Biodiversity net gain (“BNG”)

We are starting to see more activity in the marketplace as landowners and land managers make ready for the preparation and delivery of off-site biodiversity gain sites, through agreements with developers, the offering of off-set units and investment in creating habitat enhancements.

Developing with nature has been a theme for many house-builders and master developers for some years. Now, there's an increasing focus on the need to safeguard our environment, prevent habitat loss and create great green spaces in which new homes are built, for residents to enjoy alongside the animals and plants that naturally make their homes there as well.

As from November 2023, the provisions of the Environment Act 2021 are likely to introduce the requirement of 10% biodiversity net gain for almost all development sites, with only a few exceptions.  The new, mandatory provisions will be building on national and local planning policies that have been in place for a while. So, in some senses, this isn't new, but there is a change in emphasis.

New planning permissions for relevant developments will have general pre-commencement conditions that require the approval of a biodiversity gain plan for a development site. Such a plan will set out the developer’s required commitments to deliver enhanced biodiversity value on-site, and/or the allocation (to that development) of registered off-site gain (or else the purchase of Government credits) for habitat enhancement; the amount required will be calculated using a standardised biodiversity metric. The plan will be approved as a condition discharge, but ongoing maintenance of the works delivering the gain on-site will need to be enshrined in a planning condition, s106 planning obligation or a conservation covenant.

Where biodiversity net gain cannot be delivered completely, or at all on-site, then the required percentage uplift (that which is considered not achievable on site) will be measured in terms of units which can be purchased ensuring delivery off-site. Off-site mitigation will then be provided on registered biodiversity gain sites, for which allocations will have to be agreed and confirmed before development starts on-site.

As mentioned, we are starting to see more activity in the marketplace as landowners and land managers prepare for the registration of  biodiversity gain sites. This includes landowners undertaking evaluations of land which may be suitable for habitat enhancement, some landowners have already committed to green space and nature management acquiring land for this future purpose, and the creation of habitat banks in which off-set biodiversity units may be sold to developers. 

A strong argument can be made for off-site provision, at scale and by landowners and managers committed to and with experience of this as a purpose and objective of their organisation. The case is made that larger sites can be managed more effectively and potentially offer greater opportunities for biodiversity than smaller, fragmented provision on-site. Allowing for delivery of gain off-site through the purchase of units (or Government credits) is a pragmatic “win – win” solution, in keeping with the modern idea of “off-setting”. This approach looks likely to be followed as an option in the current  nutrient neutrality debate.

We are observing a potential debate around “less significant onsite enhancements” – which might be roadside verges, landscaping swales or features of sustainable drainage schemes, but could also be gardens associated with private dwellings. The issue here is the question of in-perpetuity (at least 30 years) management, and the enforcement of obligations to deliver such management to the agreed plan.  Local planning authorities and other enforcement agencies are going to be reluctant to be enforcing against householders, and so we consider it likely that domestic gardens in new developments will contribute little, if at all, to the quantum of on-site habitat enhancement in the biodiversity net gain plan for a site. We are waiting for the outcome of DEFRA’s recent consultation to judge how this will be resolved.

Who and how these gain sites will be funded is something else that we are seeing develop. There will be a trade in biodiversity units, bought and sold as between landowners and developers. Some house-builders and master-developers on large sites will be able to deliver their habitat enhancements on-site and are likely to commit some capital development budget to delivery, and recoup costs and ongoing maintenance though management and residents’ service charges. There are likely to be endowments of capital funds and commuted sum payments to land managers, local authorities, town or parish councils, habitat bank providers and charitable and social enterprises, such as the national network of Wildlife Trusts and the Land Trust. There may also be some grant funding arrangements, as well.

Biodiversity net gain is nothing new, but it will be taking on a new and exciting direction in the coming years. Many developers have embraced developing with nature in pursuit of doing the right thing, meeting the compelling demands of their Boards and their shareholders, and seeing the value of great placemaking and place-keeping in sustaining new homes sales prices. Looking to the future, the emphasis will be increasingly on meeting needs and addressing our nature recovery plans, with a mindset shifting from residents’ amenity to land management for the principal benefit of stewardship of our precious environment.



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