Biodiversity Net Gain FAQs

Questions asked by our Clients

• 1 When will BNG be mandatory?

  It is already mandatory for planning applications made under the Town and Country Planning Act 1990. The government also intends BNG to apply to all DCOs accepted by November 2025.

• 2 Does the developer have to ‘control’ the BNG land, for example by owning the freehold, or could a 30 year lease be sufficient?

  A requirement to own the freehold, or even a leasehold interest is not necessary. The key is that the provider of BNG units (who does not have to be the developer, the developer could pay someone else to provide the units) has sufficient control over the land for the requisite period of time so that it can meet the BNG requirements, and make a binding commitment for at least 30 years via either a conservation covenant or planning obligation.

  Conservation covenants are a creation of the Environment Act 2021 and have to be entered into by the landowner and a limited number of counterparties called ‘responsible bodies.’ Planning obligations are s106 agreements, which are well known already.

• 3 How do temporary planning permissions factor into the metric?

  It is proposed that temporary planning permission will not be excluded from being required to deliver BNG. However, it is also proposed that the biodiversity metric allows for temporary losses to be disregarded when the original baseline habitat is restored to the same or better condition within two years of the loss. Therefore, your BNG requirements would depend on the nature of the baseline habitat, how long the development would take to be implemented, how temporary your proposed use was and how long the metric states it would take to restore, all of which would have to total less than two years.

• 4 How will development benefiting from permitted development rights be affected, eg ports and airports?

  Permitted development (PD) rights are currently exempt from BNG requirements. A specific exemption for PD is provided for in the Environment Act 2021 (via para 17(a)(i) of Schedule 14). The government however has not ruled out applying BNG to PD in the future.

• 5 How will BNG be enforced post-development should the proposals not fulfil the required number of credits in the future?

  For onsite BNG, the site owner, who may still be developer, would be in breach of the obligation to create and maintain the habitat and could be enforced against.

  For offsite BNG it would be that land’s landowner who would be enforced against, the developer would not be on the hook once their biodiversity gain plan had been signed off.

  Planning authorities will set specific and proportionate monitoring requirements, to be secured by the planning obligation or conservation covenant via a ‘habitat management and monitoring plan.’ The landowner or developer must ensure monitoring and reporting obligations are fulfilled, or adequately delegated to another body with necessary funding. We expect monitoring to depend on the nature of the site, but a medium sized habitat creation project might require reports in years 2, 5, 10, 20 and 30.

  Ultimately, the planning authority or beneficiary of the conservation covenant will actually enforce the obligation.

• 6 If your development crosses several local authority boundaries do you get the ‘discount’ if just one is used for BNG or does it have to be them all, or in combination?

  The BNG metric requires a factor of 1 to be applied where the BNG mitigation is provided within the LPA (or National Character Area) of the development and a factor of 0.75 where the BNG mitigation is provided in a neighbouring LPA (or NCA) for the development. At present, the BNG requirement for the development in each LPA area would be calculated separately. Further clarity is awaited in relation to the provision of BNG for nationally significant infrastructure projects (NSIPs) which by their nature will often cross local authority boundaries. A subsequent consultation on the detail of the BNG requirement for NSIPs is expected shortly.

• 7 Who is responsible for scoring areas? Will there be a regulator or some sort of independent assessor? If not, scoring can be rather variable.

  The assessment of habitats will be the responsibility of the applicant with their consultant’s report to be approved by the LPA. Guidance on the assessment of different habitats can be found here, on the ‘habitat condition assessment sheets with instructions.’ Developers should be able to rely on suitably qualified experts’ opinions.

• 8 Can a promoter CPO the land required for BNG?

  The consultation document recognises that compulsory acquisition of land to provide BNG may be necessary for some nationally significant infrastructure projects but is currently proposing not to make it a specific purpose for which land can be compulsorily acquired. The general expectation is that promoters will deliver BNG within the development boundary or through the purchase of off-site biodiversity units, rather than resorting to compulsory acquisition powers. Compulsory powers may be necessary where it is required to deliver a gain in close proximity to the development site, but the promoter cannot secure the land by other means. However, if compulsory acquisition rights were being sought and there was suitable land on the biodiversity gain site register, that might defeat the case that there was a compelling case in the public interest to acquire the land.

• 9 What are the potential capital tax implications from allowing BNG on your land (ie availability of APR or BPR)?

  To oversimplify, Agricultural Property Relief (APR) is available if and only if land or buildings are used for agricultural purposes as defined in the Inheritance Act 1984, broadly in connection with the production of food. If land can be used for such agricultural purposes as well as for delivery of BNG. Useful clarification was provided on the day of the March 2024 budget that APR would generally apply to BNG.

  Business Property Relief (BPR) may be available as an alternative, but only to the extent the land is not held as an investment, or where it qualifies under the Farmer case as part of the wider activity of an estate. Unless Farmer applies, we suspect it will be difficult to claim BPR unless the provision and maintenance of a BNG site can properly be called a business activity carried on for profit.

  Government recognises that farmers need to understand these issues before committing land to habitat creation or enhancement and states ‘work is underway to provide clear guidance on this.’

• 10 How will promotion agreements and options cover BNG? Is there an expectation that a developer/promoter will seek additional land to be within the agreement with a rural landowner to allow BNG?

  It is site-specific, and in particular depends on whether the parties feel that BNG should be secured (i) onsite, (ii) offsite, or (iii) through government credits. Your question relates to (ii) and in these circumstances, yes it would be expected that the developer takes the initiative to try to find mitigation land within the vicinity in the same way as offsite SANG – Suitable Alternative Natural Greenspace, and this may captured in a ‘reasonable endeavours’ obligation in the contract. The developer would wish to recover its expenditure for securing offsite BNG land though, for example as a deductible cost in a promotion agreement coming off the sum the landowner is to receive. If there is a management company monitoring, costs could be secured by way of a rent charge payable by the householders.

  In terms of management and monitoring post-completion, we reckon this could take different forms. The developer might be required to pay a competent body a hefty endowment as is the case for some SANG. There will likely need to be mechanism dealing with the management and monitoring costs post-acquisition, whether this be a service charge or endowment.

• 11 Can farmers be paid to improve biodiversity of farmland for 30 years?

  Government proposals envisage that biodiversity improvements are delivered soon after the implementation of the development (starting no later than 12 months after being allocated to a development) and capital costs paid at that time. We doubt that complex ecological systems can be fully delivered so quickly, thought they can of course be initiated. Under the proposals sites will be monitored, and (presumably) enforcement action taken if the monitoring reveals that the specified biodiversity has not been delivered, or if the site has declined. There must be provision for the cost of monitoring, but the scheme does not appear to envisage regular payments for improvement of biodiversity over the longer term, which looks like a missed opportunity.

• 12 What else is included in the Environment Act 2021?

  BNG is one of the measures introduced by the Environment Act 2021. Other changes introduced by the Environmental Act 2021 include:

  • Establishing the Office for Environmental Protection (OEP) as the environmental watchdog to replace the European Commission
  • Requiring the setting of environmental targets
  • Introducing conservation covenants that can be used to deliver BNG
  • Allowing charges for single-use plastics

  The Environmental Act 2021 can be found here.