The Government’s response to BNG consultation published alongside BNG Guidance

Ahead of the upcoming Biodiversity Net Gain (‘BNG’) obligations, whereby from November 2023 applicable development must include a mandatory 10% net increase in biodiversity, Defra has now (February 2023) issued new guidance containing a number of important headlines for both developers and Local Authorities. The Government has simultaneously published their response to the BNG regulations and implementation consultation that ran last year. We have summarised the key points below:

Small Sites given grace period until April 2024

Of most significance, in an attempt to lessen initial burdens placed on Local Planning Authorities (LPAs), it has been confirmed that there will be a transition period for BNG mandatory requirements for ‘Small Sites’, which will now be enforceable five months later than originally intended, with this obligation now commencing from April 2024. Small Sites are defined as:

– For residential: Proposals in which the number of dwellings is between 1-9 on a site less than one hectare (1ha), or when the number of dwellings is not yet known, on a site area of less than 0.5ha;

– For non-residential: Where the floorspace to be created is less than 1,000 square metres, or where the site area is less than 1ha.

This phased introduction is a positive compromise for LPAs, many of whom remain challenged for resources, and can also be considered a welcome adjustment for developers, who are still awaiting final instructions from further guidance and secondary legislation. This phased introduction therefore provides developers with an opportunity to learn from the experience of larger developments and to apply best practice. It is understood that further guidance will be issued in the coming months in this respect.

Exemptions to the legislation

In terms of exemptions, development schemes that impact a small habitat (25sqm, or 5m for linear features such as hedgerows), along with householder applications and biodiversity gain sites (such as habitat land banks) will not be subject to BNG legislation. The update further confirms that small-scale self-build homes and custom house building will also be exempt. It has been clarified however that proposals within statutory designated sites for nature conservation will not be exempt.

Nationally Significant Infrastructure Projects (NSIPs)

It has been confirmed that BNG requirements for NSIPs will still come into force two years later in November 2025, to provide significant time for developers to prepare. Nevertheless, developers are encouraged to adopt BNG earlier on a voluntary basis where possible.

Biodiversity gain plan template

When the legislation comes into play in November, a new document will be required alongside applicable planning submissions called a BNG Statement, which must detail biodiversity gain in relation to proposed development. As we’ve discussed in previous BNG updates, the final Decision Notice will then include a standard pre-commencement BNG condition which will require submission of a biodiversity gain plan via a discharge of condition application to be approved prior to the commencement of development. The final biodiversity gain plan template is still outstanding. It is also understood that additional biodiversity gain information will be required for phased development to confirm how biodiversity gain will be achieved across the whole site across each phase.

Securing sites for more than 30 years

Under the proposed legislation, it is intended that biodiversity gain sites are secured for a minimum period of 30 years. In terms of next steps following the end of requisite 30-year period for the biodiversity gain site, a landowner would then be likely to be able to consider other available incentives to maintain or further enhance the site. The Government will consider how to incentivise retention of biodiversity gains once legal agreements expire.

Biodiversity units

As previously proposed in the Government consultation, any landowner or manager will be able to create or enhance habitat for the purpose of selling biodiversity units, subject to caveats including demonstrating no significant adverse impacts on priority habitats. Developers will be able to purchase biodiversity units anywhere in England, albeit the use of the units must be appropriate to the development proposal and the distance between the development and the off-site habitat must be robustly addressed in the biodiversity metric. Developers will be also able to sell excess biodiversity units as off-site gains for other development, however this excess gain must be registered.

The new guidance also identifies that a centralised trading platform for biodiversity units will not be created and that the price of units will be determined through negotiations between the buyer and seller, with price likely to vary across habitat type and location.

Habitat banking

The Government does not envisage setting a time limit on how long biodiversity units can be banked before they are allocated to a development. When biodiversity units are sold to a developer, the associated parcel of land within the habitat bank would need to be secured by a legal agreement and registered prior to approval of the biodiversity gain plan for the associated development.

