Proposed decision –
That the Cabinet Member for Economic Development in consultation with the Deputy Leader and Cabinet Member for Finance, Corporate and Traded Services:
(1) agree to £9.8 million of funding from the Ministry of Housing, Communities and Local Government, be used to award grant funding to Local Planning Authority partners to deliver mitigation schemes for Nutrient Neutrality in the Stour catchment.
(2) DELEGATE authority to the Corporate Director of Growth, Environment and Transport and Corporate Director of Finance to take relevant actions including, but not limited to, finalising the terms of, and entering into, required grant agreements as necessary to award funding to Local Planning Authority bids for mitigation schemes for nutrient neutrality in the Stour catchment.
(3) DELEGATE authority to the Corporate Director of Growth, Environment and Transport in agreement with the Cabinet Member for Environment, and Cabinet Member for Economic Development to nominate an officer as an observer to sit on the executive board of Ashford Borough Council and Canterbury City Council joint venture company Stour Environmental Ltd which will deliver mitigation schemes on their behalf.
Reason for the decision
Nutrient neutrality in the Stour catchment is having a significant impact on the delivery of homes in East Kent.
- Decision 24/00014 taken in March 2024 by the Cabinet Member for Economic Development gave authority for KCC to enter into Memorandums of Understanding to accept £9.8m capital and £430,000 of revenue funding from the Department for Levelling Up, Housing and Communities to support nutrient neutrality mitigation works in East Kent to unlock the restrictions on housing development.
- KCC as Local Planning Authority has received £9.8 million (in December 2024) funding for mitigation works and this funding must be committed to a programme by March 2025. It is expected the funding will be awarded to Local Planning Authority partners to deliver nutrient mitigation.
- Ashford Borough Council and Canterbury City Council are establishing a joint venture company Stour Environmental Credits Ltd a company limited by shares to deliver the nutrient mitigation on their behalf and will be ready to deliver mitigation schemes which will generate credits and be sold to release housing development. It is expected the Joint Venture Company will be ready to trade within the first quarter of 2025. KCC will nominate an observer to the board of the Stour Environmental Credits Ltd allowing it to have oversight of the governance and financial arrangements of the joint venture company including how funding awarded to them is used. As the Stour Environmental Credits Ltd is currently in the inception process it is recommended that the decision to nominate an officer to act as an observer to the board be deferred. The nomination of an observer to the board will form part of the grant agreement and the observer will provide no direction or instruction to the board.
- There are no additional budget implications from the release of this funding. However, KCC will be the Accountable Body, so part of this role will be to ensure funds awarded are spent in line with the terms of the grant determination letter. A Grant Agreement will be required between KCC and each LPA that bids for funding to manage the financial risk if partners do not comply with the terms of the grant.
Background – Provide brief additional context
KCC acts as the catchment coordinator, a non-statutory role, for the Stour Catchment Nutrient Neutrality. KCC has been working in partnership with the districts to assess and identify mitigation measures for managing nutrient levels within the Stour Catchment. Currently housing development within the impacted districts cannot proceed without the generation of nutrient mitigation credits which can demonstrate that the nutrient loading within the catchment will not increase as a result of further housing development.
KCC has been awarded capital funding from the Local Nutrient Mitigation Fund for the delivery of mitigation schemes which can offset nutrients and generate credits. Districts will bid to KCC for funding to develop and deliver mitigation.
Options:
Option 1: Award grant funding to partners to deliver mitigation schemes for Nutrient Neutrality in the Stour catchment.- Impacted Local Planning Authorities will bid to KCC as catchment coordinator, for Local Nutrient Mitigation Funding. The funding awarded to LPAs will deliver mitigation measures, including but not limited to, septic tank conversion, water efficiency retrofitting, wetlands, agricultural reversion and floodplain meadow creation. The delivery of these measures will generate credits which the LPA will sell to developers to release housing. The returns from credit sales will be recycled and invested in further mitigation measures.
Option 2: Do nothing - If KCC was to decide to take no action this would prevent the delivery of high-quality locally led mitigation solutions, and result in the housing allocation within the impacted districts not being met. This would have wider implications of negatively impacting economic growth within the county - discarded
Option 1 is the preferred option. As the catchment coordinator, KCC has a responsibility to address the ongoing issue of Nutrient Neutrality in order to unlock housing development in the area.
How the proposed decision supports the Framing Kent's Future - Our Council Strategy 2022-2026
- The decision supports Framing Kent’s Future 2022-2026 priority 2 – Infrastructure for Communities, which makes specific reference to our strengthening our capacity to support strategic planning across the county to provide an oversight of the county’s plan-led development and infrastructure needs.
- Priority 3 – Environmental Step Change, which makes specific reference to our environmental targets and objects, compliance with legislation, protection of the environment, reducing our impact to the environment, protection and enhancement of biodiversity and ecosystems, sustainable resource use and climate change mitigation and adaptation.
How the proposed decision supports Securing Kent’s Future 2022 -2026: Securing Kents Future - Budget Recovery Strategy.pdf
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- The release of grant funding will not place any additional burden on the budget and a legal framework will be established to remove any financial risk to KCC through the awarding of funds.
- The release of the funding will increase investment within the county and support economic growth.
Decision type: Key
Decision status: Recommendations Approved (subject to call-in)
Notice of proposed decision first published: 24/12/2024
Decision due: Not before 22nd Jan 2025 by Cabinet Member for Economic Development
Reason: To allow 28 day notice period required under Executive Decision regulations
Lead member: Cabinet Member for Economic Development
Lead director: Stephanie Holt-Castle
Department: Growth, Environment & Transport
Contact: Louise Smith Email: Louise.Smith@kent.gov.uk Email: LouiseSmith@maidstone.gov.uk.
Consultees
The proposed decision will be considered by the Growth, Economic Development and Communities Cabinet Committee on 22nd January 2025
Financial implications: KCC has received £9.8 million of capital funding, £430,000 of revenue grant funding and a further £100,000 revenue funding to support the catchment coordinator role from the Ministry of Housing, Communities and Local Government’s Local Nutrient Mitigation Fund The Water Resources Manager within the Flood and Water Management team is a base funded member of staff who has the catchment co-ordinator role within their remit. The Water Resources Manager will be responsible for the administration of the grant scheme. Additional resourcing to support the defrayment will be required from the Planning, Policy and Strategy, finance and Internal Audit teams as part of business as usual activity. Any costs incurred to these teams will be met from the revenue funding.
Legal implications: The KCC Legal team have been asked to: • Identify and report any risks to KCC from the planned approach • Review the Articles and Constitution of the Joint Venture Company Stour Environmental Credits Ltd • Support the Governance arrangements for the joint working group and the assessment of grant applications • Review the Grant determination letter from the Ministry of Housing, Communities and Local Government • Develop the grant agreement contract for applicants applying for Local Nutrient Mitigation Funding
Equalities implications: Equalities implications: An initial EqIA screening has been completed identified no harmful implications for any protected characteristic groups at this initial stage. A full EqIA is being undertaken and will be published shortly. Data Protection implications: There are no Data Protection implications as no personal data will be processed by KCC as part of the defrayment