In this article, Duncan Williams, principal associate at Eversheds Sutherland (International) LLP explains how Government plans for biodiversity net gain will impact the future of the construction industry
The Government has announced new developments will be required to demonstrate a 10% increase in biodiversity net gain on or near development sites. Robert Baden-Powell in his last message to his followers famously said ‘try and leave the world a little better than you found it’.
While we might hesitate to describe our recent Government(s) as boy scouts, they do however, seem to have taken the message somewhat to heart. At least in some respects.
What is biodiversity net gain (BNG)?
Biodiversity Net Gain or ‘BNG’ is the process of leaving habitats for wildlife in a measurably better state than they were before development was carried out.
BNG in its current guise forms part of the Government’s 25-year environmental improvement plan and originated in a 2018 consultation that showed industry support for greater biodiversity protection.
This was followed up in Spring and Summer 2019, in a series of statements confirming it would be mandatory for all new development in England to show biodiversity net gain in order to be granted planning permission. This requirement was put on a statutory footing in the Environment Act 2021, albeit with a delayed ‘in force’ date of November 2023.
What does the new biodiversity requirement entail?
The requirement is for all developments to achieve a 10% biodiversity net gain increase against the pre-development biodiversity value (measured using a standardised metric). This gain is to be secured for at least 30 years through a biodiversity net gain plan and can be delivered onsite, offsite through a registered gain site or, as a last resort, through the purchase of credits.
A noble aim, designed to not only halt the loss of important habitat going forwards but also to reverse damage already done by creating new habitats. It is the latter part of this initiative that potentially creates some issues of concern. As consuming one’s own smoke is one thing, but a requirement for developments to account for the sins of their predecessors? Perhaps the planning system is overreaching here.
With BNG set to be secured and regulated through the imposition of a planning condition and potentially through the use of s106 we also have the thorny (and perhaps conveniently ignored) question of whether such a requirement meets the relevant NPPF paragraph 56 and Regulation 122 tests:
Necessary? Perhaps if policy stretches the concept and says it is.
Relevant to the development? Avoiding no net loss maybe, but providing a 10% increase on pre-development value is more difficult to reconcile.
Reasonable in all other respects? A flat 10 percent requirement regardless of the development type and size by its nature does not sit comfortably here.
The requirement also lends itself better to certain type of developments than others. A new housing scheme can more readily accommodate the requirement on-site, but how about 25km long linear pipeline installation?
Biodiversity net gain is an expensive route
While the requirements do allow for the purchase of credits in lieu of on-site provision, developers will be (intentionally) financially penalised for going down this route through above market value costs in an attempt to ensure the gains can be accommodated elsewhere.
Likewise securing offsite BNG at a registered and allocated site (the third option) is likely to prove, in many cases, more expensive than on-site provision. The unfortunate consequence of this approach though is that developments which cannot by their nature accommodate their own gains might be unfairly hit.
BNG is also proving itself to be the polar opposite of the roll out of the Community Infrastructure Levy (CIL) in that many local authorities already have policies in place before the statutory provisions come into force in late 2023. The contrast with CIL is striking, with many authorities still lagging behind with no framework in place years after the levy was first introduced.
The two-year transition period was always designed to allow sufficient time for the industry to prepare for increased costs and requirements associated with BNG. This considered approach is now somewhat undermined with many Councils having policies already in place.
Achieving BNG is not yet an obligation under the Planning Act 2008
The requirement is also to apply to Nationally Significant Infrastructure Projects (NSIPs). The draft National Policy Statement’s encourage applicants to seek opportunities to contribute to and enhance the natural environment by providing net gains for biodiversity where possible, even though achieving biodiversity net gain is not yet an obligation under the Planning Act 2008.
In what appears to be the first of its kind a recent DCO decision authorised the compulsory purchase of land for BNG purposes on the basis it was an important part of the Landscape Biodiversity Management Plan. The case demonstrates that it is necessary to develop a clear strategy as to why the BNG land is required and where possible ensure that the need to obtain it is secured through a DCO requirement/condition.
There is, however, a pressing need to update compulsory purchase guidance in respect of the BNG requirement and to provide express confirmation of the ability to use the powers for this purpose. This guidance needs to come forwards ahead of the BNG requirement coming into force and to avoid any unnecessary consenting delays in the interim.
Other BNG details still being ironed out include what types of developments should be exempt from the requirement (e.g. de-minimus projects) and exactly how best to deal with phased sites. These issues (amongst others) were the subject of a recent January 2022 consultation, for which, at the time of writing we await the results.
In the meantime all developments need to start engaging with the requirement, ideally during site selection. The obvious point being that it is far easier to design a scheme from the outset with the requirement in mind than it is to try and add it in later.
For those landowners and developers with a keen eye on an opportunity, the process of identifying and acquiring potential net gain sites should be well underway and with a view to registering them for later allocation/sale to those in need of off-site provision. All that is needed, is to establish the baseline value of the site, carrying out any habitat improvement works and then flip the asset to secure a tidy profit down the road.
Finally then, we should return to the full quote from Mr Baden-Powell: “Try and leave this world a little better than you found it and when your turn comes to die, you can die happy in feeling that at any rate you have not wasted your time but have done your best. ‘Be Prepared’ in this way, to live happy and to die happy”
In a world where development pressure and environmental issues seem to be increasingly on a collision course, perhaps instead we should all “be prepared” for the arrival of BNG and aim to minimise the costs and delays resulting from yet more Government red-tape.
Duncan Williams
Principal Associate
Eversheds Sutherland (International) LLP