The biodiversity gain site register

Natural England will assume the role as the Biodiversity Gain Site Register Operator, tasked with recording allocations of off-site biodiversity gains. Land can be registered as a BNG off-site  from November 2023 and there will be a fee for registering.

Statutory biodiversity credits

As an introductory measure, Natural England will sell statutory biodiversity credits on behalf of the Secretary of State, but this is designed to be a last resort. The biodiversity credit system enables developers to buy credits if required net gains cannot be achieved on-site or through the off-site market. These credits will then be invested in habitat creation. It is intended that the use of statutory credits is minimised with gradual phasing out once the biodiversity unit market has matured in due course. An indicative credit price will be published six months prior to BNG becoming mandatory, with the price to be reviewed bi-annually moving forwards.

Section 73 permissions and 12 month timeframe for delivery of on-site BNG

Other practical clarifications set out in the new guidance include confirmation that Section 73 permissions granted after November 2023 will not be subject to BNG requirements, providing the original permission was not. The Government also acknowledged concerns regarding the previous proposal of on-site biodiversity gains to be secured within 12 months of commencement of development being unreasonable and unachievable for more complex sites. It is therefore expected that there will be a rebuttable presumption in respect of this requirement: the starting point will be 12 months post development, with developers potentially able to challenge where this is not possible on a case by case basis. Again, further detail is expected to follow in respect of this.

LPA Funding

In recognition of the extent of excess workload placed on Local Authorities as a consequence of the proposals, the Government has announced a further funding provision of £16 million from Defra to be made available to support LPAs with this transition in terms of expanding resources and upskilling teams to increase their capacity. It is not yet clear when this funding will be made available.

Further information required

Whilst the newly published consultation outcome and Defra guidance provides further insight and some welcomed flexibility in terms of Small Sites, there remains a significant level of detail still awaited which is expected to be published in phases in the coming months.

At present, secondary legislation is still outstanding, which, in particular, will provide a clear definition of what is defined as ‘irreplaceable habitat’, and a list of habitats to be considered irreplaceable. Further stakeholder engagement will be undertaken prior to BNG becoming mandatory, including discussion on how BNG will marry with the minerals industry. It is also understood that the latest version of the tool developed by Natural England to measure BNG, the biodiversity metric 4.0 , will be made available later in 2023, which is anticipated to become the statutory metric once BNG becomes mandatory. Finally, it is understood that policy will be developed for minor development exempt from mandatory net gain (i.e. householder and de-minimis development) to secure proportionate on-site biodiversity enhancements where possible.

Conclusion

The commencement of BNG in practice will undoubtedly require an adjustment period for LPAs and applicants alike. The new guidance can be considered to provide a helping ‘stepping stone’ for the new legislation for both developers and authorities, and can be considered to provide some useful extra clarification whilst full legislation is awaited. Advocates of BNG are likely to welcome these mandatory measures as facilitating a nature boost to house building and providing a lifeline in terms of reversing species decline.

Firstplan continues to closely monitor for additional guidance and legislation expected over the coming months and we will provide further updates in due course.

-The Press Release is available at: https://www.gov.uk/government/news/new-developments-to-deliver-for-people-and-nature

-The Government’s Response to BNG Consultation is available here: https://www.gov.uk/government/consultations/consultation-on-biodiversity-net-gain-regulations-and-implementation/outcome/government-response-and-summary-of-responses

-BNG guidance is now available here: https://www.gov.uk/government/collections/biodiversity-net-gain

-Guidance on how to sell biodiversity units as a land manager is available here: https://www.gov.uk/guidance/sell-biodiversity-units-as-a-land-manager

-Guidance on Combining Environmental Payments: BNG and nutrient mitigation is available here: https://www.gov.uk/guidance/combining-environmental-payments-biodiversity-net-gain-bng-and-nutrient-mitigation

-Guidance on Biodiversity metric is available here: https://www.gov.uk/guidance/biodiversity-metric-calculate-the-biodiversity-net-gain-of-a-project-or-development

Article by Claire Stafford