A minister told the Lords the new nature levy would enshrine the rule that developers avoid environmental harm before paying to fix it. The regulations let a housebuilder pay in instalments after the harm is done, and the guidance never mentions the rule.

By Kevin Yeandel

Published 28 September 2026 at 06:23

4/53 documented mistakes in this teardownHow ratings work

Estimated reading time: 7 minutes

Aerial view of moored boats along a narrow Norfolk Broads waterway, running between grazing marshes. — Hardley Staithe, a Norfolk Broads mooring on the River Chet, February 2015. Photo: John Fielding / Wikimedia Commons, CC BY 2.0.

In short. At the Planning and Infrastructure Bill's Third Reading, the government told peers there was "a need to articulate how the principles of the existing mitigation hierarchy are expressed through the new system" of nature levies [1]. The Nature Restoration Levy Regulations 2026, made ten months later and in force since 11 September, still let Natural England accept payment "by instalments" after development begins and cut the levy rate "to account for actual or expected sources of funding other than the levy," exactly the two provisions the Wildlife Trusts told ministers in writing would let developers "delay and reduce payments meant to rectify harm to nature" [2] [3]. The operational guidance published to accompany the regulations, the charity's own fallback ask, does not mention the mitigation hierarchy once. Three documented mistakes: four stars.

A new way to pay for environmental harm

The Nature Restoration Levy Regulations 2026 implement Part 3 of the Planning and Infrastructure Act 2025, the legal mechanism behind the Nature Restoration Fund (NRF) [4]. Where Natural England has drawn up an Environmental Delivery Plan (EDP) for a protected site or species, a developer can pay the levy instead of carrying out their own site-specific assessments and mitigation [4]. The money is pooled to fund conservation measures at the scale of a whole catchment rather than a single site. The first EDP under the scheme is out for consultation now, covering nutrient pollution into the Norfolk Broads Special Area of Conservation and the River Wensum, open for views until 27 October [5].

The Explanatory Memorandum is explicit that this is a genuine change of approach, not a technical tidy-up: previously a "developer would be required to undertake their own assessments or deliver project-specific interventions," and payments under an EDP are meant to "more than offset those environmental impacts" rather than merely balance them (para 5.6-5.7) [4]. The scale involved is real money: the government's own impact assessment for the wider Nature Restoration Fund models a central Net Present Social Value of £408 million over the appraisal period, rising to £1,057 million in its high scenario and to £1,895 million under an alternative growth-aligned housebuilding trajectory (page 1, page 4) [6].

The promise that got the Act through the Lords

The Environmental Delivery Plan model replaces a long-standing principle in English planning: the mitigation hierarchy, under which a developer must first try to avoid environmental harm, then minimise what cannot be avoided, and only pay to compensate for what is left. Peers pushed back hard on the EDP system precisely because it substitutes a bulk payment for that sequence. At Third Reading on 10 November 2025, Baroness Taylor of Stevenage, the minister handling the Bill, moved a government amendment in direct response and told the House: "in moving to a strategic approach there is a need to articulate how the principles of the existing mitigation hierarchy are expressed through the new system," crediting Baroness Parminter and Baroness Grender for the concession (HL Deb, 10 November 2025, c21) [1]. That amendment is why the Act requires regulations on how EDPs prioritise avoidance, mitigation and compensation. It is also, on the Wildlife Trusts' reading, a promise about the levy regulations specifically, not just the separate prioritisation regulations that followed it [3].

Two clauses the charity named, both still there

When the levy regulations were laid in draft in June 2026, the Wildlife Trusts published a briefing naming two specific clauses it said broke that commitment [3]. Both survive unchanged in the version made on 10 September and now in force.

Regulation 11, "Payment by instalments," states: "When levy liability arises for a relevant development, Natural England may allow the levy to be paid by instalments" [2]. The Wildlife Trusts' briefing said this "opens the door to delayed levy payments, coming significantly after harm to nature is caused, effectively functioning as post-development compensation rather than mitigation," placing compensation before avoidance in exactly the order the hierarchy forbids [3].

Regulation 23(2), under "Charging schedules," states: "Natural England may set a reduced rate in a charging schedule to account for actual or expected sources of funding other than the levy for the conservation measures set out in the EDP" [2]. The briefing called this "a get-out-of-obligation-free card" that could let a developer's levy bill be cut because unrelated public conservation money, such as Environmental Land Management payments meant to reward farmers, happens to be funding similar work nearby, "not appropriate, value-for-money use of taxpayer funds" [3].

