The future of Biodiversity Net Gain for small-scale development

There is growing concern about how Biodiversity Net Gain (BNG) is affecting small-scale development, particularly in rural areas, more than a year after it became mandatory for most planning applications in England.

Last month, the government announced ambitions to streamline the planning process by enabling small and medium-sized enterprises to build faster on sites of fewer than 50 properties. Defra has since launched a consultation to understand how BNG should be applied to minor, medium, and brownfield developments. The consultation sits alongside various other working papers on planning reform, as well as the Planning and Infrastructure Bill.

BNG is a policy that requires developers to leave the natural environment in a measurably better state than before development – specifically by requiring developers to assess the harm caused and deliver an improvement of 10% via habitat creation. The consultation acknowledges that in most instances, BNG is working well, but that there are problems with minor applications. CLA members report that the implementation of BNG for minor developments has led to increased cost and complexity, and unintended consequences.

CLA members are involved in development both as applicants (e.g. for rural housing or farm diversification) and as providers of off-site biodiversity units for BNG. This means we need to balance the interests of members from both sides in our response to the consultation, and in our work on BNG more widely.

There are elements of the consultation we strongly support; particularly the proposal to exempt developments whose primary purpose is to enhance biodiversity. This would remove a significant barrier to projects like pond creation that have clear benefits for nature but are currently not viable with the cost of BNG, an issue that has affected members.

The contentious question is whether BNG should continue to apply to minor planning applications, including developments of fewer than 10 homes, small-scale commercial and some agricultural projects. On the one hand, the CLA has long argued for the need to simplify planning and make it easier for minor applications to come forward, however, nature markets are increasingly important to farm businesses, and we know how important environmental conservation is to land managers.

Given the complexity and importance of the issue, we took the debate to the CLA Policy Committee this week; the timing of the consultation meant that we were unable to take the debate to our branch committees. The discussion was wide-ranging and thoughtful, reflecting the diverse views within our membership and the potential consequences of either option.

There was broad agreement that BNG poses challenges for minor applications, particularly for affordable housing, farm diversification, and agricultural development.

However, there was little appetite for a blanket exemption without careful consideration. Many members emphasised the importance of nature recovery and the desire to do the right thing for nature. There were also concerns about the impact on nature markets, n terms of diminishing the demand for off-site biodiversity units and the knock-on impact for other nature markets.

In short, the committee was split, but it was clear that everyone wanted a pragmatic and proportionate solution.

We do not see exemption as a long-term solution, and one option is to use exemption as a temporary fix to alleviate problems. This would create a window to fix the underlying problems in the planning system and BNG implementation. During this period, we are calling on the government to:

• Provide clear guidance to local authorities on legal agreements, credit registration, and monitoring
• Increase resourcing for local planning teams to speed up section 106 agreements
• Reform the planning process to better support small rural housing sites
• Review permitted development rights to unlock more opportunities for farm diversification and agricultural development

If these improvements are made, and if the off-site BNG market matures to support small-scale developers, we would support reintroducing BNG for some minor applications in future. However, we are still considering whether certain types of development (such as rural affordable housing or farm diversification) should be permanently exempt. That will depend on how the market evolves and whether viability challenges persist.

BNG is a vital tool for delivering nature recovery, but it must be implemented in a way that supports, rather than stifles rural development. The CLA’s response reflects the need to balance environmental ambition with economic reality.