Biodiversity Net Gain – here’s what you need to know

Biodiversity Net Gain is being introduced to protect nature by ensuring that developments enhance biodiversity rather than have negative impacts on the environment. It means that most developments will have to demonstrate a 10% uplift in habitat biodiversity to secure planning permission, and it will become mandatory from January 2024.

The Biodiversity Net Gain (BNG) concept is part of the drive to restore biodiversity in the UK in view of catastrophic declines in some species and the impact of its loss on ecosystems, pollination, water and air quality, flood resilience, and food security. Its introduction highlights the crucial link between the natural world and our economic stability.

We take a closer look at how mandatory biodiversity net gain will affect development projects.

Priority habitats: a Ramsar site (a wetland of international importance) at Brown Moss, Shropshire.

What is Biodiversity Net Gain?

The Environment Bill (which gained royal assent in November 2021, passed into UK law, and became the Environment Act 2021) introduced the concept of biodiversity net gain. Basically, it’s an environmental scheme designed to protect and boost nature following land and building development projects, which aims to leave the natural environment in a measurably better state than it was pre-development.

Biodiversity net gain mandates net gains for biodiversity across nearly all future development proposals in England, from nationally significant infrastructure projects to small sites. Only small schemes (under 10 houses) are exempt until April 2024, so property developers must consider biodiversity net gain as part of their pre-development plans.

It works by assessing measurable improvements for biodiversity through the creation or enhancement of habitats in association with development. Biodiversity net gain can be delivered on-site, off-site or through a combination of both. Biodiversity on a site is measured – both the pre-development value and the projected post-development diversity value – using the Defra-approved biodiversity metric (the latest is the 4.0 metric). The applicant can then adjust the design stage proposals to ensure the final outcome results in delivering net gain, and planning consent can be granted.

An ecological consultant will assess a site to calculate its overall biodiversity value. They will then draw up a plan to protect biodiversity, retaining types of wildlife habitats and protecting features of ecological importance. In some cases, there may be no alternative but to safely relocate inhabiting animals and destroy or move trees and plants that obstruct the development. To counter the negative elements of a development, biodiversity net gain states that the habitat removed must be replaced and the overall biodiversity on site must be increased by 10%.

Background to biodiversity net gain

A State of Nature report published in 2019 found a 13% decline in UK wildlife since the 1970s and data from an RSPB 2019 report stated that 41% of UK species had declined, and UK priority species had declined by 60%, since 1970.

Previously, biodiversity was protected by the Conservation of Habitats and Species Regulations 2017, the Wildlife and Countryside Act 1981 as amended, the Natural Environment and Rural Communities Act 2006, and the Town and Country Planning Act 1990. The National Planning Policy Framework in 2012 introduced the concept of making the protection and improvement of biodiversity around development sites a planning requirement.

To build on these protections and improve biodiversity, and because the UK lost existing EU protections following Brexit, mandatory biodiversity net gain was introduced to ensure new developments are only allowed if there is no habitat and biodiversity loss as a result. Biodiversity net gain means that habitat and wildlife impacted on the site must not only be restored to its original state but the biodiversity value must be improved by 10%.

The legislation aims to carry out environmental and land management in a sustainable way, retaining irreplaceable habitats and sections of ancient woodland, enhancing habitats, combating the effects of climate change, and ensuring that local authorities, the UK government, Natural England, Natural Resources Wales, the British Standards Institute and other relevant organisations are satisfied that the planning process is being adhered to.

Biodiversity net gain in practice

Local planning authorities will commit a developer to delivering measurable improvements to biodiversity that equate to a net gain of 10% or more, assessed by the current Defra metric. A planning application must demonstrate how net gain will be achieved on site. While it will not be enforced until 2024, some local authorities have been following the new guidance for some time. 

A biodiversity net gain assessment will cover the type of habitat on a site and may involve other ecology surveys such as a Preliminary Ecological Appraisal (PEA), or an Ecological Impact Assessment (EcIA). The Environment Act 2021 requires that the biodiversity net gain survey includes a British Standard assessment using the appropriate metric to assess the biodiversity on your site in terms of biodiversity units or statutory biodiversity credits. Your planning application may need to include biodiversity net gain information from an ecologist explaining how you will achieve biodiversity net gain to enable you to meet the planning requirements.

What is a biodiversity net gain plan?

When assessing biodiversity net gain, an ecologist will use the mitigation hierarchy to calculate the best approach to increase biodiversity on your site by the 10% required. This will involve considering the existing habitat’s distinctiveness and ecological features to calculate overall biodiversity value. They will then devise a biodiversity net gain approach to satisfy the local authority that the development project is within the policy guidelines by showing exactly what units will be created and the relevant timescale.