The charity's ask was specific: withdraw and re-lay the regulations without those two clauses, or, "as a bare minimum," write guardrails into the guidance, time limits on instalment payments, a general expectation against rate reductions, and an instruction that Natural England must always weigh the mitigation hierarchy when setting levy rates [3].

The fallback that was supposed to fix it

Neither happened at the level of the regulations. The guidance did arrive before the law took effect: "Using the nature restoration levy" was published on GOV.UK on 1 September 2026, ten days ahead of the regulations coming into force [7]. It explains how liability, instalments and charging schedules work in practice. A full-text search of the published guidance for "mitigation hierarchy," "avoidance," "compensat" and "value for money" returns no results at all [7]. None of the three guardrails the Wildlife Trusts asked for as a fallback, a time limit on instalments, a presumption against rate reductions, or a duty on Natural England to weigh the hierarchy, appear anywhere in it.

The Explanatory Memorandum's own account of oversight compounds this. It states plainly that "the instrument does not include a statutory review clause," because section 28 of the Small Business, Enterprise and Employment Act 2015 does not apply to a "tax, duty, levy or other charge" (para 10.2) [4]. The only stated safeguard is that "the legislation will be subject to ongoing review to ensure it is operating as intended" (para 10.1), a form of words with no statutory trigger, no timetable and no defined test [4].

The claims, tested

The claim	What the regulations and guidance show	Verdict
"There is a need to articulate how the principles of the existing mitigation hierarchy are expressed through the new system" (Baroness Taylor of Stevenage, HL Deb, 10 November 2025, c21) [1]	The two clauses the Wildlife Trusts identified as contradicting the hierarchy in June, instalment payments (reg 11) and rate reductions for unrelated funding (reg 23(2)), are both unchanged in the regulations made in September [2] [3]	The commitment is not reflected in the operative law
Levy payments "more than offset" environmental impacts and deliver an overall improvement (Explanatory Memorandum, para 5.7) [4]	Regulation 23(2) allows the rate to be cut for reasons unconnected to the impact being addressed, and regulation 11 allows payment to trail the harm rather than precede it [2]	The offset the document promises is not guaranteed by the mechanism it describes
The Wildlife Trusts' "bare minimum" fallback: embed the hierarchy, and limits on instalments and reductions, in the guidance [3]	"Using the nature restoration levy" (GOV.UK, published 1 September 2026) contains no mention of the mitigation hierarchy, avoidance, compensation or value for money [7]	The fallback safeguard was not taken up either

Credit where due

Some of what the Wildlife Trusts asked for was delivered. A separate instrument, the Environmental Delivery Plans (Appropriate Prioritisation) Regulations 2026, was laid and came into force on 9 July 2026 specifically to require Natural England to prioritise avoidance over mitigation and mitigation over compensation when preparing an EDP [3]. That is a genuine, separate piece of the promised architecture, even though the charity itself judged its "where appropriate" qualification weaker than intended. And the levy regulations do build in real enforcement and appeal machinery, Natural England must issue a liability notice, and decisions on charging and enforcement can be appealed, addressing a fair criticism that could otherwise have been made of a brand new charge with no dispute process [2]. The first EDP, covering Norfolk's nutrient pollution catchments, is out for public consultation rather than being imposed without scrutiny, exactly the kind of case-by-case openness the wider system's critics say the levy regulations themselves lack [5].

Three documented mistakes. (1) The minister's Third Reading commitment to articulate the mitigation hierarchy "through the new system" is not reflected in the two clauses of the levy regulations the Wildlife Trusts specifically flagged in June, instalment payments (regulation 11) and reduced rates for unrelated funding (regulation 23(2)), both of which survive unchanged in the version made in September. (2) The Explanatory Memorandum's own claim that levy payments "more than offset" environmental impacts is not guaranteed by a mechanism that lets the rate be cut for reasons unconnected to the harm and lets payment follow rather than precede development. (3) The Wildlife Trusts' fallback request, that the guidance embed mitigation-hierarchy guardrails if the regulations would not, was not taken up: the published guidance does not mention the mitigation hierarchy once. Rated four stars out of five.

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