How will the Planning and Infrastructure Bill's Nature Restoration Fund transform the UK's development projects?
Published on 8th April 2025
Could the Nature Restoration Fund be the key to faster development and enhanced nature recovery?
The Planning and Infrastructure Bill received its second reading in the House of Commons on 24 March and is currently undergoing review at committee stage. This bill is a significant part of the UK government's strategy to stimulate economic growth by supporting the delivery of 1.5 million homes in England. It aims to balance conservation and development, addressing the environmental challenges that developers face under current rules.
One of the ways in which the government seeks to achieve this is through the implementation of a Nature Restoration Fund (NRF) to allow developers to pool financial contributions to fund large-scale conservation efforts. This proposed initiative will simplify environmental obligations and speeding up planning approvals.
NRF: the issue
Under existing regulations, developers are required to mitigate or compensate for certain environmental harms to protected sites and species before planning approval can be granted. This process can be costly and time-consuming, often delaying or blocking projects from proceeding. This has been the case in particular in relation to the need for housebuilders and those providing overnight accommodation to achieve nutrient neutrality.
This has led to significant delays in delivering housing, with a peak estimate of close to a 100,000 units held up in the planning process while developers and local authorities sought to identify and agree appropriate on-site and off-site solutions, many at a material cost. The current approach, therefore, places a significant burden on developers.
NRF: the change
The bill proposes to enable infrastructure builders to meet their environmental obligations more efficiently and at a greater scale by pooling financial contributions to fund larger strategic interventions for nature by making payments into the NRF. This fund will be managed by a delivery body, such as Natural England, which will utilise the funds to secure positive environmental outcomes through Environmental Delivery Plans.
The plans will set out a package of measures to address the conservation impact of a single development or by combining resources from multiple developments. These plans will facilitate environmental improvements and secondary benefits, such as public access to green spaces. They will also determine the nature restoration levy payable, tailored to the specific development, and the environmental obligations discharged by payment of the levy.
The new approach aims to streamline the process for developers, reducing the need for detailed environmental surveys and mitigation proposals. It offers a clear mechanism for offsetting environmental impacts, potentially avoiding costly and prohibitive on-site mitigation. However, on-site mitigation may still be required where a plan cannot compensate for specific harm.
Osborne Clarke comment
The government has set ambitious targets to deliver 1.5 million homes over the next four years. The NRF and the Environmental Delivery Plans represent the government's effort to help developers overcome the delays they face within the planning system while maintaining a commitment to nature recovery.
The government hopes that the bill, through the NRF, will expedite and facilitate development. This approach aims not only to offset environmental harm but also harness the positive impact that development can have in promoting nature recovery, creating a win-win scenario for both the economy and the natural environment.
The new approach should streamline the process, speed up planning approvals and address the complex environmental issues associated with a project's impact on protected sites and species. A standardised financial contribution may also help developers better estimate costs in advance.
Delivering environmental improvements on a larger scale and in more strategically significant areas could result in tangible benefits to nature. However, the success of these measures will depend on the level at which levy rates are set, the extent of any mandatory participation, and the clarity and effectiveness of the Plans in addressing specific environmental impacts, particularly their timing.
