The impact of the biodiversity net gain requirements on developers

Biodiversity net gain (BNG) is an ambitious government strategy for creating and improving natural habitats for wildlife, with the aim of making sure that such habitats are left in a measurably improved state following development than they were before development. For most sites in England, BNG is mandatory under schedule 7a of the Town and Country Planning Act 1990 (as inserted by schedule 14 of the Environment Act 2021) and also amended by the Levelling Up and Regeneration Act 2023. 

The requirements

Developers of the land are required to deliver a BNG of at least a 10% increase of the biodiversity value found on the site prior to its development. For the purposes of measuring BNG, biodiversity value is measured in standardised units of habitats, including grassland, hedgerows, lakes, woodland, trees and watercourses (such as rivers and streams). Habitats will have measured numbers of biodiversity units depending on a number of things, such as size, location, quantity and type of habitat. During the carrying out of a development, these biodiversity units can be lost. When considering the biodiversity of a habitat, a developer will appoint an ecologist to measure the biodiversity of the habitat and advise on measures requiring the improvement of the habitat to meet the requirements set out in the legislation.

For planning applications submitted up to 12 February 2024, the development authorised by planning permission will be exempt from BNG.

BNG does not apply to:

• Retrospective planning permission made under Section 73a of the Town and Country Planning Act 1990; and
• Section 73 planning permission, where the original planning permission to which the Section 73 planning permission relates was granted before 12 February 2024 or the planning application for the planning permission was made before 12 February 2024.

The approval of reserved matters in respect of outline planning permission is not subject to BNG conditions as it is not a grant of planning permission. 

In addition to the above, there are certain exemptions from BNG for certain types of development, and these include:

• householder developments (e.g., home extensions, conservatories and loft conversions);
• developments subject to a de minimis exemption where the development does not impact  a priority habitat and impacts less than 25 square metres (5 metres by 5 metres) of on-site habitats or 5 metres of on-site linear habitats (such as hedgerows);
• certain types of self-build and custom build developments;
• developments undertaken mainly for the purpose of fulfilling the BNG planning condition for another development;
• any development forming part of or ancillary to the high-speed railway transport network;
• urgent Crown developments; and
• developments that are granted planning permission by a development order (including permitted development rights).

When a developer applies for planning permission (other than exempt developments), they will need to provide information as to how it intends to meet the BNG objective, including details of on-site enhancements. This will include the completed metric calculation showing the calculations in terms of the predevelopment biodiversity value of the on-site habitat as at the date of the planning application, or an earlier date, including the date of the biodiversity metric used to calculate the value. The planning authority can ask for further information to be provided in support of the BNG.

The framework for BNG has been designed as a post-planning permission matter. Every planning permission is deemed to have been granted subject to a biodiversity gain condition that the BNG objective is met. This objective is for the development to deliver at least a 10% increase in the biodiversity value relative to the predevelopment biodiversity value of the habitat. 

This increase can be delivered in one of three ways:

• on-site biodiversity gains;
• registered off-site biodiversity gains; or
• the purchase of statutory credits from the government.

Government credits provide the same function as equivalent units purchased on the open market or credited through the enhancement of on-site and off-site habitats; however, they are deliberately priced to deter use by developers. Developers may only consider the use of purchase credits in the worst-case scenario.

The biodiversity gain plan

The biodiversity net gain condition is a pre-commencement condition. Following the granting of planning permission, a biodiversity gain plan must be submitted to the local planning authority and approved by the authority prior to commencement of the development.

When considering a planning application, the local planning authority will often consider BNG as a material consideration and the authority will consider whether a BNG condition should be attached to the planning condition and the requirements for a S106 planning agreement to be entered into to secure the benefits of on-site biodiversity and off-site biodiversity, where applicable. 

The biodiversity gain plan sets out how the BNG is to be achieved. There are special arrangements for phased developments. The Department for Environment, Food and Rural Affairs (DEFRA) has published guidance on calculating biodiversity using the official biodiversity metric tool that is required to be used. The latest guidance on this tool was last published by DEFRA in July 2024. An input guide to understand the tool layout and data input is provided in Appendix A of the metric. The planning authority can only approve the biodiversity gain plan if it is satisfied that the biodiversity gain specified in the plan can be met or that any biodiversity credits specified in the plan have been purchased or that an off-site biodiversity gain has been allocated and secured to the satisfaction of the planning authority.

The plan must provide a description of the arrangements, maintenance and monitoring of the habitat enhancement for a period of at least 30 years after the development has been completed. 

The applicant has a right of appeal in respect of the non-determination or refusal of their biodiversity gain plan. Appeals may be made at any time within six months of a decision on their biodiversity gain plan or if no decision has been made within six months from the date a decision should have been made.

Conclusion

For developers, strategic and careful planning ahead in respect of the BNG requirements is vital to ensure that their development is successful development. This will include making decisions about the land to be developed and how biodiversity is to be achieved. A mitigation strategy should be carefully structured. Alternatively, a developer may wish to use land outside of its control to achieve the required BNG and collaboration agreements and/or purchase agreements may need to be put into place with third-party land owners. Developers should also consider the purchase of biodiversity units at prices they may be willing to pay if it is not practicable to provide on-site or off-site BNG. Land purchase agreements should be carefully structured to ensure that developers are not placed at risk having acquired a site for a considerable amount of money and in instances where they do not have the security of an approved plan provided by the local planning authority. 

The ongoing maintenance and management of land set aside for BNG should be carefully considered in the management documentation for the site. Developers will need to ensure that the appointed managing agent has a sufficient skill set and understanding of the BNG process to ensure that it is able to professionally manage the land required to meet their BNG obligations. Developers may require the freehold reversion (including the BNG) to be transferred to residents’ management companies following development, and the residents of the development will be responsible for maintaining the ongoing BNG management via the estate service charge.