The mitigation hierarchy consists of the following factors:

Avoid

Retain habitat, i.e., select sites with low ecological value.

Minimise

Redesign a scheme to limit the land used with natural existing habitats; also alter the timing of development to account for wildlife, for example, bird breeding seasons.

Restoration

Improve the condition of the wildlife habitats on the existing site.

Offset/compensate

Where impact is unavoidable, deliver additional biodiversity improvements off-site, but as close to the original site as possible. The further away, the more biodiversity units will need to be purchased.

If it can be proved that none of the above are possible, the last resort option is for the developer to buy statutory credits from the government.

What if applying the 10% net gain will make your development unviable?

If your biodiversity gain plan indicates that you don’t have the Gross Development Value in your site to redesign it to meet the unit requirements, you can buy biodiversity net gain credits to use off-site through a process called `off-site compensation’.

Biodiversity net gain off-site credits

An example of this in practice is if land owners with land suitable for nature regeneration want to create a new income stream from it, they can link up with a developer who is unable to deliver on-site net gain and is seeking land that will enable him to provide off-site compensation. An arrangement can be drawn up to suit both parties and satisfy national policy.

Steps in this process:

1 Ecological assessment.

A landowner interested in getting involved with biodiversity net gain should get their land appraised by an ecologist using the Defra biodiversity metric 4.0 to assess the level of biodiversity net gain units present. Then, a net gain plan must be drawn up to show how many units are available; the difference between the two is the number of units available to sell.

2 Legal agreement.

A mandatory nature conservation covenant of at least 30 years must be written into a legal agreement detailing the net gain plan via provisions in section 39 of the Wildlife and Countryside Act 1981. The land owners and their successors in title are bound by covenant to ensure the new units created are successful; there is a recovery provision if the biodiversity net gain plan is not adhered to. The ecological assessment and net gain management plan are usually appended to the agreement. Local planning authorities, public bodies, and other organisations are allowed by the government to become a `responsible body’ and create a conservation covenant. Gov.uk launched the official process for those wanting to get involved with supporting conservation covenants in July 2023.

Conservation covenants and responsible bodies.

A responsible body is required to monitor a biodiversity net gain project to ensure it meets agreed aims; this can be a local authority, a public body or a charity, or a non-public body that relates to conservation. Responsibilities include the registration of conservation covenants on the local authority land charges register and the submission of annual returns for all covenants the organisation holds.

3 Regulation.

With a plan and legal agreement in place to deliver biodiversity net gain, the regulator or local planning authority can be approached. If it accepts that the net gain is achievable, it can officially certify the biodiversity units in question.

4 Credits.

Once credits (or units) have been recognised by the local authority, a landowner can sell them on the open market: the price is determined by fluctuations in this market. Land agents and specialist brokers can connect landowners and developers wishing to buy and sell units.

Statutory credits.

The mitigation hierarchy dictates that biodiversity net gain units should first be implemented on-site, with off-site work only taking place where this is not possible. If the off-site option is not available, which is very possible given the requirement that certain types of habitats have to be replaced by the exact same type, the government has introduced a solution called the Statutory Credit. The equivalent of a biodiversity net gain unit, these can be purchased from the Secretary of State when there’s no other viable option, and the developer must prove this to the local planning authority. They can then buy credits from Natural England to have their planning application signed off. Projects to supply these credits are now in progress, including some large-scale pilot schemes. These credits are designed to be set at a much higher price than the average expected unit price.

5 Planning permission.

A property developer may have conditions or a Section 106 agreement attached to their planning approval for sites that don’t qualify for an exemption. This is to ensure that the developer complies with the biodiversity net gain plan and it’s underpinned by the threat of enforcement of legal action. Buying credits certified by a planning authority from a landowner releases a developer from any Section 106 agreement or conditions of planning consent.

6 Obligations after purchasing credits.

While buying the credits and settling any legal costs frees the developer from further obligations to mandatory biodiversity net gain, the landowner must ensure that the net gain plan is adhered to according to the covenant: income from the sale can be used for this purpose. If the terms of the agreement are not met, i.e., realisation of at least 10% net gain at the end of the covenant, with the land maintained for at least 30 years, the recovery provisions in the legal agreement mean that the local authority can take action against the landowner.

And finally

If the onset of biodiversity net gain has made you start thinking about how this change in planning policy might impact your approach to development, the first step would be to consult an established ecological consultancy with experience in this area. Having an understanding of the overall biodiversity value of your site will enable you to work out your biodiversity net gain approach.

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