Out-Law Analysis 6 min. read

'Biodiversity net gain' and new developments in England

ANALYSIS: Developing a standardised approach to delivering biodiversity 'net gain' on new developments in England, as proposed by the government, will ultimately benefit both local authorities and developers.

The government's 25 Year Environment Plan seeks to embed an environmental net gain approach in the planning system in England. This new consultation, which closes on 10 February, looks at whether, for biodiversity net gain, that approach should be mandatory for development requiring planning permission under the Town and Country Planning Act (TCPA), amongst other things.

The main proposals in the consultation are:

To mandate biodiversity net gain in all new developments in England, delivered within the existing planning and development process. The proposed approach would require developers to assess the potential harm of their plans to habitats, and to provide an overall improvement on the value of biodiversity - the consultation proposes a 10% gain in 'biodiversity units'. If the developer is unable to mitigate or compensate for the damage on site, it would be made to pay into a central fund allocated for nature improvements elsewhere in England.

The development of a new 'biodiversity unit' metric. A downloadable tool would simplify the calculation process by automating the metric calculations, with a standardised 'biodiversity unit' metric used to apply values to habitats. The tool would allow for on-site biodiversity net gain calculations, as well as calculations to determine the contribution of off-site compensatory habitat. In essence, the more biodiversity units a development destroys, the greater the level of habitat creation it has to provide in compensation - and, therefore, the greater the likely cost to the developer.

The introduction of a tariff system, where cash payments are made against any shortfall in biodiversity units as measured against the net gain obligation.

The introduction of a 'spatial hierarchy' directing where biodiversity units should be delivered (see below).

To exempt all or some brownfield sites from the requirement. Other exemptions are also suggested.

What is the government's justification for the proposals?

In the government's view, the hidden environmental costs of development are not being considered systematically and there are no mechanisms to compensate for resulting harm to the local area. In addition, the benefits of creating greener development are not currently properly understood or measured. A biodiversity net gain approach could "help to redress the balance and provide clear mechanisms and opportunities for developers to leave a legacy of environmental enhancement".

The government will only mandate biodiversity net gain if it is satisfied that it will deliver benefits for development, including greater certainty and process cost savings. The consultation sets out new proposals for how biodiversity net gain might work in practice.

Current legislation requires public bodies to have regard to conserving biodiversity, and biodiversity net gain is an established part of planning policy. In addition, the 'mitigation hierarchy' applies to development: avoiding loss of habitats and environmental features wherever possible; then minimising impacts or, if not possible, adequately mitigating (remediation/restoring); or, as a last resort, compensating for those losses. This principle is supported in the recently revised National Planning Policy Framework (NPPF), which makes it clear that planning should "identify and pursue opportunities for securing measurable net gains for biodiversity".

The consultation notes that developers and local planning authorities (LPAs) work together throughout the planning process to assess biodiversity, and to design development to avoid significant harm. However, the current system only really works well to avoid the most severe impacts on biodiversity and the best sites for wildlife, but less well to manage the gradual erosion of lower value habitats. Cumulatively, even 'insignificant' losses of habitat at a development scale add up to significant rates of biodiversity loss overall.

The fact that LPAs currently take a variety of approaches also adds to the uncertainty, and can make it challenging to reach an agreed position. Some LPAs have adopted existing metrics and mandatory biodiversity net gain policies - for example, in Warwickshire, Coventry and Solihull a system facilitated by Warwickshire County Council ensures that development leads to no net loss of biodiversity. Others rely on local plans. Some developers have made commitments to create a net biodiversity gain within development sites - Berkeley Group is quoted in the government press release - but many others do not have a consistent policy. Both developers and LPAs rely on professional advice and ecological data which can vary in quality, presentation and cost.

Voluntary approaches to the issue means an uneven development market. In contrast, a mandatory approach across England would "reduce inconsistency, provide greater certainty for developers and provide a more efficient means for LPAs to implement national planning policy whilst addressing local environmental priorities", says the consultation.

