Biodiversity net gain is real – some points of interest.
After a couple of delays, the government has finally implemented legislation that made biodiversity net gain mandatory from 12 February 2024 for larger permissions and 2 April 2024 for smaller ones. This article looks at some issues that this throws up.
NSIPs later, or are they?
For Nationally Significant Infrastructure Projects (NSIPs) requiring consent under the Planning Act 2008, the expected date of introduction is not until November 2025, when many of the teething problems with the introduction to the town and country planning system should have been ironed out.
In fact, though, applications for consent for NSIPs are already being asked to set out what impact they are having on biodiversity using the official metric and are coming under criticism if they do not provide at least ten per cent net gain under each of the three different area, hedgerow, and watercourse metrics. While the rules about trading between them (you can’t offset a bigger gain under one metric against a smaller one under another) are being generally enforced, so far consideration doesn’t go any deeper than that, such that the full set of detailed rules surrounding BNG are not being examined, rather just the ten per cent gain is all that is needed.
Is BNG on the plus side of a planning decision?
There was an interesting court case (Saredon Aggregates) about a solar farm where a planning refusal was overturned because an inspector wrongly referred to the future requirement for BNG when it was not yet mandatory. However, in doing so the judgment implies that once a minimum of ten per cent BNG becomes mandatory, that will be the baseline and will not be considered a benefit of a project. It remains to be seen whether that position will actually be the case once BNG really is mandatory. Anything over ten per cent would be an additional benefit (unless the local planning authority’s policies required it – see further below).
Help for developers
While the government is providing some funding to local authorities to cope with the new regime (although inevitably not enough), its assistance to developers is fairly scanty, consisting of no money and a fairly limited amount of guidance only a couple of months before the regime comes into force. In my view there are still some unanswered questions about ‘significant’ and ‘non-significant’ onsite habitat improvements (only the former of which count towards the metric) and how deliberate degradation of habitat to lower the score for the effects of the development is to be handled. Probably the most comprehensive explanatory document for those affected by BNG is the draft additional ‘planning practice guidance’.
Unlevelling the playing field
While ten per cent BNG is the legal minimum that must be provided, local authorities can have additional policies on top. For example, Cambridge City Council already has a policy of 20 per cent BNG and others, such as the London Boroughs of Kingston-upon-Thames and Tower Hamlets are considering 30 per cent. Another policy that adds a gloss to the statutory regime is requiring any offsite BNG to be within the local authority’s area rather than anywhere in England as the legal requirements allow (although the biodiversity unit score of a site is halved if it is more than one local authority away from the development site, so a site twice as large will be needed).
If developers are able to shop around as to where they site their developments, will this unequal policy landscape deter them from local authority areas with more onerous obligations? This is likely to come down to what impact such differences will have on development costs for them to carry more weight than other factors. This in turn will depend on the market price for offsite biodiversity units.
So far, the only publicly available information is the cost of the government’s last-resort biodiversity credits, which act as an effective ceiling for biodiversity units on the open market, since no-one will buy units that are more expensive than credits. The credit prices also give an idea of the likely relative cost of units depending on the habitat concerned, in line with the relative cost of credits. These vary widely from £84,000 per unit as the lowest price to a whopping £1.3m per unit for the rarest habitats for which credits can be purchased (habitats of the highest distinctiveness cannot be bought off with credits and will have to be offset with bespoke compensation).
Conclusion
A policy as wide ranging and complex as BNG will have all manner of implications, many of which are unforeseeable, however, there are some developments which we can realistically expect. One negative consequence is that BNG will become another weapon in the NIMBY armoury, allowing those who oppose new development to claim that the project does not provide the required ten per cent increase, and therefore must not be granted planning permission. This will probably continue, but developers already must deal with objections on many different grounds, so they will adapt to deal with these challenges too.
Two issues which will present problems initially are the differences in how well-prepared local authorities are, and the availability of offsite BNG land. Poorly funded local authorities may struggle to find the necessary ecologists to assess the biodiversity of developed and offsite BNG land, and it will take time to fill this skills shortage. The availability of BNG land for purchase by developers will be limited initially, as landowners have not yet fully embraced this opportunity and a marketplace needs time to develop, but this is likely to be a short-term problem, as landowners quickly realise that there is a gap in the market which they are opportunely placed to fill.
By Angus Walker
Angus Walker is Partner, Planning & Infrastructure, at BDB Pitmans. Angus is a member of, and formerly chaired, the National Infrastructure Planning Association as well as being a member of the Planning and Environmental Law Committee of the Law Society.
BDB Pitmans has over 60 partners operating from four locations: London, Cambridge, Reading and Southampton. It offers clients strength and depth across practice areas including energy, transport, real estate, and technology and innovation.