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On 30 January 2020, the Government reintroduced the Environment Bill, which is currently making its way through Parliament. Although the detail may be different when it comes into force, the draft provisions indicate the Government’s current intentions. We discuss here one of the requirements that affect development: “mandatory biodiversity net gain”.

What is “mandatory biodiversity net gain”?

Biodiversity net gain follows on from the Government’s aim in its 25 Year Environment Plan to “leave the environment in a better state than we found it”. Broadly, “biodiversity net gain”, as set out in the Environment Bill, requires development to deliver at least a 10 per cent improvement in “biodiversity value”. Biodiversity improvements include, for example, a sedum roof on a building or an on-site nature reserve adjacent to a new housing development [1].

The Government’s National Planning Policy Framework February 2019 already requires local planning authorities to encourage developers to incorporate biodiversity improvements in and around developments, “especially where this can secure measurable net gains for biodiversity” [2]. However there is no standardised approach, and the Government in its December 2018 net gain consultation proposals, considered that “introducing a transparent and consistent requirement could provide certainty, allowing developers to factor in obligations up front so that more accurate estimates of land values can be made at the point of purchase”. Moreover, this approach “could create a level playing-field for developers”.

How are the measures in the Environment Bill intended to work?

Before commencing development, a developer will need to submit, and a planning authority will need to approve, a biodiversity net gain plan. This plan must include, amongst other matters, details of how the biodiversity value has been calculated, and how the net gain target will be achieved. Development permitted under a development order, such as permitted development rights, do not need a biodiversity net gain plan.

Biodiversity value must be calculated using the Government’s biodiversity calculator otherwise known as the “Defra metric” [3]. According to the Environment Bill, broadly speaking, biodiversity net gain is calculated by deducting “pre-development biodiversity value” from the estimated “post-development biodiversity value”. The pre-development biodiversity value of a habitat on a site is calculated at the time of the submission of the planning application. A technical supplement that accompanies the Defra metric provides guidance to assist developers in assessing the condition of a habitat.

Normally, the on-site post-development biodiversity value, is calculated by determining the value at the time the development is completed. However, a habitat’s full biodiversity value may not come to fruition until years after the development has completed. The Bill allows developers to take advantage of the higher future value if the habitat enhancement: (i) is secured under a planning condition, planning obligation or conservation covenant; (ii) is significant and (iii) will be maintained for at least 30 years after the development is completed. The post-development biodiversity value can also include off-site options comprising either enhancing a habitat registered on the Government’s proposed “biodiversity gain register” or purchasing “biodiversity credits” from the Government.

There are further exceptions to these requirements contained in the Bill, with the potential for more to come forward in secondary regulations. The Bill also allows for secondary regulations on matters such as arrangements for purchasing biodiversity credits.

What are the implications for developers?

The Government is expected to provide, and consult on, guidance to assist stakeholders. The Government hopes this guidance “will make it clear to developers what should be required and by when”, and this should shed further light on how the two-year “transition period” for the provisions will work. For the time being, developers should consider how their current development proposals, including land acquisitions, may be affected by these proposals. In this regard, developers should consider using available tools [4] or obtaining expert advice to assess the likelihood of providing on-site habitat creation on a proposed site. In the Government’s July 2019 “summary of responses and government response” to the December 2018 net-gain consultation, the Government indicated that a “mitigation hierarchy” should be followed, which prefers the use of on-site habitat creation options over off-site options. However, it is not clear at this stage to what extent this will weigh against sites with limited on-site options.

From what is contained in the current Bill, developers will need to be careful to navigate the final biodiversity net-gain legal requirement correctly and ensure their biodiversity net gain figure is supported by evidence in their biodiversity net gain plan. Developers will also need to ensure they have a strong grasp of the Defra metric and accompanying guidance. The Government acknowledged in its July 2019 consultation response, that local planning authorities will need to have access to the right training and ecological expertise. Developers should therefore ensure their biodiversity net gain plan is clearly presented to assist the planning authority with their review of the plan and reduce the risk of delay. Developers should also consider consulting the local planning authority at an early stage of the planning process on any proposals for on-site and off-site habitat enhancement.

[1] See “Biodiversity net gain. Good practice principles for development Case studies” published by the Chartered Institute of Ecology and Environmental Management in 2019 here.
[2] Paragraph 175d NPPF
[3] Tool is currently found here (updates in December 2019)
[4] The Government noted in its consultation July 2019 response (click here to view) to the December 2018 proposals (click here to view) that it intends to improve environmental mapping

If you require further information about anything covered in this briefing, please contact Jay Sattin, or your usual contact at the firm on +44 (0)20 3375 7000.

This publication is a general summary of the law. It should not replace legal advice tailored to your specific circumstances.

© Farrer & Co LLP, March 2020

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