Biodiversity Net Gain – Where are we now?

By now, all developers will be keenly aware of Biodiversity Net Gain (BNG). BNG was identified by the Government as an innovative way to keep England green, maintain our stunning landscapes and protect our diverse wildlife. BNG offers an ambitious tool for ensuring future generations benefit from the countryside that we enjoy today, and the rationale behind it is largely supported. However, as with any new initiative, BNG is not without its barriers.

In this article, Joe Millar, solicitor in our real estate team, and Richard Nixon, head of natural capital, take a look at the current state of play, explaining some of the main barriers and opportunities associated with BNG.

How to increase BNG

To put the new complex planning requirements for development succinctly: Developers must deliver a BNG of 10% on any development. This means a development must result in more, or better-quality, natural habitat than was there before.

This can be achieved in three ways:

1.     Enhancing planned development sites with wildlife areas (think bat-boxes, bird-boxes, fox-boxes; think green-land, grass-land, wet-land);  

2.     By buying units from central Government;

3.     (Most commonly) by buying units from other off-site suppliers, such as landowners and fledgling BNG banks. This third option has created an opportunity for landowners seeking to diversify and generate a potentially passive income stream without selling off land for development.

BNG barriers

For BNG, biodiversity value is measured in standardised biodiversity units. A habitat will contain a number of biodiversity units, depending on things such as its size, quality, location and type. An ecologist will be required to measure the value of a unit (and any existing habitat on-site that is to be offset) and advise on any suitable habitat creation or enhancement methods for the land.

Research by the Home Builders Federation (HBF) found that up to 98% of SME builders surveyed found implementing the new BNG requirements a challenge. There are several possible reasons these challenges are being seen, such as a lack of available land in some areas and uncertainty about what constitutes an acceptable habitat.

Another major barrier is that many local authorities simply don’t have sufficient in-house ecological expertise to assess BNG adequately. At the turn of the year, nearly 40% of local authorities did not even have access to in-house ecological expertise.

In Cumbria, the recent move from the previous local authority set up to the new, two unitary authorities of Cumberland, Westmorland and Furness Councils has seen transition changes exacerbate capacity and expertise shortages. There just simply aren't enough ecologists to keep up with the new demand created by BNG requirements in development.

However, purchasing units from off-site non-governmental providers presents an alternative solution.

Off-site opportunities

While developers face challenges with implementation, landowners have been presented with an opportunity to generate income from their property. This doesn’t necessarily present as the rolling meadows that might spring to mind; there can also be value generated on former industrial sites and in other urban areas.

In order to set up land for BNG units, the required 10% increase in BNG will need to be demonstrated. An ecologist (popular, aren’t they?) must assess the land’s baseline value using the DEFRA Biodiversity Metric to calculate the potential gain, then set up a habitat enhancement plan to achieve the gains needed. Compliance with this plan is secured by a s.106 planning agreement with the local authority or a conservation covenant with a Responsible Body registered with DEFRA. A BNG project then needs to be registered with Natural England on the Biodiversity Gain Sites Register, before the units can be sold to developers on the open market. Once registered, a landowner is free to sell units to developers looking to secure off-site BNG. If a development is still going through planning, often this purchase will be preceded by an option agreement, with the developer essentially reserving the units until such time as planning is secured.

A BNG unit will need to be maintained for a period of at least 30 years. There will be ongoing site management and monitoring, secured legally as just mentioned.

Legal landscape

Option agreements, BNG purchase contracts and BNG agreements (such as section 106 agreements) are technical and complex legal documents. What’s more, for a landowner looking to establish BNG units, there is a stringent statutory framework that will need to be followed.

At Muckle, we have all the legal expertise you will need to negotiate the developing BNG world, and we work closely with land agents who specialise in BNG to guide you in the right direction. If you believe you have land suitable to set up BNG units, get in touch and we can support you through the process.

For more information on navigating barriers to BNG, contact Joe Millar on [email protected] or  0191 211 7883 or Richard Nixon on [email protected] or 0191 211 7924.