Small house-builders in Somerset are still finding it tough to deliver new homes due to the "catastrophic" crisis regarding phosphates, one developer has said.
Following the Dutch N court ruling and subsequent legal guidance from Natural England in August 2020, all new developments within the Somerset Levels and Moors catchment area are bound by strict regulations necessitating extra mitigation to prevent any net increase in phosphates.
The move stalled approximately 18,000 houses across Somerset, sending developers into a rush to forge agreements with local councils. These solutions included setting aside agricultural land within the same watershed, creating new wetland areas, and enhancing water treatment facilities.
The backlog has since reduced to about 12,000 homes, with many key sites progressing thanks to these mitigations or through the acquisition of 'phosphate credits', an approach where land within the same catchment is retired from active farming to offset the environmental impact of the new construction.
Despite these strides, small-scale developers are still facing challenges as they attempt to proceed with their projects. They often lack sufficient financial means to address the required mitigation measures upfront, especially in the face of mounting cost pressures.
In an interview with the Local Democracy Reporting Service, Chris Winter, the managing director of West of England Developments (Taunton) Ltd, discussed the persisting hurdles for smaller industry players.
He said: "To begin with, it was catastrophic because we had no solution. Natural England dumped this problem on the local authorities, making them look competent but giving them no authority to make decisions – everything had to revert back to Natural England.
"In 20 years of development, I'd never dealt with Natural England – and I was then dealing with them every other week trying to find solutions to this problem. It's been a headache ever since.
"We were trying to find solutions from day one, because we realised this problem wasn't going to go away.
"With the green agenda and sustainability, everyone's suddenly blaming development for ruining the Somerset Levels and Moors – when the reality is development is just a tiny fraction of what's causing the problems. Around 50 per cent of it is down to agriculture, and 40 per cent is caused by the existing population.
"Natural England and the Environment Agency have let the Levels and Moors get into a poor and deteriorating state, and we're picking up the the problem, so to speak.
"At the Wellington station site, that's a million pounds that's not going into affordable housing or education – and it's doing the square root of not much good for the environment."
Mr Winter's firm received approval from Somerset Council in May 2024 to construct 200 new homes on Nynehead Road in Wellington – a development which will provide access to the site of the town's new railway station.
As the government is set to confirm the station's future in its spending review on 11 June, Mr Winter is currently in talks with the council regarding the commencement date for construction work on the spine road through the site – a prerequisite before any homes can be occupied.
However, to reach this stage, Mr Winter's firm had to fork out £1m on phosphate credits to offset the new homes – funding that must be secured before laying a single brick.
Instead of buying phosphate credits from the council's own accredited scheme, Mr Winter chose to use WCI, a civil engineering company based in Wiveliscombe, which upgrades septic tanks to package treatment plants – allowing more phosphates to be extracted before they enter the river catchment.
He said: "We lost two years of development. Our local authority has been doing things to try and make it work or find solutions, but we've had to go out and find solutions with others.
"You have to have your phosphate credits in place [before you can begin construction], but the credit provider needs certainty that you're going to take those up.
"It was fortunate that we had a good positive indication we were going to get planning on that particular site in Wellington – but there's two other sites that we're looking at in the town where I'm saying we cannot risk spending that sort of money, because you might not get planning permission."
West of England's two other sites of interest are located at opposite ends of Wellington – the Little Jurston Farm site on the A38 West Buckland Road, where plans for 75 homes have been submitted, and land east of Wardleworth Way, a stone's throw from the Tonedale Mill regeneration site.
Developers can sometimes renegotiate the type of phosphate mitigation during construction, an approach West of England used on its Coronation Way site in Creech St. Michael, opting to scrap a planned orchard near the M5 in favour of "off-site non-mains drainage upgrades".
Mr Winter expressed frustration that developers had to pay so much for mitigation when large quantities of phosphates generated from housing merely passed through the Levels and Moors, instead of remaining there.
He said: "If I stood by the Wellington waste treatment plant with my £1m and threw £5 notes into the River Tone, I guarantee that 90 per cent of those won't go into the Somerset Levels and Moors – they'll go out into the Bristol Channel. So why are we mitigating for all of it?
"Surely somebody should be able to prove how much gets into the Levels and Moors?
"At the time we suggested it would be better for all us developers to pay a roof tax for the privilege of building in Somerset.
"If it would cost, say £2,000 a plot, with 18,000 homes being held up by this, the council would have £36m as a fund to go and do some good, and to restore the Somerset Levels.
"I've been invited to be part of a working group with Defra and Natural England, and they've come up with exactly that. They think it's a good idea."
Councillor Henry Hobhouse, whose Castle Cary division has experienced significant housing growth in recent years, has been advocating for more scientific research into phosphate levels within the Somerset Levels and Moors through his role on the council's climate and place scrutiny committee.
In addition to phosphate mitigation, all new developments proposed since January 2024 have been required to deliver a biodiversity net gain of ten per cent – a requirement Mr Winter believes is skewed against smaller developers like himself.
He said: "We build two or three plots at a time, but we can't take any credits for enhancing gardens, because the local authority say they can't monitor that.
"We have no surplus space to mitigate and create the biodiversity net gain, so we have to pay credits at £25,000 each.
"Meanwhile, the big house-builders will have acres of land, potentially, which will going into a management company and therefore be enhanced. They get biodiversity credit for that and we're stuffed, basically."
The council's stance on phosphates may soon shift, following recent legal advice which concluded that the removal of phosphates from Wessex Water's waste water treatment plants to date can count as mitigation.
The council's strategic planning committee accepted the new legal advice in March, with a revised version of its nutrient neutrality policy expected to be presented to its executive committee for approval by September.
Mr Winter welcomed this shift in strategy, but emphasised that any transition must be meticulously managed to avoid further delays and legal disputes.
He questioned: "The problem then is what happens to all these businesses that have been set up to create mitigation – and what happens to us if we're committing to changing septic tanks to package treatment plants. How is that all going to work?"
"The council has got to be very careful. If this was correct back in 2020, then we've had five years of grief, and perhaps we didn't need that.
"You can't have developers hand in glove with local authorities, but we would like more proactive dialogue."
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