The framework for mandatory biodiversity net gain was introduced by the Environment Act 2021 and, with less than a month to go until commencement, the regulations and guidance have finally been published. Defra has clarified that these six regulations are the “first of the regulations” to be considered and approved by parliament, indicating there are more to come.
Overview of BNG
Come January 2024, developers will be required to ensure that all new major development is not only nature-neutral, but nature-positive. The radical new statutory framework, introduced by a new Schedule 7A in the Town and Country Planning Act 1990, provides that every grant of planning permission (subject to some narrow exemptions) will be deemed to have been granted subject to a planning condition securing the biodiversity gain objective of delivering at a least a 10% increase in relation to the pre-development biodiversity value of the site.
This deemed planning condition will be imposed by statute and requires developers to submit and have approved a biodiversity gain plan before the development can lawfully commence. This plan must be submitted no earlier than the day after planning permission is granted and must be determined by the local planing authority within eight weeks (unless otherwise agreed in writing between the parties). The plan must demonstrate the strategy for meeting the 10% objective for it to be approved, and set out the post-development value, any registered offsite gains and any statutory credits purchased.
The objective can be met in three ways (or a combination of the three):
- (a) onsite: within the redline boundary of the development;
- (b) offsite: either on the developer’s land which does not form part of the redline, or by purchasing biodiversity units from a third-party landowner; and
- (c) purchasing statutory credits: as a last resort, from the government.
Any offsite or significant onsite gains must be legally secured for at least 30 years. Significant onsite gains can be secured either through a legal agreement or a planning condition. Offsite gains can only be secured by legal agreement: either a planning obligation (section 106 agreement) entered into with the LPA, or a conservation covenant with a responsible nature conservation body. This agreement must require the creation or enhancement of the habitat, and management of it for at least 30 years.
For statutory credit purchase, it must be proven to the LPA that the purchase is a last resort, and, as such, prices are set purposely or deliberately high. A multiplier will also apply, which means the developer must buy two statutory credits for every one biodiversity unit that would otherwise be needed.
Draft regulations
These draft regulations must be reviewed by the secretary of state at least every five years.
1. Biodiversity Gain (Town and Country Planning) (Modifications and Amendments) (England) Regulations 2024
Application information
These regulations amend various procedural orders to require planning applications to be accompanied by the following BNG information:
- a statement as to whether the applicant believes the planning permission, if granted, would be subject to the BNG condition (and if not, why not);
- where the planning permission would be subject to the BNG condition:
- the biodiversity value of the onsite habitat on the relevant date;
- the publication date of the metric used to calculate that value;
- the completed biodiversity metric tool calculating the biodiversity value of the onsite habitat on the relevant date;
- a statement as to whether the biodiversity value of the onsite habitat is lower than it would have been due to activities carried out in the interim and, if so, the biodiversity value of the onsite habitat immediately before the carrying out of those activities;
- a description of any irreplaceable habitat; and
- a plan showing onsite habitat, including irreplaceable habitat, existing on the relevant date.
Phase plans for phased development
New obligations are also inserted for phased permissions, being either outline permissions or any permissions granted subject to conditions that permit or require phasing.
Planning permissions which are phased will have a modified planning condition imposed on them. Instead of requiring the submission of a single biodiversity gain plan, the developer must submit:
- An overall plan which must be submitted to and approved by the planning authority before any development can begin. The purpose of this is to set up a clear upfront framework for how the objective of at least a 10% gain is expected to be met across the whole development; and
- A phase plan for each phase, which must be submitted to and approved by the planning authority before development of that phase can begin. These will set out a phase’s contribution to BNG and track progress towards the overall objective.
The regulations set out what must be included in each of these plans and list the matters that must be satisfactorily addressed in order for them to be approved by the planning authority. This should be reviewed carefully in advance of submitting any such plans.
Transitional provisions
These regulations also set out transitional provisions to which the biodiversity gain condition does not apply:
- (a) planning permission which is not a section 73 planning permission where the application was made before the date that BNG becomes mandatory;
- (b) a section 73 planning permission where the original planning permission to which the section 73 application relates was granted before the date that BNG becomes mandatory; and
- (c) a section 73 planning permission where the application for the original planning permission to which the section 73 application relates was made before the date that BNG becomes mandatory.
Biodiversity gain hierarchy
The concept of a “biodiversity gain hierarchy” is introduced as a new Part 7A to the Town and Country Planning (Development Management Procedure) (England) Order 2015. This is distinct from the mitigation hierarchy set out in the National Planning Policy Framework, and must be followed in the following order of priority:
- (a) avoiding adverse effects of the development to onsite habitat with a higher distinctiveness score;
- (b) so far as those effects cannot be avoided, mitigating those effects;
- (c) so far as those effects cannot be mitigated, habitat enhancement of onsite habitat;
- (d) if there cannot be enhancement, creation of onsite habitat;
- (e) if there cannot be creation, the availability of registered offsite biodiversity gain; and
- (f) if offsite habitat enhancement cannot be secured, purchasing biodiversity credits.
