Biodiversity Net Gain – what does it mean for members?

As the Biodiversity Net Gain requirement becomes mandatory for large developments, CLA experts outline what members need to consider regarding planning and biodiversity units
Field with wildflowers

The introduction of Biodiversity Net Gain (BNG) from 12 February for large developments and 2 April for small sites means all suitable planning applications will be required to demonstrate that they will compensate for any loss of biodiversity plus a minimum of 10% within the site or offsite for a minimum of 30 years.

This will affect CLA members involved in developments, including small-scale conversions, but will also provide an opportunity to deliver offsite units for other developers.

Delivering off site biodiversity units

BNG is an opportunity for landowners to deliver offsite biodiversity units for sale to developers or to use in their own developments. Developers must identify land for BNG with their planning applications. Many will put some onsite, but there will also be demand for offsite biodiversity units of different types.

Where do I start?

There are three main areas to consider, covered below. However, not everyone will have suitable land or be in the right place to create biodiversity units.

What land do you have available to commit to a 30-year contract?

BNG contracts will require a minimum of 30-year term with legal agreements through section 106 agreements or conservation covenants. Th is will have implications for future generations and fl exibility of land use, so consider the amount and placement of land.

How many and what type of biodiversity units can you produce?

Land type will determine how many units of different types you can create. Typically, you can create two to six biodiversity units per hectare, with poorer land offering more potential.

What is the local demand for biodiversity units?

Find out about likely demand by speaking to local planning departments, developers and advisers. Identify if there are any special types required, such as woodland or hedgerow, as they will carry higher value.

How do I measure biodiversity and create the units?

The government has developed the Biodiversity Metric for measuring baseline biodiversity and estimating the units that will be created from the habitat management plan. It is available online, but you need an ecologist to do the detailed assessments. For smaller sites, it may be possible to undertake the assessments yourself. The user guide for the small sites metric can be found here.

What type of contracts are available?

There are three ways to enter the market, and the pros and cons of each need to be carefully considered:

  • Develop your own projects, find buyers and negotiate agreements. This will deliver the highest return but has higher risk.
  • Work with a project developer, market operator or adviser that can provide ecological and market knowledge and negotiate agreements.
  • Lease land to someone else to create the biodiversity units and negotiate agreements.

What to consider when negotiating an agreement

The price of biodiversity units varies depending on the local supply and demand, and the type of unit. You need to understand your baseline delivery costs over the 30-year period, which include capital costs of establishment, management and monitoring, risks of failure and potential changes in land value. Costs will generally be lower for larger areas. This is a 30-year contract with a legal commitment to deliver, so seemingly high figures could easily be eroded over time and turn into a liability in the future.

Yes – as with any contract, it is important to have professional advice to protect your interests. You must understand the tax treatment of your proposed contract, including whether payments are taxed as capital or income, whether VAT will apply, and the impact on inheritance tax reliefs that might be available on the land.

Planning considerations

What is a small site? A small site is any development of one to nine dwellings or a site area of less than 1ha (2.47 acres) or non-residential development less than 1,000sqm. Small sites must demonstrate BNG from 2nd April 2024 whilst anything larger has been required to demonstrate BNG from 12 February 2024.

There are three ways to provide BNG:

  1. On-site within the application site’s redline boundary.
  2. Off-site (anything outside the site’s redline boundary).
  3. Through purchasing statutory credits (although this should be seen as a last resort).

Development exempt from delivering BNG:

  • Householder development (extensions, conservatories or loft conversions).
  • Small-scale self-build/custom housebuilding of up to nine homes or sites smaller than 0.5ha.
  • Development impacting habitat less than 25sqm or 5m of linear habitats (hedgerows).
  • Permitted Development.

Why is it important to consider BNG?

Planning applications will need to demonstrate BNG, or they could be refused. Members should consider whether they can provide this on or off-site and what this means for the proposal. Members may also consider providing off-site opportunities for habitat creation for other people’s developments – a potential alternative income stream. If you are considering this, it is important to review the Defra guidance. The CLA can also advise on the advantages and disadvantages of providing off-site BNG.

What to do before submitting a planning application

It is important that BNG is considered from the outset of any proposal. First, are the proposals exempt from BNG? Second, speak to an ecologist and have a baseline for the biodiversity value of the site prepared. Finally, consider if on or off-site is the best option and adapt the proposal accordingly.

Not considering BNG prior to submission of a planning application could result in an objection from the council’s ecologist or a request for additional information, which could prolong the planning process and result in the application having to be withdrawn and resubmitted. As the free-go for resubmission of planning applications has been removed, it is important that applications are submitted with the necessary information.

Try an independent and free biodiversity unit finder

Biodiversity Net Gain

Visit the CLA’s online BNG hub for more guidance and advice