On 21 February, DEFRA published three key pieces of guidance relating to the introduction of mandatory Biodiversity Net Gain ("BNG"). Of these, two relate primarily to land managers (i.e. those who will create BNG units for sale to developers), with the third, headed "Understanding Biodiversity Net Gain" providing some key reminders for developers.
Practical Considerations for Developers
In truth there was nothing ground breaking in the guidance for developers, but it serves as a useful reminder on some key points concerning BNG.
When planning a development, the first aim must be the avoidance of loss of habitat on the development site. This will involve cooperation between those designing the site and ecologists. The guidance implies that if zero loss of habitat can be achieved nothing more needs to be done. That, however, is not the case, because in any event a minimum 10% enhancement will need to be demonstrated. Habitat compensation must be created so that the net result, when assessed against the Biodiversity Metric, will be a gain of at least 10% against the pre-development biodiversity.. This compensatory habitat can be provided on site, off-site, by the purchase of statutory credits from the Government, or by a combination of those means.
Where it is provided on site (which means strictly within the red line) it will most likely be secured by a planning condition or through a s106 agreement, depending on the authority's preference and the complexity of the particular situation. There may be opportunities for creation of habitat alongside and as part of SUDS, open space and landscaping, providing an enhanced quality of environment on the completed development as well as a cost effective solution to BNG. Future management will be capable of being secured by much the same mechanisms as for open space, provided it is maintained in an appropriate way to maintain habitat quality and development.
If it is to be provided off-site, then the BNG will have to be secured using a conservation covenant or a s106 agreement. If it is provided on land not owned by the developer, then it is likely that there will be a suite of documents required to secure the BNG. This will be likely to include a conservation covenant or s106 agreement (by which the landowner covenants, so as to bind the land to provide the BNG for at least the required minimum of 30 years) and a suitable contractual arrangement between the landowner and the developer to address questions such as remuneration and the scope and standard of the work required to create and maintain the habitat. Our colleagues Esther Round and Paul Palik are already experienced in advising in relation to these types of contract, as many landowners are already getting ready to provide BNG units to developers. The work to manage the BNG land may be carried out by the landowner, contractors for the developer or a third party, which may be the responsible body under the conservation covenant if that mechanism is used. The off-site BNG site will need to be registered as a BNG site on the BNG Register if it to be used to fulfil a BNG condition on a planning permission.
As a last resort, if insufficient on site or off-site BNG can be provided, statutory credits can be purchased from the Government. The credits will be priced so as to be an unattractive option and it will be necessary to demonstrate that other methods of providing BNG have been explored and are not available before they can be bought.
The Birketts View
Providing BNG is another hurdle for developers before planning permission can be obtained, but the guidance for land managers gives some clues as to how developers may use BNG as a way of adding value to their developments.
Some developers may be able to provide excess BNG units on site and the guidance has confirmed that excess BNG units created on site will be capable of being sold as off-site BNG for other developments. This seems likely to be welcome news and will encourage the provision of high quality, rich habitat because there will be a potential for financial reward for developers who go the extra mile on habitat creation. It may also be of considerable assistance to smaller developers or developers of constrained sites in the same locality, who may have difficulty delivering BNG on their own site.
Whilst this guidance is welcome, in order for the system to work smoothly, and in such a way that allows developers to deliver valuable habitat enhancements, it will be incumbent on the Government to ensure that the introduction of BNG is managed in such a way to provide developers with the certainty to press ahead with the actions needed to deliver.
The site register for off-site BNG, which is to go live from November 2023, will be of key importance in the provision of BNG. The fact that it is not yet live and will not be for some time, is creating uncertainty in the emerging market. The few details added now about what will be needed to register a site will be welcomed. What is really needed with speed, but for which there is still no date, is the ability for responsible bodies for conservation covenant purposes to be registered. Without them conservation covenants cannot in most circumstances be entered into and these will be a key tool for the provision of off-site BNG.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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