The government plans to create a new fund as a way for developers to meet their environmental obligations in a bid to boost housebuilding.

Currently, developers often have to establish mitigation measures for environmental harm on individual schemes before they are granted planning permission.

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Nutrient neutrality rules have held up tens of thousands of homes

Housebuilders have long said such environmental rules add costs and delay delivery, but environmental advocates say it is essential to prevent species decline and the degradation of natural habitats.

The government hopes its new Natural Restoration Fund will allow development to continue at pace while providing funds for natural recovery.

Rather than paying for individual site level assessments and delivering mitigation measures themselves, developers will pay into a fund, overseen by a delivery body such as Natural England, which will be responsible for securing positive environmental outcomes, for instance delivering a reduction in nutrient pollutants.

In opposition, Labour blocked Michael Gove’s attempt at nutrient neutrality reforms, but after being elected in July the environment secretary Steve Reed and housing secretary Angela Rayner acknowledged that “the status quo is not working”.

The HBF has previously estimated that the policy has held up building nearly 100,000 homes. 

In November, the government named seven councils set to benefit from £47m in funding to unblock around 28,000 homes stalled due to nutrient neutrality rules.

“For years, vital housing and infrastructure projects have been tied up in red tape leaving communities without the homes, infrastructure and jobs they need,” said Angela Rayner, housing secretary, describing the plans as a “win-win” for development and the environment.

Under the new system, the government will lead a single strategic assessment and delivery plan for an area, rather than taking a site-by-site approach.

The proposals have been set out in a working paper and the government is seeking views from stakeholders in order to develop the policy.

Tony Juniper, chair of Natural England, said: “It is evident that we need to take urgent action to address the worsening decline of nature, and we must also lean into the challenges posed by housing shortages.

“We will continue to work with the Government to help deliver their plans – but the two key issues of today, nature and economic recovery, should not be pitted against one another, as we step up efforts to avoid losing what protected remnants of nature remain while also restoring some of what has gone. 

“Instead, we should consider the huge opportunities which can be unlocked through better strategic planning which considers environmental improvements, economic development and green spaces for public enjoyment on a landscape scale.”