Major water resources infrastructure planning policy updated

The UK government laid the national policy statement for water resources infrastructure (NPS) (104-page / 761KB PDF) – the first policy of its kind for water resources or supply infrastructure – before parliament on Monday. It is pending parliamentary approval and then final designation by government.

Robbie Owen, a specialist in infrastructure planning at Pinsent Masons, said: “This is the most significant development in national planning policy for water supply infrastructure in England for a generation and the NPS has been keenly awaited since consultation on a draft in 2018.”

“Around 20 very large and important water supply projects, many of which are designed to provide greater resilience to drought conditions, will now be able to proceed further in the planning, consenting and procurement processes, knowing what government’s requirements will be. It will be essential for all of those projects to be developed and presented for consent such that they are in accordance with the NPS, otherwise they will not get consent, and so all those working on consenting will soon need to get to grips with the new policies in detail,” he said.

Comparing the NPS with the draft published for consultation in 2018, Gordon McCreath of Pinsent Masons, who specialises in water infrastructure planning law, said: “The final NPS retains some important parts of the four and a half year old draft, while also making some significant updates and expansions.” 

The Department for Environment, Food and Rural Affairs (Defra), the sponsor of the new NPS, said: “There is an immediate need to build resilience in the water sector to address pressures on water supplies.”

It is the latest major planning policy paper issued by the government in recent times following on from the publication of draft revised national policy statements for energy infrastructure and national transport networks, as well as the announcement of a review of the ports NPS and it also follows publication of the government’s new ‘Plan for Water’, which sets out proposals to transform and integrate the water system in England, reduce sources of pollution and improve water supplies through higher investment, increased regulation and more effective enforcement.

The new policy is the framework under which applications for development consent for nationally significant water resources infrastructure projects in England will be examined and determined. The thresholds for determining whether infrastructure projects qualify as ‘nationally significant’ infrastructure projects (NSIPs) are set out in the Planning Act 2008.

The distinction matters because applications for development consent orders in relation to NSIPs are determined by the Secretary of State, not local planning authorities – unlike with planning applications for other infrastructure projects.

The new policy statement also makes clear that proposed water resource infrastructure projects that do not meet the Planning Act thresholds for automatic consideration under the NSIP regime can nevertheless be brought within scope of the regime. This would happen where the developer successfully applies to the Secretary of State for what is called a section 35 direction – in those circumstances, the project is treated as if it were a NSIP and the new policy statement would apply, unless otherwise stated in the section 35 direction. This is a change from the previous 2018 draft of the NPS which provided only that the policy statement “may be a material consideration” in such cases.

The NPS explains the interaction between the NSIPs planning regime for water resources infrastructure and the duties water companies are under to develop water resources management plans (WRMPs).

Water companies in England are under a statutory obligation to prepare and maintain water resources management plans (WRMPs) that look ahead 25 years, setting out how they will manage demand and develop water resources, in line with water supply obligations. WRMPs are informed by regional and multi-regional water resources plans as part of a collaborative approach.

According to the NPS, if a water resources NSIP is included in a published final WRMP then the “need for that scheme will have been demonstrated in line with government policy” and would not be expected to be revisited as part of the application process. In that case, the examining authority would start their assessment of the application on that basis.

However, the position would be different for water resources infrastructure projects brought within the scope of the NSIPs regime by a section 35 direction and not covered by a final WRMP – in those cases, applicants will have to make the case for the need.

The NPS further makes clear that applications for a development consent order (DCO) to authorise a new water resources NSIP must include with it “a statement with a clear assessment of the proposal in the context of the [WRMP]”.

The NPS is, among other things, further designed to provide guidance to developers on issues such as how projects’ impacts might be managed. It confirms that water resources infrastructure will be required to “address future pressures on the public water supply, including those from climate change” and that water development should “contribute to and enhance the natural environment by providing net gains for biodiversity”.

“Clearly the WRMP remains at the heart of the needs case for NSIPs”, said McCreath. “Indeed, its importance is magnified: there are a number of additions to the NPS, setting out where certain parts of the WRMP will be important for the DCO application.” 

“The NPS also recognises that water projects can be nationally significant, and have the NPS apply to them, without necessarily hitting the sometimes-difficult legislative thresholds for qualification as an NSIP, with a helpful specific reference to the water recycling projects that will be necessary to meet the country’s supply deficit,” he said.

“In the most significant expansion of its ambit – and no doubt influenced by the hybrid approach to economic/environmental regulatory oversight of Strategic Resource Option projects to date – the NPS now requires that any application is accompanied by a statement of how the proposed project delivers value for money, by reference to the analysis in the WRMP,” he said. 

“Even where a NPS explicitly excludes such matters, a DCO application can find itself mired in discussions rebutting submissions on benefit-to-cost ratios” said McCreath. “So, we can say with some confidence that this explicit blurring of the lines between planning and the business case for a project will do nothing to smooth the path to delivering these essential projects.”

McCreath also noted that the requirement for environmental net gain – as opposed to the narrower concept of biodiversity net gain (BNG) developed since the draft NPS – is retained, in recognition of the significant opportunities that some water NSIPs will present for wide environmental improvement.

Current government proposals envisage developers behind NSIPs being under a duty to deliver a minimum of 10% (BNG) in the context of their developments from 2025. According to the new NPS, projects “should consider and seek to incorporate improvements in natural capital, ecosystem services and the benefits they deliver when planning how to deliver biodiversity net gain”.

However, it also said that BNG is “an essential component” of the wider concept of “environmental net gain”. It called for developments to “deliver wider environmental gains relevant to the local area, and to national policy priorities, such as reductions in greenhouse gas emissions, reduced flood risk, improvements to air or water quality, or increased access to natural greenspace” in addition to delivering on BNG.