The biodiversity gain plan must include a description of the actions to be taken to apply the hierarchy, including any reasons for not following the order of priority. In determining whether to approve the gain plan, the planning authority must take into account how the hierarchy is to be applied. The hierarchy does not apply in relation to irreplaceable habitats.
The Biodiversity Gain (Town and Country Planning) (Consequential Amendments) Regulations [2024] also make some minor changes to existing legislation to bring it into line with mandatory BNG.
2. Biodiversity Gain Requirements (Irreplaceable Habitat) Regulations 2024
These regulations define “irreplaceable habitat” as: blanket bog, lowland fens, limestone pavements, coastal sand dunes, ancient woodland, ancient and veteran trees, spartina saltmarsh swards and Mediterranean saltmarsh scrub.
Where there is such irreplaceable habitat on the development, the mandatory BNG requirement is modified so the gain plan does not have to specify any offsite gain or credits purchased, but instead has to show the adverse effect of development on the onsite habitat is minimised and “appropriate arrangements” have been made to compensate for any impact. Arrangements will be appropriate only if they secure a compensation plan relative to the baseline habitat which does not include the use of biodiversity credits.
These modifications do not apply if the development is a phased development for the purposes of BNG.
3. Biodiversity Gain Requirements (Exemptions) Regulations 2024
These set out further (narrow) exemptions to which the biodiversity gain condition does not apply:
- (a) Temporary exemption for small development: until 1 April 2024.
- (b) De minimis exemption: a development that does not impact a priority habitat and impacts less than 25 sq m of habitat or 5m of linear habitats such as hedgerows.
- (c) Householder applications: applications made by householders, eg home extensions, conservatories or loft conversions.
- (d) Self-build and custom housebuilding applications: if the following conditions apply:
- it consists of no more than nine dwellings;
- it is on a site that has an area no larger than 0.5 hectares; and
- it consists exclusively of dwellings that are self-build or custom house build.
- (e) Biodiversity gain sites: developments undertaken for the purpose of fulfilling the BNG condition for another development.
- (f) High-speed rail transport network: any development forming part of, or ancillary to, the high-speed railway network.
4. Biodiversity Gain Site Register Regulations 2024 and Biodiversity Gain Site Register (Financial Penalties and Fees) Regulations 2024
The regulations make provision for and in relation to the register of biodiversity gain sites. In order to count towards meeting a developer’s BNG objective, any offsite gains must be registered on the biodiversity gain site register. This is a publicly accessible record of allocations of offsite gains linked to the development.
The register will open when BNG becomes mandatory and its operator will be Natural England, which will be responsible for determining the applications for offsite gains to be allocated on the register. The regulations set out how and when land can be registered, and how Natural England are to determine applications. They also detail Natural England’s power to modify or remove entries, and developers’ powers of appeal to the First-tier Tribunal.
The Financial Penalties and Fees Regulations allow for fees to be charged for applications to register the land on the register and allow Natural England to issue financial penalties of £5,000 where false or misleading information is provided.
Key considerations for developers
- Consider BNG early and factor this in to site selection and design. Discuss your development with the LPA upfront to establish whether the proposals are subject to net gain and receive feedback on the strategy for achieving the objective. Applicants are also encouraged to submit information about any potential planning obligations that will need to be entered into, eg the heads of terms for any section 106 agreements relating to offsite biodiversity gains.
- Budget accordingly. Meeting the mandatory BNG requirements is capital-intensive and realistic figures should be included in capex and maintenance schedules to enable delivery of onsite and offsite BNG requirements.
- Consider outsourcing liability. There are significant legal liabilities, with LPAs and responsible bodies having legal powers to bring enforcement action where there is non-compliance. Consider outsourcing liability to habitat bank providers or other brokers.
- Ensure offsite gains are secured with a legal agreement. These agreements must secure the offsite gains for at least 30 years from the date the relevant habitat enhancement is finished, through a section 106 agreement with the LPA or a conservation covenant with a responsible body. The landowner will need to commit to creating or enhancing the habitat, and managing it for at least 30 years.
- Know what can be counted as part of onsite gains. If you are already creating or enhancing habitat as part of a development, you may be able to count this towards your BNG objective being met.
- Be aware of LPA resourcing constraints. Developers should not assume that LPAs will carry out the monitoring of biodiversity gains. Resources are constrained and the review, approval and monitoring of implementation in respect of the gain plans will place extra stress on departments, which will inevitably lead to delays in grant of planning permissions, discharge of the pre-commencement mandatory conditions and approval of ongoing monitoring reports.
- Use expert ecologists. The metric is highly technical and you will need expert advice in carrying out the metric calculation to determine the pre- and post-development value of your scheme.
Rebecca Roffe is a partner and Isabel Sgambellone is an associate at CMS
