England’s environment regulator could face an investigation over claims it is blocking new housebuilding through one of its green schemes, The i Paper can reveal.
Natural England has been accused of blocking privately run rivals from taking part in the sale of so-called nutrient credits, which are designed to ensure housebuilders do not damage the local environment.
The Competition and Markets Authority (CMA) has confirmed it is considering a complaint from Biocore Agri, a Lancashire-based nutrient credit company, over allegations Natural England is preventing other firms from selling the credits.
Natural England rules state that when new homes are built, developers must offset any extra water pollution created by increased levels of harmful nutrients such as phosphorous and nitrogen through a range of measures such as creating new woodlands or wetlands to capture pollution.
Nutrient credits, which represent a kilogram of the nutrient reduced elsewhere, can be purchased through Natural England and cost up to £25,000 per home. Critics say the scheme has blocked the construction of tens of thousands of homes and its costs impede the ability of developers to contribute towards local infrastructure.
There has been a growing market for nutrient credits since their introduction in 2022 and Natural England has itself sold around £6m to developers. The body says it does not profit from the scheme and that it helps protect rivers and wildlife.
Biocore Agri claims it has created an innovative nutrient solution that mitigates water pollution more cheaply, but maintains that it has been blocked from entering the market after Natural England U-turned on a decision to approve its product.
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Councils typically consult Natural England on which nutrient credit schemes to allow developers to use when approving new homes.
Henri Willmott, head of natural capital at Biocore Agri, said: “There are several ways Natural England have blocked us from entering the market.
“Having achieved its approval in May 2024, after waiting an excruciating 11 months for it to review our nutrient solution, Natural England blocked the implementation of our approach only a few months later.
“We were a disruptive threat to its market activity and is chiefly why we believe it has been acting anti-competitively in preventing our entry in the market.”
The nutrient credit scheme was backed with £30m of taxpayers’ money when it was launched and Natural England has spent £17m on setting around 30,000 acres of land aside to offset the environmental impact of development.
In 2023, pressure group the Conservative Rural Forum claimed the “nutrient neutrality” rules had stalled the construction of 145,000 homes.
MPs have previously criticised the quango for taking farmland out of food production in favour of rewilding in order to meet its rules.
Mark Spencer, the former Conservative farming minister, said in February: “Natural England has become one of those monsters that is now uncontrollable. They seem to be sucking all the common sense out of some of these decision-making moments.”
Mike Burke, director of sustainable development at Natural England, said: “In order to build the houses the nation needs, developers must meet regulatory requirements to ensure they don’t add to the pollution of our waterways.
“Our role in the planning system is always based on rigorous scientific assessment, with decisions on mitigation measures made by local planning authorities.
“Like any public body, Natural England cannot profit from its actions to support development of the nutrient mitigation market.”
How taxpayers have backed nutrient credits
Deputy Prime Minister and Housing Secretary Angela Rayner is leading the Government’s building drive (Photo: Joe Giddens/PA Wire)To-date taxpayers have picked up a £133.5m bill for intervening in the nutrient market, with £33.5m invested as part of Natural England’s nutrient offsetting scheme and £100m allocated to local authorities.
Natural England has asserted that its offsetting scheme will be “cost neutral to the public purse” and its credits are priced to cover costs. However, answers from a Freedom of Information request disputes this as there are no repayment terms and any revenue generated is to be reinvested.
Currently its costs are outstripping its income from the sale of its nutrient credits. It has 26 staff employed at an annual cost of £1.1m per year and has spent a further £17.54m setting up its offsetting scheme.
According to Natural England last published set of annual accounts for the financial year 2022-23, the group’s chief executive Marian Spain received annual pay of between £190,000 and £195,000, more than the Prime Minister’s £172,153.
Whilst wider prices for nutrient credits from private companies have fallen, Natural England has increased its prices by 47.9 per cent in Northumberland and 20 per cent in Dorset to £2,700 and £3,250 respectively.
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