature Restoration Fund” dated 18 December 2025 decries the current rules around development and the environment as “sub-optimal”.  It criticises the “current approach to discharging environmental obligations [which] too often delays and deters development, placing unnecessary burdens on housebuilders and local authorities. It requires housebuilders to pay for localised and often costly mitigation measures, only to maintain the environmental status quo. By not taking a holistic view across larger geographies, mitigation measures often fail to secure the best outcomes for the environment.”

Many developers, LPA officers, environmental consultants and other stakeholders would nod sagely at the government’s observations – they surely would all agree that the current approach requires reform.  Site specific measures may mitigate a development’s environmental impacts, but there is no betterment and certainly site specific mitigation lacks strategic, joined up thinking as that is not built in to the regime.  Often, developers are unfairly criticised for producing assessments and reports that contain suspect conclusions in order to produce desired outcomes or for implementing insufficient mitigation. Developers often observe that the localised mitigation measures that they are required to implement serve very little useful purpose in protecting the environment and are disproportionate in terms of time and cost given the desired outcome. There are, of course, always those who would disagree with this sentiment.

In an effort to help overcome the above issues – and to help achieve the Government’s ambition of building 1.5 million homes by the end of this Parliament – the Government has, by Part 3 of the Planning and Infrastructure Act 2025, enacted 18 December 2025, introduced (in England only) Environment Delivery Plans (EDPs) and the Nature Restoration Levy (the Levy).

Nature Restoration Levy – a pot of (environmental) gold?

The Nature Restoration Fund (NRF), into which the Levy payments are to be paid, is heralded in the policy paper as “facilitating a more strategic approach to the discharge of environmental obligations, leveraging economies of scale and reducing the need for costly project-level assessments, it will streamline the delivery of new homes and infrastructure and result in improved environmental outcomes, delivered more efficiently”.

The premise, therefore, is a very simple one: pool Levy payments to create a fund that then may be used to implement a greater range of already identified nature conservation measures.

EDPs – a plan like no other..?

The EDP, therefore, is a key document in this regime change interlinking with NRL/NRF. EDPs, to be prepared by Natural England for the Secretary of State to approve and make, will define the environmental feature(s) covered by the EDP (such as a protected species or site), detail the geographical area that the EDP covers, define the types of development that are subject to the EDP, identify the likely negative effects on the environment by development, detail the conservation measures required to be undertaken, set the Levy amount payable into the NRF by developers and detail the environmental obligations that may be discharged or modified if developer pays the Levy.

With an EDP in place, a developer, in theory, would no longer need to produce environment assessments and reports as they do now as those matters would be covered by the EDP. Nor would they have to identify or negotiate (as the case may be) suitable mitigation measure as they would already be identified by the EDP.

All the developer would have to do would be to sign up to be bound by the EDP and pay the Levy.  That is the theory…and in some cases, the EDPs are mandatory, leaving developers with no choice but to be bound.

And now for the small print

As an idea, the NRF/EDP concept is an attractive one – the positives for all stakeholders are clear: developers would no longer have to carry out site specific assessments, developers would no longer despair having found bats, great crested newts and slow worms on the development site, LPA officers would no longer despair at having to embroil themselves in environmental matters in which they lack the requisite expertise, there would be no more delay in haggling over the most suitable mitigation measure, development would be speedier, and there would be no more £100 million pound bat tunnels in the future.  In addition, strategic and well thought out nature restoration measures may be implemented at less cost but achieving greater, positive environmental impacts.

However, it is important to note that the above regime change does not replace the current regime.  In fact, far from it, for several reasons.  Firstly, the government anticipates that the vast majority of EDPs will be voluntary.  That is to say, developers may choose whether to opt for their development to utilise the EDP or whether they prefer to utilise the current regime.  Secondly, the policy paper states an EDP will only be made where “there is robust evidence to support a strategic approach and where there is confidence that conservation measures will deliver a material improvement for nature”.  The Act frames it differently: it states that an EDP will only be made where the EDP passes the “overall improvement test”.  The “overall improvement test” is only passed “if, by the EDP end date, the effect of the conservation measures will materially outweigh the negative effect of the EDP development on the conservation status of each identified environmental feature”. The unknown elements of this assessment are obvious and have, from the very outset, been criticised by many in the environmental field. Therefore, it could be the case that there may never be an EDP covering a development site; and the government has already stated that the first EDPs will only cover nutrient pollution and great crested newts and thereafter they will prioritise EDPs based on an assessment of where requirements related to protected species and habitats have the greatest impact on development.  In addition, in comparing the cost of paying the Levy versus the cost of carrying out the measures under the current regime, it may very well be the case that the Levy is more expensive, leaving the developer with what would seem to be an easy financial decision to make.  In other words, the current regime is not going to be practically replaced anytime soon, therefore, and that is even before the issue of government funding for EDPs, resourcing and capacity is taken into account.

Conclusion:

In its Planning Reform Working Paper of December 2025, the Government stated its commitment and ambition of “getting Britain building again” (or “build, baby, build” in the words of the Housing Secretary, Steve Reed MP) “at the same time as supporting nature recovery…a win-win for the economy and for nature”.

The Government should be given credit for recognising the issues with the current regime but only time will tell whether this new regime will be a win-win or merely gambling with nature and the environment.

For an insightful article on the rest of the Planning and Infrastructure Act 2025, please refer to the brilliant article by James Woollard which can be found here.

If you have any questions about the topics raised in this article, please get in touch.