DEFRA published the Government response to its 2022 consultation on biodiversity net gain (BNG) implementation in England on 21 February 2023. It is divided into 3 parts, and we have set out a summary of the key takeaways from a planning perspective below.

Part 1: The scope of BNG for TCPA schemes

Exemptions

• In addition to the existing exemptions within the Environment Act 2021 (permitted development and urgent crown development) and the biodiversity metric (temporary impacts subject to restoration within 2 years and existing sealed surfaces), the Government intends to make exemptions for developments impacting a de minimis habitat area of 25m2 or 5m for linear habitats, householder applications, biodiversity gain sites, small scale self-build and custom housebuilding;

• The response clarifies that the exemptions relate to mandatory net gain and that an opportunity to secure proportionate on-site biodiversity enhancements will remain through planning policy.

Statutory designated sites 

• There is no intention for an exemption to be introduced for development on statutory sites designated for nature conservation. Policy and guidance will be used to prevent BNG being a justification for unacceptable development.

Irreplaceable habitat

The Government intends to introduce secondary legislation to:

• Set out a clear definition of irreplaceable habitat and the list of habitat types to be considered irreplaceable;

• Dis-apply the 10% measurable net gain requirement for irreplaceable habitat and apply separate information requirements that can be used by the planning authority in determining the planning application. These will include a requirement for appropriate compensation for the baseline habitat type, accounting for consequent habitat losses and gains and a summary statement of reasonable alternatives explored for the development that would avoid the loss of irreplaceable habitats and why they were not feasible.

Part 2: Application of BNG to different types of development

Phased development and subsequent applications

• Additional biodiversity gain information that sets out how gain will be achieved across the whole site will be required on a phased basis, subject to a pre-commencement condition requiring the approval of a gain plan prior to commencement of each phase. This is intended to leave discretion for local planning authorities to decide on the spread of gains throughout the phases;

• For minerals applications, the Government has agreed that reviews of old minerals permissions (ROMPs) should remain out of scope for BNG and that appropriate ecological outcomes can be achieved through existing policy and discussions with mineral planning authorities;

• For s.73 applications, the Government intends that an updated biodiversity gain plan should be required for applications that would result in a change to the post-development biodiversity value where the original permission was granted after commencement of the mandatory BNG.

Small sites 

• The Government will provide a small sites metric and associated guidance on simplified processes to ensure SME developments can engage positively with BNG and will extend the transition period for small sites until April 2024 to allow developers and LPAs sufficient time to prepare for the change. It is likely that digital tools will be provided as well;

• Small sites are defined as residential schemes of 1-9 dwellings on a site area less than 1 hectare or an unknown number on a site area less than 0.5 hectares and less than 1,000m2 of non-residential floor space.

NSIPs

• The Government intends to apply BNG for NSIPS without any broad exemptions other than provision made for development on irreplaceable habitats, to reduce the scope for confusion between different types of projects. The requirement will be in place no later than November 2025 and projects will be encouraged to adopt BNG on a voluntary basis where possible before that. A draft biodiversity gain statement for NSIPs will be produced later this year, which will make provision for an earlier habitat value to be applied as the baseline where habitat degradation has taken place since January 2020;

• NSIP off site gains will need to be recorded in a biodiversity gain site register, similar to the TCPA regime and developers and scheme promoters will need to prepare a form of biodiversity gain plan and a completed metric. No distinction will be made between on-site habitats and dedicated environmental mitigation areas included in the project boundary;

• The minimum duration for which biodiversity gains must be secured will initially be set at 30 years, subject to the requirement to keep this under review, and will be increased in line with TCPA increases. This will not apply retrospectively to existing gain sites or those which have received consent;

• The Government is not intending to make any new provisions for limiting compulsory acquisition as envisaged in the consultation, but may provide guidance on the use of reasonable alternatives to deliver net gain, given compulsory acquisition powers should only be used as a the last resort;

• For marine infrastructure being promoted through both the NSIP and TCPA regimes, the Government intends to clarify the relationship between terrestrial/intertidal and marine net gain units, ensure that intertidal and marine projects can contribute to ecologically meaningful strategic projects at larger scales, off site in the intertidal zone, align the marine licensing and planning system regimes and put in place the statutory credits system so that intertidal and coastal projects can meet their net gain obligations through payments into national projects.

Part 3: How mandatory BNG will work for TCPA

Biodiversity Unit Trading and Credit System

• Land can have multiple “staged sales” of BNG units. Where land is being enhanced pursuant to an existing legal agreement, prior to the end of that arrangement, should further enhancement be possible that would secure additional BNG units, an updated legal agreement can be entered into to secure the additional enhancement;

• Landowners can also create “habitat banks” where enhancement from 30 January 2020 can be recognised in a subsequent legal agreement and allocated to a particular development within any stated timeframe. The site would need to be registered in order to be allocated;

• Developers will be able to sell excess on-site gains within their development;

• The UK Government will not develop a centralised trading platform for biodiversity units, but Natural England will sell statutory biodiversity credits which will be facilitated though a digital sales platform. An indicative credit price is to be released around May 2023 with this being intentionally uncompetitive. There is a proposal that credit values could be linked to specific habitat types. Any revenue generated by Natural England will be invested in strategic habitat creation and enhancement projects;

• Further guidance is awaited on stacking BNG units with other payment systems such as nutrient mitigation.

Biodiversity Gain Site Register

• Natural England will be responsible for establishing and maintaining the register;

• There is a new proposal that habitat management and monitoring plans will need to be included in register. This will further assist transparency of the system;

• It is proposed that a fee of between £100 to £1,000 will be charged for applications to the register depending on site size.

Reporting and Monitoring

• There is an appreciation within the consultation response that the planning regime will be the principal enforcement mechanism;

• Funding for LPAs has been announced, with £4.18 million provided in January 2022 and further funding of up to £16.71 million to be provided to prepare for BNG provision between now and November 2023;

• For conservation covenants, there is an expectation that monitoring and enforcement activities will be reflected in the price of the BNG units.

We are currently advising local planning authorities, landowners, investors and developers on BNG, so please let us know if you have any queries on how these issues will affect developments or initiatives you are working on.