What is the government proposing?

Clear, standard metrics applying values to habitats

The proposals would be developed within the existing framework and practice for delivering biodiversity, but with an emphasis on more available and consistent centralised data, at both national and local level, to be used within the assessment and measurement process. A clear baseline from which to start assessments will be available, along with clear guidance for developers and LPAs.

Identifying opportunities for enhancement, prior to a planning application being submitted, via the habitats assessment process will allow for better development design, as this is informed by figures for biodiversity losses and gains utilising the standard metric. It will therefore be possible to demonstrate that harm has been avoided "as far as possible" and that the new green infrastructure will be "of good quality" at an early stage. The metric could also be used to "help ... anticipate the costs of achieving net gain to factor into land purchase where possible".

The existing mitigation hierarchy would continue to apply, and would operate alongside the process of achieving net gain.

How much 'gain' will be required?

The government is proposing a 10% gain in biodiversity units. It has chosen this level as "provid[ing] a high degree of certainty that overall gains will be achieved, balanced against the need to ensure any costs to developers are proportionate".

Although this 10% would be mandated, the consultation makes it clear that the government will encourage developers "that want to voluntarily go further or do so in the course of designing proposals to meet other local planning policies".

Introduction of a spatial hierarchy

A spatial hierarchy would be introduced meaning that, where possible, biodiversity units should be delivered on site. Those that cannot be viably delivered on site should be delivered locally, according to a local plan or strategy. Where suitable compensatory habitats are not available locally, then investment in "national conservation priorities" may instead take place through a tariff (see below).

National habitat mapping

The consultation proposes the creation of a national habitat mapping framework, to be used in conjunction with local habitat opportunity mapping to help meet national and local scale strategic habitat objectives and to help locate compensatory habitats. These should help LPAs and developers to identify the most suitable areas for development.

Introduction of a tariff

The consultation suggests that developers which are unable to mitigate biodiversity loss on site or to purchase the required biodiversity units locally could be required to pay a cash tariff on their shortfall when compared to net gain obligations. The price would be set at a level to encourage local habitat compensation, while also avoiding "the risk of a tariff being a too easy route to permission to degrade the site of a development". The consultation estimates a tariff set between £9,000 and £15,000 per biodiversity unit.

Currently, biodiversity obligations are usually secured via s106 obligations. The consultation considers what alternative collection models for the tariff might be preferable, and how the tariff could then be invested – whether by way of a national fund, or a model which blends a local and national approach through a % split or tariff spend.

Possible creation of a biodiversity units trading market

The consultation notes that mandating biodiversity net gain may stimulate the establishing and growth of local habitat creation markets through which biodiversity units could be traded. Developers which have delivered biodiversity units beyond what is mandatory at a site could trade or accrue the surplus units.

How long should offset last for?

Biodiversity net gain should deliver improvements that last "for the duration of a development or be established on a permanent basis", according to the consultation. Current practice suggests compensatory habitat should be actively managed for 25-30 years.

The consultation considers what mechanisms would enable the practical delivery of biodiversity net gain whilst ensuring lasting benefits. This could take the form of the creation of a minimum duration for maintenance of created or enhanced habitats by way of "conservation covenants". Landowners would enter into a legally-binding obligation with respect to their land which would provide long-term assurance that compensatory habitats will be maintained to the standard required. The government intends to review and take forward the Law Commission's proposals for a statutory scheme of conservation covenants in England.

Right of appeal

A right of appeal is proposed in relation to disagreements on the assessment of existing habitats and compensation proposals. The consultation asks whether the existing right of appeal against refusal or non-determination under the planning system is sufficient, or whether there may be advantages to introducing an additional assurance process – for example, to verify a proposed metric calculation.

Kate Brock is a planning law expert at Pinsent Masons, the law firm behind Out-Law.com.

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