Housebuilder CG Fry makes landmark legal challenge over nutrient rules

South West housebuilder CG Fry & Sons is awaiting the outcome of its high court challenge against the government which could have major ramifications for the impact of nutrient neutrality on the planning system.

The housebuilder has spent the last two days in the High Court arguing against the refusal of a planning application for 650 homes in Wellington, Somerset which was initially approved, before the local council then declined to discharge final conditions after Natural England said the area was at risk of nutrient pollution.

The council’s decision was later upheld by a planning inspector, prompting CG Fry to take legal action against both Somerset West and Taunton council and the Secretary of State for Levelling Up, Housing and Communities.

The court action is thought to be one of the first significant legal cases to challenge the law around the nutrient neutrality crisis, which the Home Building Federation estimates is holding up 120,000 homes in the planning pipeline, and reducing annual supply by up to 41,000 homes per year.

Barrister Dr Ashley Bowes, acting for CG Fry in the case, said: “Hopefully this judgment will give us some answers to an issue that is causing chaos in the industry right now. For small builders this can have a devastating effect.”

Currently the nutrient neutrality issue affects 72 local authorities covering protected habitats, and requires developers submitting applications in these areas to ensure that schemes are “nutrient neutral” in order that they can proceed, something that is often, in practice, impossible to achieve.

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The case refers to phase three of the 650-home Jurston Farm scheme in Wellington, which was given outline approval in 2015, with the individual phase given reserved matters approval in June 2020. Shortly after this, in August, Natural England issued an advice note warning Somerset local authorities that water courses in the area were at risk of nutrient pollution, effectively meaning that developments should only be approved if they achieved nutrient neutrality.

A year later the developer appealed as the council still hadn’t discharged relevant planning conditions on the approval, with the planning appeal ultimately turned down by an inspector in November last year.

The developer is bringing its case on a number of different grounds, some of which will have wider relevance to other schemes. Firstly, as the site in question is not actually protected under EU habitats rules, but is instead a Ramsar site – a protected area under a different international convention, the housebuilder argued that the EU-derived law protecting habitats sites from nutrient pollution does not apply.

Secondly, it made the case that the application of the habitats rules falls at grant of full or outline planning permission – and not at either reserved matters or conditions stage, and so therefore the council and inspector had no right to block an already permitted scheme at this stage.

In addition, it argued that the planning conditions were unconnected to the issue of nutrient pollution, and that therefore the council had no right to refuse to discharge them, and also that the scope of the “appropriate assessment” carried out by the council under habitats regs should have been limited to that required for the discharging of the conditions.

The government contested the case, arguing that the inspector had not erred in his decision. The government has previously made clear that it believes that reserved matters decisions are covered by the nutrient neutrality issue, but that opinion has not been tested until now. A judgment is not expected for several months.

CG Fry was ranked 50^th in Housing Today’s Top 50 Housebuilders tables in 2022, recording a turnover of £88.6m.