After a lengthy gestation, and following its inclusion in the Queen’s Speech, the Environment Bill is back on the agenda, this time with a real possibility of making it onto the statute books. But what are some of the measures most likely to impact on the development industry?
Biodiversity gain
The principle around biodiversity gain is simple – developments should leave sites in better shape than when they started, in terms of biodiversity. Accordingly, most developments must achieve a 10% improvement in biodiversity, assessed using a biodiversity metric which will assess a habitat according to its value to wildlife, condition, and size. While Defra has indicated that there will be certain specific exemptions for some brownfield sites, details of these will be in secondary legislation.
Details of how biodiversity gain will be secured must be set out in a biodiversity gain plan, to be approved as part of a relevant planning application, and the bill imposes a deemed condition on planning permissions requiring these plans to be approved before development can commence. While there’s scope for a different approach to be adopted for outline phased developments, the details of that will follow in regulations.
In achieving biodiversity gain, the NPPF hierarchy of mitigation will still apply: avoiding harm on site; delivering additional on-site mitigation; off-site mitigation; then, as a last resort, payment of compensation by way of credits.
To ensure that there is always an appropriate way to deliver biodiversity gain, the bill enables the government to set up a system of credits. The income from these credits will be used for works (or to acquire land for works) for habitat enhancement. These credits must be bought before the biodiversity gain plan can be approved, therefore before development can start on site.
When setting the cost of credits, one of the factors for the government is the need to not disincentivise the registration of sites to deliver biodiversity gain. In short, don’t expect this to be a cheap option.
All gains on or off-site must be secured for at least 30 years, by way of condition, planning obligation or conservation covenant (see box).
Green is the new black
While this may seem like a significant extra burden, there are some benefits for developers.
It is clear that the requirement of betterment is likely to add to delivery costs. Added to this is the extra expense of carrying out the additional assessments and agreeing the biodiversity gain plan with the local planning authority. However, since the NPPF was amended so that planning policies and decisions “should” enhance the environment, including the provision of net gains in biodiversity, in reality many local planning authorities, emboldened by the contents of the bill, have already been requiring something similar. At least now there will be legal certainty, and a formalised structure to deliver the biodiversity gain required.
And there is no denying the importance of both environmental measures and access to open space to the public. Careful planning to incorporate biodiversity gain within the development and on-site, as well as a considered approach to off-site mitigation, could not only reduce the financial impact of the requirement and make the development more attractive to occupiers, but could also offer reputational advantages for schemes – often so important when trying to secure support at the planning stage.
Identifying local requirements
The bill also requires the production of various strategies. For species conservation strategies and protected site strategies, local authorities must work with Natural England to create policies to help conserve and enhance certain protected species and sites. Local planning authorities must have regard to these policies when determining planning applications, adding an extra layer of environmental consideration for developers to navigate.
Local nature recovery strategies, on the other hand, could directly impact landowners and developers. Here, local authorities must identify priorities and opportunities for recovering or enhancing biodiversity, mapping out areas which are or could become of importance for biodiversity, or where recovery or enhancement of biodiversity could make a particular contribution to other environmental benefits.
It is this forward-looking aspect which concerns some. Unlike the protected site strategies, the areas forming part of the local nature recovery strategies need not already be subject to a designation and could include land otherwise appropriate for development. Although there is no express bar to developing land included within a local nature recovery strategy, inclusion could make securing planning permission more difficult. Landowners and developers alike should engage in the process for adopting these strategies, to ensure that they do not hinder future proposals.
While these extra layers of environmental protection may cause a headache for developers, they could turn out to be a real opportunity for some landowners. Land unsuitable for development now has a potential new use – as biodiversity gain sites. If deals can be done with developers to provide the location of their off-site mitigation, suddenly these areas give rise to a potential new income stream.
Introducing oversight
Another headline grabbing measure in the bill is the establishment of the Office for Environmental Protection. The OEP will be an independent body, responsible for holding public bodies to account for their environmental responsibilities, and its introduction is seen as a key step in plugging the gap in environmental enforcement created by Brexit. There remain concerns, however, about its impartiality, given that the government can issue guidance to the OEP, to which it must have regard when preparing its enforcement policies.
As the OEP is unlikely to be involved in individual planning decisions, many developers will have little direct involvement with it. However, the OEP’s oversight function is intended to ensure that local authorities are rigorous in discharging their duties, which may in turn lead to greater demands on applicants. For example, the requirement on local authorities around reductions in fine particulate matter will almost certainly increase focus on air quality at the decision-making stage.
Still scope for change
It’s worth remembering that there is still scope for the bill to evolve while it completes its journey through parliament. Indeed, as recently as 19 May, the government tabled further changes, including a power to “refocus” the Conservation of Habitats and Species Regulations 2017 to better reflect national priorities, instead of those set by Europe. While this is being touted as a Brexit-related freedom, until we know where the protection is refocused, it’s not clear whether this will, in fact, make life more difficult for those developing in the vicinity of protected habitats.
Is anything still to come?
Changes to the environmental impact assessment regime are not included in the bill and will instead be addressed in the forthcoming Planning Bill. While this isn’t surprising, it does mean that even when the Environment Bill becomes law, we won’t have a clear view on how the environmental impacts of development will be considered for some time yet.
The bill returned to the Commons on 26 May, before going before the House of Lords for further scrutiny. It’s currently anticipated that Royal Assent will be achieved during the autumn, with many measures not expected to take effect until 2023. However, although these measures aren’t likely to take effect until then, it is certainly clear that assessing the environmental impact of a development is going to be of increasing importance going forward. Taking time now to consider and embed environmental measures into development schemes will pay dividends in the years to come.
Conservation covenants
Agreements to be entered into by landowners and “responsible bodies” (a public body or conservation charity), conservation covenants:
- will set out measures to conserve, protect, restore or enhance natural or heritage features;
- will contain measures which can be either negative or positive;
- must be intended to be for the public good, such as allowing public access;
- will bind the land to which they relate;
- can be entered into by freehold owners or those with an unexpired lease for a fixed term of at least seven years; and
- unless they provide otherwise, will last indefinitely, or until the end of the relevant lease.
Hannah Quarterman is a partner and head of planning at Hogan Lovells
