Prepare Now for Ten Per Cent BNG

Posted by UK Property Forums on 13th June 2023 -

Many local authorities have yet to adopt policies to ensure new developments meet the requirement for 10 per cent biodiversity net gain. Kieron Gregson, associate partner for Carter Jonas in London, discusses what awaits developers when the new rules come in in November and how prepared councils are.

The November implementation date for a minimum 10 per cent biodiversity net gain (BNG) requirement on new developments (with a five-month grace period from the introduction of the BNG mandate for small sites) is fast approaching.

While some local planning authorities (LPAs) already have policies in place, many do not.

In 2022, Carter Jonas researched the 322 LPAs in England and analysed the proportion where BNG measures have already been incorporated into Local Plans.

We also looked at where BNG policies are progressing through emerging Local Plans, which are likely to be afforded greater weight in the decision-making process as they near adoption, and where BNG policies appear in supplementary planning documents (SPDs).

A year on, we have revisited this research and found that the gap between those that have an emerging policy and those with none has narrowed, but only slightly.

As of Q4 2022, just under 8.7 per cent (28) of LPAs had adopted a net gain policy and 31.7 per cent (101) had one emerging, leaving 59.6 per cent (193) without any BNG policy.

This represents a 64.7 per cent increase in those who have adopted policies and a 39.7 per cent increase in emerging policies.

With the number of policies in place rising by 3.4 percentage points, and the number of emerging policies by nine percentage points, take-up has been slow.

It is probably worth considering this in the broader planning context: it has been a year in which nutrient neutrality has put moratoriums on new home development, under-resourcing in LPAs has led to ‘lockdowns’ to clear backlogs, housing targets have been ‘reset’ and Green Belt policy has changed.

We’ve seen many Local Plans halted and an eight per cent decrease in the number of new homes starts on site.

There’s even a possibility that, given the recent political instability, some LPAs are delaying implementation through their Local Plans until the requirement becomes mandatory – on the basis that planning policy has seen some considerable changes of direction in the past year.

Understandably, LPAs may question how and why, when Local Plans are to be streamlined as part of the Levelling Up and Regeneration Bill, they can simultaneously be extended to include a new set of policies.  This is just one of the many inconsistencies that the planning system has seen in the past year.

We continue to see substantial progress in some regions, where LPAs have triggered Local Plan reviews and are integrating BNG policy sooner. In some cases, minimum requirements exceed 10 per cent.

In such areas, demand for BNG solutions will emerge at a faster pace, particularly as many developers will be required to look for off-site credits and are likely to be competing for such.

The first LPAs to adopt policies calling for net gain greater than 10 per cent are ‘predominantly urban’ locations. These local authorities account for 73.3 per cent of associated adopted or emerging policies, which equates to 5.1 per cent of all authorities in this classification.

This compares with only 13.3 per cent that are ‘predominantly rural’ (or 2.2 per cent of the category), and the same percentage for those classified as ‘urban with significant rural’ (or 3.8 per cent of the category).

Located in a part of the country where the rate of biodiversity loss has been historically high, Greater Cambridge has affirmed that biodiversity and green spaces are a high priority. Accordingly, the authority is seeking to introduce a minimum 20 per cent net gain requirement.

Birmingham Council is considering a higher percentage of BNG because, ‘the majority of development sites will be on brownfield land with limited biodiversity value’.

As such, it is claimed that the base biodiversity of developments will be low (although brownfield sites can also be biodiverse), and so a 10 per cent increase will be negligible.

The impact will be felt most by developers active in the more rural locations within such boroughs. With the strong expectation being that BNG is provided onsite, rather than through credits, new developments in these areas will have to allocate a greater amount of developable land as green space than previously.

There are many ways in which this can be done effectively, such as replacing lawns and amenity areas with wildflower meadows, increasing the number of bat and bird boxes, utilising SUDS more effectively and finding innovative solutions such as green roofs and green walls.

The success of such initiatives will depend on good and early professional advice and implementation by ecological specialists – but as such will come at a cost to developers. In a challenging market and alongside other increasing development costs – from planning fees to the costs of materials and labour – this will inevitably impact on viability.

Ultimately, something will have to give and we may see a reduction in the delivery of affordable housing where a requirement for 20 per cent BNG threatens the viability of a scheme.

Although the Government’s intention (as is reiterated in many LPAs’ policies) is for BNG to be fulfilled on-site, there will invariably be schemes, such as in high value urban locations, where viability calculations will lead to BNG being provided off-site.

But this is not a case of ‘out of site, out of mind’, since the parcel of land upon which BNG is provided must be managed for 30 years and, as necessary, maintained.

BNG credits are another option. For example, Plymouth City Council has recently signed off on a new ‘habitat banking vehicle’. Initiatives such as this are likely to help speed up the delivery of developments by offering a ready-made BNG solution.

They also allow transparency on the details of the habitat banks and for unit values and spending to be published. A similar approach is already adopted in places where financial contributions are levied towards mitigation under the Habitats Regulations Assessment regime (for example, the creation of SANGs).

Our research has demonstrated some understanding of where these requirements have the greatest potential to threaten viability. And, on the basis of climate change emergencies having been declared, some understanding of where higher requirements are likely to occur in future.

But the bottom line is that, as of November 1, 2023, 10 per cent BNG will become (almost) universally mandatory and developers must prepare for this in all circumstances.

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