Legal view: Biodiversity gains momentum

By Ged Henderson

07 Oct 2022

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New planning rules on biodiversity are set to be a game-changer for property developers and a potentially lucrative income stream for farmers and landowners.

The Environment Act 2021 has created the requirement that virtually all future building developments in England must produce at least a 10 per cent ‘uplift’ in biodiversity.

The act’s green aim is a simple one. To ensure that biodiversity is left in a measurably better state than before the development took place.

Biodiversity Net Gain (BNG) is already included in the national planning policy framework (NPPF) and must be included as a part of the planning application process, with that 10 per cent gain set to become a legal obligation for virtually all developments in 2023.

When submitting a planning application, developers will need to demonstrate how they will create that uplift and, in another significant move, maintain it for 30 years.

Biodiversity gains and losses will be measured in ‘units’ taking account of the type, extent and condition of habitats allocated to the development site. And where not enough units can be provided onsite, offsite provision can be counted. That is where the potential opportunity for rural landowners and farmers exists.

Some local authorities are already treating BNG as if it applies now and require it to be provided as part of a scheme. And a number of Lancashire-based businesses are already looking at creating specialised land banks and offering developers offsite solutions.

Susan Gutierrez-Inostroza, of Lancashire-based Legacy Habitat Bank (LHB), based in Barnacre, near Garstang, says: “If you have a development proposal that requires planning permission, it is highly likely that BNG requirements within the new environment bill will impact your project.

“However, it can be challenging for developers trying to mitigate biodiversity loss and achieve the 10 per cent gain required to secure planning approval, which should be through on-site provision as far as is possible.

“The ability to deliver on-site biodiversity is often limited and impractical, due to the value of development land being higher for housing and the chance of having enough space within the footprint of the development scheme unlikely in many cases.

“There are other challenges. For example, developers will be liable for the on-site BNG provision, monitoring, and reporting for the next 30 years, even once the site has been sold.”

Susan believes developers will increasingly look to these offsite solutions, through specialised habitat banks, using BNG credits that they can buy. She says: “We believe off-site BNG credits will be the practical way for most developers to offset their BNG uplift requirements and avoid costly time delays in gaining planning consent.”

She says that demand for those credits is expected to be high, with major development companies having thousands of housing and commercial developments in the pipeline in Lancashire alone.

LHB is looking provide a ‘turnkey solution’ for those developers, allowing them to deliver the required 10 per cent net gain by sourcing BNG units and providing ongoing monitoring, management, and reporting in line with an agreed management plan.

There is also an opportunity for landowners to receive income from their land in exchange for units and credits. For example, farmers or businesses may commit to using closed landfill sites or unused farmland to create offsite biodiversity units to sell to developers.

Susan says: “We will work with farmers and landowners to provide habitat banks for BNG unit creation and create receptor sites for protected species.

“In return, the landowner receives a financial incentive greater than could be obtained from other schemes, for example, sale and leaseback or from the sale of nondevelopment land whilst retaining ownership of their land.

“The offset land must be subject to a conservation covenant or a planning obligation to be accepted as part of a BNG. These conditions secure the biodiversity outcomes for 30 years.”

Julian Silverwood, managing director of east Lancashire-based Silverwoods Waste Management, is also looking to be an early mover in the fledgling BNG sector.

To that end, 160 acres have been bought near Stonyhurst in the Ribble Valley and a 540-acre estate, with extensive woodland, has been purchased in rural Northumberland.

Julian says both have land that is not considered prime agricultural and would be ideal for BNG offsetting, with his business committed to creating, managing and monitoring projects that boost biodiversity.

He says: “BNG is a whole new potential industry. Housebuilding is going to continue, and our aim is to be well positioned to provide a solution to numerous developers.”

Andrew Coney is partner at Preston-based rural property experts PWC Surveyors. He says he is currently talking with a lot of clients and developers about BNG and its impact.

Andrew believes there are opportunities, however he strikes a note of caution. He says: “Landowners need to be very careful. Local authorities are going to want a 30-year conservation covenant on land being used for this purpose.”

The government will keep a register of offsite biodiversity gain sites. Over that three-decade timescale the enhanced biodiversity of the land may see it become the subject of environmental protection, which means it cannot be returned to farming or any other use once the 30 years has lapsed.

Andrew adds: “It is likely that the planning authority will want to see BNG delivered in the local area and will be looking for offsetting areas within their borough.

“If you’re in an area such as Exmoor and you’ve got planning consent you are not going to be short of areas to develop BNG on. It’s a different story in places such as the London borough of Hackney. There you may struggle.”

However, he adds: “There is a market, and I’m sure that market will develop. We’re just not sure as to its extent yet. It is early days.”

Paul Walton, director of Lancashire based PWA Planning, says the secondary legislation which will provide detail on BNG does not exist at present and the biodiversity credits system has yet to be properly established.

He adds: “In time it is likely that the regulations and the associated practical solutions will exist to overcome the BNG issue and ensure that developments support the essential need to achieve net gain.

“For the time being it is another complex aspect of the planning system which adds to delay and uncertainty and which can often be used by those who would wish to prevent otherwise acceptable forms of development.”

Enjoyed this? Read more from Ged Henderson

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