Budgeting a scheme that needs a habitats regulations assessment

The cost that surprises developers about a habitats regulations assessment is not the assessment. It is the mitigation, and the fact that mitigation has to be secured for the lifetime of the development before permission can be granted. On a site in a nutrient neutrality catchment, the credit purchase and the legal work around it routinely exceed the ecological fees by an order of magnitude.

The second surprise is procedural. The local planning authority is the competent authority under the Conservation of Habitats and Species Regulations 2017, so the assessment is legally the council's, and the applicant pays for it anyway.

When an assessment is required

Regulation 63 requires the competent authority, before granting permission, to make an appropriate assessment of the implications of a project for a European site where the project is likely to have a significant effect on that site, either alone or in combination with other plans or projects.

European sites means special areas of conservation and special protection areas, with Ramsar sites treated the same way as a matter of national policy. The triggers that affect housing and commercial development in England are recognisable:

• additional foul drainage discharging to a catchment where nutrient levels already breach site conservation objectives
• additional water abstraction in a catchment where supply affects a designated site
• recreational pressure from new housing within a defined distance of a heathland, coastal or estuary site
• air quality effects from traffic on a designated site close to a road
• direct land take, hydrological change or disturbance during construction

Catchments and zones are defined and revised by the nature conservation body, so check the current position for the site rather than relying on a position from a previous scheme in the same district.

Screening and the likely effect test

Screening is the first stage, and it costs less than people expect provided it is done properly. The question is whether the project is likely to have an effect of the order the Regulations describe, alone or in combination.

One rule governs how the screening is written. Mitigation measures cannot be taken into account at the screening stage, following established case law on the Habitats Directive. So a screening note that concludes no effect because the scheme includes a package treatment plant, or because credits will be purchased, is wrong in law and will be rejected by the consultee.

The practical consequence is that most schemes in a constrained catchment proceed straight to appropriate assessment. Budget for that rather than hoping to screen out, and treat a successful screening as a bonus.

Screening also has to address in-combination effects, which means considering other permitted and proposed development in the same catchment. That information comes from the authority and the nature conservation body, and gathering it takes time rather than money.

Shadow assessments prepared by applicants

The authority is the competent authority, but it will not normally prepare the assessment itself. The convention is that the applicant commissions a shadow habitats regulations assessment, drafted so the authority can adopt it as its own with its own reasoning added.

That has two consequences for the budget. The document has to be written to a standard the authority and the nature conservation body will accept without substantial rework, which argues for an experienced author rather than the lowest fee. And the authority may still require changes, and those changes are the applicant's cost.

Keep the shadow assessment separate from the ecological survey work. A Preliminary Ecological Appraisal and any protected species survey serve different purposes, and a protected species survey requires a suitably licensed ecologist under the Wildlife and Countryside Act 1981 and the 2017 Regulations rather than a generalist.

Biodiversity net gain is a separate regime again, under the Environment Act 2021, and the statutory metric must be completed by a competent person with the biodiversity gain plan approved by the authority. A Biodiversity Net Gain Assessment is not a substitute for a habitats assessment and does not discharge it.

Mitigation evidence and its cost

Mitigation is where the money goes, and the form depends on the impact.

Credit prices are set by scheme providers and differ by catchment, so obtain written quotations early rather than working from a figure quoted in a sector article. Tariff-based recreational mitigation is different: the authority publishes the figure, and it is indexed, so take the current one from the published schedule.

Nutrient mitigation generally has to be secured for the lifetime of the development, which authorities express as a long period and often require to be underwritten by a management plan, a bond or an endowment. Check what the authority requires for duration and security, because an endowment changes the cash flow materially.

Where the constraint is foul drainage capacity, the connection and treatment position needs resolving with the undertaker in parallel, and our note on water and drainage connection costs on a small site covers the mechanics.

Nature conservation body engagement

The authority must consult the appropriate nature conservation body on the appropriate assessment, and in practice that body's response determines the outcome. Engage before submission.

What makes engagement productive is arriving with the calculation rather than the question. A nutrient budget worked through to a figure, with the assumptions stated, gives the consultee something to check. A letter asking what mitigation would be acceptable produces a generic answer and a delay.

Expect the response to test three things: whether the baseline is right, whether the mitigation is additional rather than something that would have happened anyway, and whether it is secured for long enough. Additionality is the one most often challenged, so document it.

Where the scheme changes instead

Sometimes the right answer is to change the project rather than to mitigate it. Four options worth modelling before committing to a mitigation strategy:

1. Reduce the number of units so the nutrient budget falls, where the marginal units are the ones carrying the cost.
2. Change the drainage strategy, for example connecting to a treatment works with headroom rather than relying on a package plant.
3. Deliver mitigation on land already in the scheme as open space, where it can serve two purposes, provided additionality holds.
4. Phase the development so mitigation is secured for each phase as it comes forward, spreading the cash flow.

Option four needs the condition and obligation wording to support it, and that has to be negotiated at decision stage rather than afterwards.

Programming against the determination period

A major application has a 13-week determination period, and a habitats assessment does not fit inside it comfortably. Allow for a sequence rather than a single event:

• screening note prepared and issued, with in-combination data gathered from the authority
• shadow appropriate assessment drafted, with the mitigation strategy quantified
• pre-application engagement with the nature conservation body, and a response received
• mitigation secured in principle, with written quotations or a tariff confirmation
• submission, consultation, and the consultee response within the 21-day period
• any revision to the assessment, and re-consultation
• the planning obligation drafted and completed, securing the mitigation
• the authority completing its appropriate assessment and issuing the decision

The obligation is the item that slips most often, because the drafting involves the applicant, the authority, the mitigation provider and sometimes a landowner, and none of them is working to your programme. Start it when the mitigation strategy is agreed rather than when the officer asks for it.

Where no alternative exists and the adverse effect cannot be ruled out, regulation 64 provides a route based on imperative reasons of overriding public interest, with compensatory measures. It is rarely available for commercial or residential development, and building a strategy around it is not advisable.

See PlanScope pricing: one free report, £50 per report, or Professional for unlimited reports. For specialist technical reports, qualified professional input may be required. PlanScope provides AI-assisted draft reports for planning applications. Reports should be reviewed before submission. We do not guarantee planning approval. This is general guidance, not legal advice; check the position with your local planning authority or a qualified professional before relying on it.