New Legislation Allows Developers to Bypass Environmental Mitigations in Favour of a Fund for Nature Restoration

In a significant shift aimed at boosting economic growth, the Labour government is removing the power of environmental regulators to delay major construction projects over environmental concerns. Under new legislation, developers will no longer be required to address the environmental impact of their projects before proceeding with construction. Instead, they will contribute to a new Nature Restoration Fund, which will fund environmental conservation efforts to counteract any damage caused by these developments.

Steve Reed, the Environment Secretary, defended the move, stating that nature and development have been unnecessarily placed in opposition. He argued that the current system, which hinders economic growth, fails to adequately support nature recovery. “These changes will unlock infrastructure projects while maintaining environmental protection,” Reed affirmed.

Angela Rayner, Deputy Prime Minister and Housing Secretary, added that the existing system had caused delays to essential infrastructure, with projects being held up for years. She emphasised the government’s new approach would allow developers to meet their environmental obligations more efficiently while removing unnecessary barriers to construction, which communities urgently need.

The new measures are expected to enable the approval of up to 150 major infrastructure projects, including road, rail, and energy initiatives, by 2030, as stated by the Department for Environment, Food & Rural Affairs (Defra).

Previously, large-scale housing and infrastructure developments were required to mitigate any environmental harm before receiving planning permission. This process often led to significant delays and added costs. An example of such delays includes the case of former Prime Minister Boris Johnson’s swimming pool, which was delayed due to the need to protect newts in his garden. Similarly, HS2 Ltd spent over £100m building a protective shelter for bats along the high-speed rail line.

Under the new system, the funds developers pay into the Nature Restoration Fund will be used for broader environmental initiatives across the country. The change will be incorporated into the upcoming Planning and Infrastructure Bill, which is set to be presented in Parliament this year.

This policy shift comes at a time when Labour, under Rachel Reeves, is under pressure to drive economic growth, as the UK economy continues to struggle. The government’s failure to deliver on its promise of leading the G7 in sustained economic growth has been compounded by rising borrowing costs and a weakening pound. Reeves has indicated that economic growth must be pursued “further and faster,” including through potential cuts in a forthcoming spending review.