Government responds to biodiversity net gain consultation

In January 2022 the Government launched a consultation on Biodiversity Net Gain (BNG) regulations and implementation. It sought opinions from the public and professionals about how biodiversity net gain could be applied to development and, at a higher level, Nationally Significant Infrastructure Projects (NSIPs).

Having received 590 responses to the consultation, the Government has considered each one and has published a formal response to the consultation. The formal response sets out the Government's current policy position on the subject and generally gives an indication of the direction in which the Government wants to move, as influenced by the consultation. This means that no changes have been made to legislation just yet.

We've summarised the key points of the response below.

Background

The Environment Act 2021 contains amendments to the Town and Country Planning Act 1990 which, once brought into force, contain the framework for BNG. Essentially it will aim to ensure that the environment is left in a better state after development than it was before the development took place and sets out that biodiversity gain plans will have to demonstrate that a 10% gain objective has been met. To facilitate this, regulations will have to be produced containing the finer detail of how BNG will work.

The January 2022 consultation sought opinions on what these regulations could do, and focused on three key areas covering different aspects of BNG:

• defining the scope of the BNG requirement, including exemptions;
• applying the BNG objective to different types of development, including phased development, small sites and NSIPs;
• how mandatory BNG requirements will work, considering biodiversity gain plans, off-site gains, biodiversity units, and habitat banking amongst other things.

Defining the scope

Regarding the scope of the BNG requirement for development under the Town and Country Planning Act 1990, the Government response indicates that:

• future regulations will contain additional exemptions to those contained in the Environment Act 2021 amendments. Exemptions will be provided for development impacting habitat below a 'de minimis' threshold of 25m² or 5m for linear habitats such as hedgerows. Householder applications and biodiversity gain sites will also be exempt. Small scale self-build and custom housebuilding could also be exempt, though that exemption needs to be defined. However, exempt development could still be subject to planning policies for minor development that seek biodiversity enhancements;
• sites designated for nature conservation will not be exempt, but policy will be used to ensure BNG cannot be used to justify unacceptable developments on such sites;
• secondary legislation will define "irreplaceable habitat" and separate provisions will apply to such habitats largely driven by policy and guidance, i.e. the 10% gain objective will not apply (it will be replaced with a requirement for appropriate compensation) and biodiversity credits cannot be used to compensate for residual irreplaceable net losses.

Applying the BNG objective to different types of development

Part 2 of the consultation looked at how BNG would work with different types of development. The Government response sets out that:

• additional biodiversity gain information setting out how gain will be achieved will be required for outline planning permissions or development that is permitted in phases;
• phased development will also be subject to a condition that requires the approval of a biodiversity gain plan before each phase begins;
• policy will be used for Reviews of Old Minerals Permissions instead of BNG, due to the complexity of applying new approaches to old permissions;
• small sites will be given a metric for developments which meet its 'size' and 'absence of priority habitats' criteria. This is expected to apply to small sites from April 2024. 'Small sites' are defined in the consultation response; non-residential small sites are sites where the floor space to be created is less than 1,000 m² or where the site area is less than one hectare;
• further process simplifications for small sites, as suggested by respondents to the consultation, will be explored by the Government;
• BNG will be applied to NSIPs without broad exemptions, other than new provisions for development on irreplaceable habitats. This is expected to apply to NSIPs from November 2025 to allow developers time to prepare for the change. A draft biodiversity gain statement for NSIPs is expected later in 2023 ready for consultation with the industry;
• off-site gains for NSIPs will have to be recorded on a biodiversity gain site register;
• the NSIPs approach will be kept largely the same as the 'normal development' approach in that the applicant will have to clearly demonstrate that the BNG 10% gain objective has been met;
• if a site has been recently cleared of habitats before ecological assessments take place, the Government intends to set an earlier baseline value as if the habitats had not been cleared;
• NSIP off-site biodiversity gains will have to be maintained for a minimum of 30 years.

How mandatory BNG requirement will work for development

Finally, Part 3 of the consultation explored how the BNG requirement might work for development under the Town and Country Planning Act 1990. The Government has stated that:

• biodiversity gain information, in the form of a statement, will have to be provided alongside a planning application before a biodiversity gain plan is then submitted for approval;
• it is going ahead with proposals to issue guidance on what constitutes appropriate off-site biodiversity gains for certain developments, although on-site gains will be prioritised over off-site gains;
• it is intended that the minimum period for which biodiversity gain sites must be secured will be 30 years. This will not be reviewed before 2026. As such, landowners should bear this in mind when offering their land for biodiversity gains;
• there was overall support for the idea that any landowners or managers can create or enhance habitat for the purpose of selling biodiversity units, as long as they meet policy requirements;
• developers who exceed their biodiversity gain objectives will be allowed to sell the excess biodiversity units as off-site gains for another development, as long as the excess gain is registered and there is genuine additionality for the excess units sold;
• the Government will not develop a trading platform for biodiversity units. It will be for the buyer, seller and any other parties to agree payment terms;
• habitat banking is a possibility. Basically, any habitat created or enhanced after 30 January 2020 will be eligible for registration and sale of the associated biodiversity gains as long as it meets other criteria of the biodiversity gains register. There won't be a time limit on how long biodiversity units can be banked before they are allocated to a development;
• Natural England will be responsible for establishing and maintaining a Biodiversity Gain Site Register used to record allocations of off-site biodiversity gains to developments. This will be made publicly available. On-site gains won't be registered as this will be a duplication of information submitted to local authorities during the planning stage so it will already be on a public register;
• habitat management and monitoring plans will have to be provided as part of site registration, and must be secured by the legal agreement which secures the gain site;
• Natural England will be allowed to charge a fee to register biodiversity gain sites. The fee is expected to be between £100 and £1000;
• applicants will be allowed to appeal if their application for registration of a gain site is refused;
• BNGs will be managed through planning obligations or conservation covenants, or a combination of the two. Net gain will therefore be enforced by local planning authorities, and such authorities will receive additional funding to allow them to prepare for mandatory BNG.

In addition, respondents made several suggestions about the proposed content of biodiversity gain plans. They suggested, amongst other things, that more information should be in the plan about the future management of biodiversity and that it should make greater reference to existing industry guidance. The Government has promised to take all of the suggestions into consideration when designing the final biodiversity gain plan template.

Next steps

It is expected that mandatory BNG will come into force in November 2023, subject to some transitional provisions for some developments, such as NSIPs. Any required changes to the national policy will be subject to a consultation in due course.