Any landowner with future proposals either for development for their own purposes or for selling land for development whether by way of an Option or Promotion Agreement will need to be aware of the biodiversity net gain (BNG) requirements that will become compulsory for all planning permissions granted in England from November 2023. BNG was introduced by the Environment Act 2021 which contained provisions for a 25 year environment plan for land in England. BNG is a way in which developers are required to contribute to the recovery of nature whilst still being able to develop land. The aim is to ensure that the natural habitat is in a better state than it was before the development took place.
Apart from certain specific exemptions (for example: applications by householders and other small scale developments), all planning permissions granted in England will need to deliver at least a 10% BNG. Some Councils in Essex have already indicated they will be requiring a 20% BNG.
How is it measured?
BNG will be measured by Natural England using a specially designed metric to calculate the value of a habitat in units based on a scoring system compiled across all development sites. Based on that calculation, the metric will establish the biodiversity value of the pre-development site and by extension, the amount of habitat creation required to achieve the (at least) 10% BNG.
BNG will need to be secured for any projects for at least 30 years even though the development projects themselves are likely to exist for far longer than that. The scheme will be monitored by the Office for Environmental Protection (OEP) which is effectively a watchdog to ensure the enforcement of the new environmental legislation in England and Ireland. Local planning authorities will have to produce a report every 5 years describing action taken and the impact it has had so any planning permissions granted will be monitored to assess that the required BNG has been achieved.
What is the effect?
In practice, this means that developers are going to have to ensure that any loss of habitat for a piece of land they want to develop is avoided. If they cannot avoid the loss of the habitat, then they have the choice of either creating a separate habitat on the site or off-site. Local authorities are likely to reflect the government’s preference for an open biodiversity space to be created on-site as an integral part of the development eg. a creation of wildflower meadows with hedgerows and tree-planting.
How will BNG be delivered?
Where the developer has access to additional land, they can meet the BNG requirement offsite on land adjoining the development owned by the same landowner or on land owned by a third party; the off-site land may be some distance away from the actual development. If a developer can show that there is no onsite or off-site land that is available or suitable for the BNG, it will be possible to purchase statutory credits from the government.
Indications are that this is going to be seen as very much a last resort. The government will use the funds received from the sale of the statutory credits to invest in habitat creation in England. It is possible for developers to combine all three of these options (onsite, off-site and credit purchase) to make up the BNG required for any particular planning permission. Developers will be required to show that they cannot use an onsite option to meet the BNG requirement and will need to get approval from a local planning authority before planning permission would be granted to any off-site or statutory credit routes. Any habitat management plans onsite will also have to be approved before any building starts.
One way for developers to provide evidence of the deliverability of the BNG for the 30 year period will be to enter into a Conservation Covenant with the landowner (it does not have to be the landowner whose land has been submitted for planning permission) and a responsible body who will oversee that the conservation purposes are adhered to.
For further information on Conservation Covenants please see here.
Practical impact on developments
Landowners who have proposed schemes or any existing Options or Promotions will need to be aware of the impact of the new requirement for BNG on their development projects.
For further information on Strategic Land Agreements please see here.
For existing schemes it can have an impact on the net developable area within a site and may reduce the value that the landowner was hoping to achieve. Some Options and Promotions have provisions whereby third party land can be used but rarely will they contain provisions to use additional land owned by the landowner as part of the scheme. There is nothing to stop a landowner and a developer from agreeing such a proposal but the parties will need to be aware from the outset of their negotiations of the BNG requirements which will need to be met as an integral part of the planning process.
If a landowner is considering entering into an Option or Promotion Agreement then the issue of BNG is going to be key to the success of the project. Landowners will have to be very specific about which, if any, of their additional landholdings could be used to assist with the provision of the BNG requirements and how much input they want to have in to the approval of the overall layout and the habitat creations. Some BNG requirements and Conservation Covenants will be compatible with the landowners’ proposed use of other land and with any other environmental land management schemes in place. In other cases, BNG may require taking land out of production for 30 years and could have an impact on the ability to receive funding for other types of agri environment schemes.
As with all strategic land projects, long term planning is the key. There is potential there will be a market for providing sites for BNG although further details around biodiversity credits and how enforcement will be managed between Natural England and local authorities are awaited. Until these are clarified, it will be difficult to evaluate the benefit to landowners for them to consider using their land for off-site BNG even when they are not proposing planning on their own land.