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Cara Groves

Development and house building

The Environment Act 2021 introduced a new approach to development and planning requiring developers to leave the natural environment in a measurably better state than pre-development. The regime requires all planning permissions to be granted subject to a deemed condition imposing a requirement for a 10% increase in biodiversity, creating a net-positive impact on the natural environment.

As part of the government’s green deal plans, the biodiversity net gain (“BNG”) requirements were supposed to be imposed from November 2023. However, this was then delayed was implemented on 12 February 2024. 

The regulations apply to all new planning permissions save for those which arise from applications pending determination and submitted prior to 12 February 2024 and new applications under Section 73 of the Town and Country Planning Act 1990 to vary an existing planning permission granted before 12 February 2024.


How will the BNG plan operate?

A BNG plan which details how the gain will be achieved must be submitted and approved by the local planning authority. Crucially, this must be approved before development can commence. The requirement for BNG is a deemed condition and so exists in statute prior to the grant of planning permission. Applicants do not necessarily need to wait until grant of planning permission to discharge the condition, and can submit the BNG plan with the planning application.

The regime encourages developers to first avoid harming the environment, then mitigate and finally compensate for the losses in biodiversity. The BNG plan will only be approved if the biodiversity value on site post-development is at least 110% of the pre-development value. This is calculated based on credits assigned to biodiversity units.


The value of the land (in terms of units) is calculated using a specific metric which takes account of:

  • the types of habitat - on-site and off-site;
  • the size of each habitat parcel in hectares - or kilometres if it is linear (rivers and streams, hedgerows and lines of trees);
  • the condition of each habitat parcel; and
  • whether the sites are in locations identified as local nature priorities.


Developers can meet the requirements in three different ways:

  • on-site gain;
  • off-site gain – purchasing additional land and implementing processes to increase the biodiversity; investing or even buying land which has already been assigned the necessary units to achieve the overall gain;
  • purchasing credits from the Secretary of State – the credits will be valued higher than market value to encourage developers to achieve the gain via non-credit based schemes. 


How will the BNG requirement affect developers?

While the concept of mandatory biodiversity net gain sounds promising, its practical implementation presents various challenges:

  • Developers will need to conduct baseline biodiversity assessments, which require ecological expertise and an understanding of local biodiversity, making it a specialized field. Not all developers have access to in-house ecological consultants, and smaller developers may not have the resources to engage external experts. These assessments can be costly, time-consuming, and could be particularly burdensome for smaller players in the industry who have tighter budgets and smaller margins. Amongst the increased costs, this could lead to delays and increased reliance on consultants.
  • Developers must ensure that the enhanced biodiversity is maintained for 30 years. This long-term commitment necessitates ongoing monitoring and management, which can pose financial and logistical challenges.
  • Biodiversity net gain often requires dedicating a portion of the site or nearby land for habitat creation and restoration. Smaller sites, especially those in densely populated or urban areas, may face constraints in terms of land available for such purposes. This makes it a prominent challenge for developers to allocate space for biodiversity improvements. Developers may need to come up with innovative solutions to balance development with the requirement to increase biodiversity. Striking this balance necessitates careful land-use planning.
  • Developers must also be cautious when trying to find loopholes. The scheme already pre-empts the developers’ desire to scout out ways to limit their obligations. Any attempt to artificially reduce the pre-development BNG value (thereby making it easier to achieve the 10% improvement has been foreseen by the legislators which have made it clear that such attempts to subvert the requirements will be monitored and are prohibited.


Existing gaps and issues in industry knowledge

The mandatory BNG requirement is a relatively new concept in the planning and development industry. As a result, there are existing gaps and issues in industry knowledge, including:

  • Standardized Metrics: The industry lacks standardized metrics for calculating biodiversity net gain, leading to inconsistencies in assessments and reporting. Developing a universally accepted method for measuring net gain would enhance transparency and accuracy.
  • Ecological Expertise: The policy relies on developers having access to ecological expertise, which can be a challenge, particularly for smaller developers. There is a need for training and capacity-building programs to bridge this knowledge gap.
  • Monitoring and Enforcement: Ensuring that developers maintain enhanced biodiversity for 30 years requires robust monitoring and enforcement mechanisms. Without clear guidelines and oversight, there is a risk that some developers may not fulfil their commitments.
  • Cost Implications: The financial implications of BNG can be significant, and there is a need for further research into the cost-benefit analysis of this policy. Understanding the economic impact on both larger and smaller developers is essential.

The delayed implementation of the policy has provided additional time for developers to prepare for these changes and challenges. However, it is crucial for smaller developers to access guidance and support to navigate the complexities of biodiversity net gain. Government agencies and environmental organizations can play a crucial role in providing resources and assistance to ensure that smaller developers can meet the policy's requirements.


For more information on BNG plans or how our development and housebuilding experts can support you and your BNG requirements, please get in touch.


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If you have any questions relating to this article or have any legal matters you would like to discuss, please contact the development & housebuilding team.

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