Member Article

New biodiversity net gain (BNG) requirements are set to be enforced in November 2023, giving developers and the wider real estate industry less than 12 months to prepare.

The legislation will require all new developments in England, bar a few exceptions, to deliver at least 10 per cent BNG – impacting commercial and residential developers.

The requirements form part of the Environment Act 2021, which received Royal Assent in November 2021. Secondary legislation will enable the relevant provisions to take effect and require that the natural environment is left in a better state than it was pre-development.

This legislation is likely to pose new financial and operational challenges for developers. It is, therefore, critical that they realise the extent of these changes and ensure they are prepared when it comes to how biodiversity will be measured, and the routes to achieving net gain.

Current status

There is currently no legal requirement to deliver at least 10 per cent BNG.

The National Planning Policy Framework does require local authorities to consider opportunities for contributing to and enhancing the natural and local environment. This is a material consideration when determining planning applications though, and is capable of being outweighed by other material considerations on a case by case basis.
Some local planning authorities are already embracing biodiversity policies, with analysis from Cater Jonas revealing that one quarter of 322 English local planning authorities had either adopted or were preparing BNG requirements in their local plans. 

Once the new provisions are in force, the minimum 10 per cent net gain will automatically have legal effect and local authorities will not need to update their plans to account for it. Some authorities may assess requiring more than 10 per cent net gain. This will need to be included in their revised policies, with appropriate justification for doing so.

Legal mechanism

A new standard planning condition will be used to secure BNG. This will be a pre-commencement condition to submit a scheme to the local planning authority for approval.

The scheme will set out how the minimum BNG target will be delivered, either onsite or offsite, with provisions for ongoing monitoring and maintenance for a minimum of 30 years following completion of development. Section 106 obligations and conservation covenants - introduced by the Environment Act 2021 - will outline how schemes will be implemented.

Section 106 obligations will most likely be used when delivering BNG offsite, where the offsite land is within the local authority’s administrative area. 

Conservation covenants can also be entered into between a landowner and a ‘responsible body’ designated by the government, with a likely use being when a biodiversity scheme is located away from the main development site and outside a local planning authority’s area.

BNG will be evaluated using the ‘biodiversity metric’ – a tool created by the Department for Environment Food and Rural Affairs. This will enable developers to calculate the biodiversity value of a site, based on its distinctiveness, condition and extent of habitats, while translating any losses and gains resulting from a development into an overall score.

The pre-development biodiversity value of a site will be compared to the post-development value, taking into account any measures a developer proposes to enhance biodiversity. The post development value must exceed the pre-development value by at least 10 per cent.

Developers will need to monitor the delivery of BNG, with local planning authorities having a duty to report on BNG delivery for their local area. 

Onsite or offsite

BNG can be delivered either onsite or offsite, or through a combination of onsite and offsite solutions. This follows the recognition that BNG cannot always be provided fully onsite.

The Environment Act 2021 introduces ‘biodiversity gain sites’ as a means of securing the delivery of BNG offsite. A market is to be created to bring forward suitable sites for BNG purposes, which will supply ‘biodiversity units’ through a national register run by Natural England. Landowners will be able to enhance the biodiversity of their land to a sufficient standard and register it as a biodiversity gain site worth a certain number of units.

Until this market is established, or where there remains a shortfall, developers will be able to purchase biodiversity credits from the government – avoiding development delays. Prices may, however, be set higher to encourage onsite or offsite provision in the first instance.

Developers must be taking steps now to ensure they are ready for the new BNG requirements, particularly for schemes that are likely to be consented from November 2023.

Identifying the BNG requirement of a site as early as possible, preferably at acquisition stage, should be a key consideration for developers. With the support of the metric tool and advisers, developers can evaluate what will be required to achieve the 10 per cent uplift and whether it may be delivered fully onsite or may need an offsite solution.

This due diligence will have financial implications for developers, before they even consider purchasing biodiversity units, or providing and managing net gain schemes. This may impact viability and some sites may not be worth pursuing if the requirement cannot easily be met.

It is important to remember that there are opportunities associated with BNG.

Enhancing biodiversity onsite can allow developers to protect the environment and create more attractive schemes – putting placemaking and green spaces at the core of their approach. When overdelivering on a scheme, there may also be an opportunity to sell or bank surplus biodiversity units for other schemes, as indicated in DEFRA’s consultation.

Delivering on these requirements could also provide dual benefits by enabling developers to deal with other environmental factors, including flood attenuation or nutrient neutrality. Furthermore, land promoters are able to bring a specific skillset in being able to utilise wider land promotion for BNG purposes, offering a useful ally in meeting BNG targets.

These potential opportunities must be grasped in order to protect the environment, provide a better experience for residents, and ultimately, futureproof developments for years to come.

 

Link to article