Defra has announced plans for Biodiversity Net Gain (BNG), which will be mandatory for some applications for development in England from November 2023. The government announcement also states that BNG will offer payments for others to provide the land for developers to use.
What is the latest announcement?
Over 12 months ago, Defra consulted on proposals to ensure that new development delivered an increase in biodiversity. Last week, Defra produced its response, and is broadly in line with what the CLA expected for commercial developments.
The good news is that there is a separate scheme for small sites, an exemption for single dwellings and self-build, permitted development and the provision of a statutory credits scheme.
The bad news is that Defra has not ensured that compulsory acquisition cannot be used to cheaply shortcut the system.
From November 2023, BNG will need to be provided on larger sites, from April 2024 on smaller sites and from November 2025 for National Strategic Infrastructure Projects (NSIPs). Developments will have to show that they will deliver a 10% uplift in biodiversity over and above what has been lost to the development. This resulting habitat will need to be maintained for at least 30 years, with a separate method needed for dealing with what is defined as irreplaceable habitat.
How will it impact developers?
The land on which BNG has been secured will have to be registered with Natural England. Defra has clarified that it will be acceptable to use the same land to deliver both BNG and nutrient neutrality offsetting if the management is compatible, but not for carbon schemes.
Where BNG cannot be delivered on-site, then BNG credits can be purchased on the open market, and statutory credits will be available for purchase from Natural England. While Natural England is going to be the BNG site register operator, the government does not have the intention to establish a trading platform - it sees this as something that the market should develop.
Natural England will not have an enforcement role – it will be down to the local authority through planning conditions, conservation covenants, or by commercial contracts between the developer and the BNG provider.
Should the contract to provide BNG or the habitat be broken because it is difficult to establish or maintain, then the penalties could be substantial. This will be part of the contract enabling the delivery of the development.
There will be two schemes:
- A small scheme with its own metric to cover areas of less than 1ha or up to nine houses or 1000m².
- A larger scheme to capture all other development.
It is not intended that temporary land uses should be caught by BNG, nor permitted development land used as permitted or land within protected landscapes that otherwise would have benefited from permitted development rights.
What are the drawbacks?
The key area where Defra has ‘ducked the issue’ is on compulsory purchase, perhaps because those powers reside within a different department. Defra has not set out a proper enforceable hierarchy (onsite, offsite, statutory credits, then as a last resort compulsory purchase), and the impact will mean that infrastructure providers will be more likely to acquire land for BNG in the same way that HS2 has provided for their schemes. The risk is that acquirers, who often display little interest in the businesses that they are affecting, will decide on BNG for expediency rather than the best solutions. Businesses will be impacted more heavily by increased land take and will be compensated poorly.
It also brings into question whether the £4.18m already committed by the government and the further £16.71m promised to local authorities will ensure that they can adequately equip themselves for this challenge. In addition, will this resource be ringfenced for the administration of BNG within planning departments, or will it be siphoned off?
What does it mean for members?
For members planning development, we suggest that they start to plan for BNG provision now, well ahead of submitting any development proposals. Where land is under option or promotion, we recommend revisiting any agreement to see how BNG will impact on the proposal as it could be a significant extra financial burden.
For members who see the provision of land as a BNG offset for land developed elsewhere, it is important to not get carried away. While the money offered by developers might look attractive now, it will have to cover the establishment of the habitat and its maintenance for at least 30 years. The government does not expect the habitat to be lost at the end of this period, and while no more BNG funding can be given to maintain the land, more BNG funding can be used to further enhance the habitat at the end of the term. It is also important to keep in mind that this land could be designated if an important habitat is established.