Following a prolonged period of uncertainty since the Environment Act was made law in 2021, the Biodiversity Net Gain (BNG) requirements have now come into effect. Under this legislation, planning applications for major development submitted on or after 12 February 2024 are required to provide a BNG of 10%, as measured by the statutory biodiversity metric. Small sites and developments, as defined in article 2(1) of the Town and Country Planning (Development Management Procedure) (England) Order 2015, are exempt from these BNG requirements until 2 April 2024.

In total, six Statutory Instruments have come into effect which cover matters relating to BNG. From our experience, the development industry acknowledges and largely supports the need to respond to the biodiversity and climate crises, and the BNG requirements have the potential to create a sense of place that adds value to a development. However, the ability to meet the BNG requirement can be challenging, and there are concerns that this represents yet another obstacle to an already difficult development process, potentially impacting viability and delivery. 

WHAT DOES THIS MEAN FOR THE DEVELOPMENT INDUSTRY?

In a market where there are already a number of pressures on development, including high interest rates, soaring construction costs, CIL, and planning obligations, the requirements brought about by BNG will be met by many with apprehension.

Developers will now need to consider BNG delivery from project inception to ensure that a scheme remains viable and deliverable whilst providing a minimum 10% net gain above its baseline biodiversity value. As this is a statutory requirement, it cannot be negotiated in the same way as other planning obligations can and is something that has to be considered from the project's outset. 

In delivering BNG, the legislation sets out the following biodiversity gain hierarchy which must be followed:

• Priority 1: On-site through habitat creation and enhancement; 
• Priority 2: Local off-site habitat creation or enhancement on land holdings or via habitat banks within the local LPA area, or buy off-site biodiversity units on the market; and as a last resort
• Priority 3: The purchase of statutory biodiversity credits(these differ from off-site biodiversity units as they are purchased in the off-site private market). The cost of the lowest tier of habitat amounts to £42,000 per credit.

Applicants are able to combine all three options but must follow the hierarchy in order.

REMAINING UNCERTAINTY

The legislation puts transitional arrangements in place to ensure that BNG will not apply to those applications made before 12 February.

It is also the case that applications made via Section 73 to vary an existing planning permission will not be subject to the BNG requirements. This also extends to applications for the approval of reserved matters as the parent decision has been approved outside of the legislative position. That said, local policy requirements for BNG would still need to be addressed, and this will need to be tested. 

Now that BNG legislation is in full force, we expect implications for local plan-making as many authorities are pursuing BNG policies in addition to legislative requirements. Arguably, depending on how this is approached, there is a degree of overlap that policy should seek to avoid. It will be interesting to see how Planning Inspectors deal with this at Examination, and whether they will look to the forthcoming National Development Management Policies (NDMPs) as a more appropriate approach to secure BNG in planning policy. 

MOVING FORWARD

The introduction of the biodiversity gain planning condition, which will require a Biodiversity Gain Plan to be submitted and approved by the LPA prior to commencement of development, will also have implications on project delivery. Where many LPAs simply do not have the appropriate resources and expertise in place to process these planning conditions, this is likely to delay project delivery, and our clients must now factor this into project programmes.

We are already experiencing increased uncertainty as professionals move into unchartered ground, and we now enter a transitionary period whilst the profession accustoms itself to these changes. However, BNG is now in effect and must be considered from the outset when considering the development potential of sites and the scope and form of planning applications.