Reforms to the NSIP regime: better, faster, greener, fairer and more resilient

On 23 February 2023 the Government published its Action Plan for Nationally Significant Infrastructure Projects (NSIP) setting out its ambitions to reform and improve the planning process. Since then, the National Infrastructure Commission (NIC) has reported its recommendations on NSIP reform, the revised National Policy Statement (NPS) for water resources infrastructure has been published and a further round of consultation on the revised Energy NPSs has also been announced. Steps to reform are still in their infancy, however, the Government has signalled a clear intention to review the problems with the current system and make appropriate changes.

Relevantly, in its Action Plan the Government acknowledges as problems with the current system:

• Delays to reach a decision - the period for a DCO to be granted increased by 65% between 2012 and 2021 from 2.6 to 4.2 years. Further, more projects are requiring multiple extensions at decision stage generally relating to complex issues remaining unresolved following Examination and still requiring detailed consideration at decision stage.
• Volume of documentation - a general increase in the volume of documentation throughout the process (some applications have generated in excess of 90,000 pages of documentation published on the Planning Inspectorate website) slows down the decision-making process, making it less accessible and without guaranteeing better outcomes.
• Prospects of legal challenge - since 2021 there have been 15 legal challenges to DCOs, four of which (all in 2021) were successful.

The Government considers the current NSIP regime under the Planning Act 2008 is no longer appropriate to deal with the volume, complexity and scale of projects being brought forward and the Action Plan identifies five “reform areas” to address this:

1. Setting a clear strategic direction for infrastructure planning - requiring a clear and up to date policy position in NPSs. Reviews to some NPSs are underway and departments will work to deliver comprehensive policy coverage and to closely monitor the relevance, effectiveness in practice and currency of their NPSs to assist decision-making by Secretaries of State on further future reforms.

2. Operational reform to support a faster consenting process - requiring further streamlining of the application process and strengthening support to applicants through more regulations, guidance and practices changes to:

• review the level of statutory consultee engagement required for projects;
• ensure a more proportionate examination process especially for less complex projects (including the digitisation of the examination process);
• speed up implementation through reviews of the process for material and non-material changes post-grant of DCO; and
• better resource and more expert support during the pre-application process to support the quality of applications and enable key project issues to be identified early in the process

Intentions for a fast-track consenting timeframe have been signalled (for certain projects, where defined quality standards are met) through new primary legislation enabling the SOS to set shorter statutory timeframes. Consultation on the fast-track consenting proposals (including proposed quality standards) is anticipated for spring 2023.

3. Realising better outcomes for the natural environment - through the introduction of Environmental Outcomes Reports under the LURB, reviewing the protected sites and species policy framework (including for Habitats Regulations Assessments) for terrestrial and marine environments, incorporating biodiversity net gain (BNG) requirements for all (terrestrial) NSIP projects from November 2025 and developing an approach for marine net gain (MNG). The BNG target will be for NSIPs to achieve at least 10% measurable net gain on all terrestrial and intertidal development, which is to be secured for at least 30 years. Defra anticipates consulting on the draft BNG statement for NSIPs in early 2023. The Government has also signaled plans to implemented an Offshore Wind Environmental Improvement Package to accelerate the delivery of new offshore wind infrastructure whilst ensuring appropriate consideration of environmental impact (such plans include the production of a “library” by Defra of strategic compensation measures where impacts on Marine Protected Areas cannot be avoided, reduced or mitigated and imperative reasons of overriding public interest considerations apply, as well as seeking additional powers through the Energy Bill).

4. Recognising the role of local communities and strengthening engagement - through incentivising early, constructive engagement on NSIPs, to address impacts earlier and reduce the burden on developers and communities at the later stages of the consenting process. Increased funding to local authorities is proposed to support NSIP work through the Local Authority Innovation and Capacity fund as well as looking to establish a Local Authority Support Network (building on previous work with the Planning Advisory Service) to build capability and capacity across authorities, share learning, and encourage more efficient and effective local engagement with NSIP projects.

5. System capability – building a more diverse and resilient resourcing model - including through developing skills and training and extending proportionate cost recovery by the Planning Inspectorate and key statutory consultees to support effective preparation and examination of NSIPs and build resilience into the system.

The Action Plan (Annex A) sets out key actions plus target timelines, some of which we have already seen come forward with Defra publishing its NPS for water resources infrastructure on 17 April 2023 and a further consultation on revised energy NPSs which runs until 25 May 2023. According to the Action Plan, however, we can still expect further consultation documents relating to changes to the examination process, fast track consenting and quality standards, and cost recovery in the coming months.

NIC review of NPSs

As part of the proposed NSIP reforms, the NIC was asked in February by the Government for recommendations on:

• how to ensure NPSs are reviewed more regularly and how the process could be improved, including drawing on the experience of those departments who are currently carrying out NPS reviews;
• whether the current format of the NPS framework remains suitable and effective in providing the necessary planning policy framework for making timely decisions on applications for DCOs; and
• any additional recommendations the NIC considers would help strengthen and improve the policy framework for NSIPs.

In making those recommendations, the NIC was asked to:

• focus primarily on the NSIP regime and major infrastructure projects which are covered by NPSs;
• set out recommended priorities for government on infrastructure planning both in the shorter term (18 months) and in the longer term (five years), building on existing government plans for reform in this area; and
• take into account the work that has already been done by government to understand the causes of delay in the system as well as the cross government Action Plan for NSIPs.

On 18 April 2023, the NIC report was published setting out six recommendations designed to ensure the system meets four tests relating to speed to a decision, greater flexibility in the system, increased certainty and better quality outcomes.

The recommendations are ambitious and in some cases propose reasonably tight timescales for implementation. The recommendations are divided under five groups: “planning for net zero, climate resilience and growth”, “NPSs”, “strategic environmental management”, “benefiting communities”, and “accountability” and include:

• By 2025, have a legal requirement for five yearly (as a minimum) reviews of the NPS for Energy, Water Resources and National Networks (which should consider the appropriateness of existing and future technologies and thresholds) and criteria should also be set for triggering reviews of other National Policy Statements;
• Amendments to legislation to bring onshore wind into the NSIP regime as soon as possible;
• By July 2024, a system of modular updates to NPSs (linked to primary or secondary legislation) should be introduced to ensure clarity on how future legislative change relates to NPS;
• By the end of 2024, Defra should introduce a data sharing platform for environmental data with clear data standards, sharing relevant developer and local nature recovery strategy data;
• By the end of 2025 statutory consultees should develop a library of historic and natural environmental mitigations for different kinds of infrastructure;
• By the end of 2025, statutory consultees should also receive and use new resource to gather baseline data and agree strategic mitigations for urgent infrastructure, firstly for wind generation and electricity transmission, and then water resources;
• By the end of 2023 a framework should be developed of direct benefits for local communities and individuals where they are hosting types of nationally significant infrastructure which deliver few local benefits;
• By the end of 2023 a central coordination and oversight mechanism should be developed, reporting to the Prime Minister or the Chancellor, with measurable targets for reducing consenting times for NSIPs.
• By May 2024 performance indicators for statutory consultees operating under a cost recovery model should form part of compulsory service level agreements with developers, (including budget implications for failure to meet agreed service levels and developers’ applications should only be accepted for examination once a service level agreement is in place).

A number of these recommendations (for example those related to data sharing, engagement and streamlining of the process) seem to broadly align with the objectives set out in the Government’s Action Plan, however we will have to wait to see whether any of the above are actually taken up as part of the Government’s wider NSIP reform.