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Mandatory Biodiversity Net Gain for Developers and Habitat Banks

On 12^th February 2024, Biodiversity Net Gain (BNG) became mandatory for developments across the UK. All planning applications made after this date now require additional BNG documentation showing how the loss of habitats will be offset and exceeded elsewhere. Developers must provide evidence to demonstrate how they meet BNG requirements either on-site, off-site or through the purchase of statutory credits as a last resort. As such, a unique opportunity has arisen for landowners to create Habitat Banks: areas of land set aside for generating biodiversity units, which can be traded with developers requiring the delivery of off-site BNG. Maydencroft Limited assists developers and landowners throughout the BNG process, from survey to design and all the way through to delivery and ongoing management.

Minimum legal requirements and advice for developers

Developers must consider BNG as early in the planning process as possible. Even during site selection, consideration must be given to designated sites, protected species and irreplaceable habitats, as these can all impact BNG calculations.

Irreplaceable habitats are rare habitats (such as ancient woodland, veteran trees and lowland fens) that cannot be compensated for through the BNG process due to their very high value. There must be no negative impact on these habitats during development, except in exceptional ecological circumstances where mitigation measures can be agreed upon independently with the Local Planning Authority (LPA). However, BNG also provides a fantastic mechanism for enhancing and securing irreplaceable habitats.

During the pre-application period, the Developer should consider whether their site is exempt from BNG legislation (e.g. permitted developments or Nationally Significant Infrastructure Projects) and provide evidence to support these claims. They must also check the required percentage net gain for the LPA, as some will require more than 10%. It is recommended that developers gather preliminary information at this stage regarding how they intend to achieve BNG and follow the BNG hierarchy.

Developers should also check whether their project qualifies as a Small Site. Small Sites use a slightly different, simplified version of the Statutory Metric. This includes residential developments of 1-9 dwellings on a site more petite than a hectare. The created floor space for commercial developments must be under 1,000 square metres. Small Site BNG legislation is due to become mandatory on 2^nd April 2024.

All planning applications will need to be supported by a Biodiversity Statement. This official document provides the proposed development details and indicates whether the site is exempt from BNG regulations. Submitting as much information alongside the Biodiversity Statement as possible is advisable, and some LPAs will likely request greater detail. For some developments, there will be cost and time value in having all ecological surveys, metric calculations and habitat plans in place before planning submission.

If the information in the planning application is satisfactory, the LPA will give conditional approval, including the requirement to produce a Biodiversity Gain Plan. This is a standard template document that provides:

• Details of the site
• The Developer
• How the BNG hierarchy has been followed
• Pre- and post-development plans
• A completed metric for pre- and post-development
• Evidence of allocated off-site units or purchased statutory credits if required
• Appropriate monitoring measures
• The overall net gain

• If significant on-site enhancements are being made, producing a Habitat Management and Monitoring Plan (HMMP) will also be necessary to determine how habitat creation and enhancement measures will be delivered and managed for 30 years. This document should include every detail of your intended investment in biodiversity. If applicable, off-site units must be registered and allocated to the development, and statutory credits must be purchased in advance. Once approved, works can commence immediately, subject to the discharge of other planning conditions.

The general developer advice from LPAs nationwide is to frontload as much BNG information as possible. Even if it is not a legal requirement, it is helpful to get the opinion of the LPA as early as possible to avoid inconvenient changes later. Once a development has been conditionally approved, the Biodiversity Gain Plan and HMMP can be submitted immediately. It usually takes eight weeks for the documents to be approved, so having them ready in advance can save time.

Minimum legal requirements and advice for habitat banks

Habitat Banks looking to sell units into the off-site BNG market will follow a process different from that of developers. First, Baseline Ecological Surveys are carried out to determine the feasibility of a site for creating a habitat bank. These surveys assess the site's unit baseline and how many units could be generated. An outline of habitat options and predicted uplift is provided to the landowner in a BNG Baseline Appraisal and Strategy.

The trading price of habitat units must consider the costs of surveys and documents, legal and administrative fees, capital costs for works, ongoing management and monitoring, and contingency to cover unknown eventualities. Unit prices will also depend on the market value, which constantly fluctuates. It is important to note that the cost to the Developer depends on the distance between the habitat bank and the development. Local offsetting is prioritised, so the further the distance between the two sites, the more expensive the unit value for the Developer.

A buyer can be secured using online marketplaces or engaging with a BNG broker. A price and payment method must be agreed directly with the buyer. Developers may prefer to pay upfront or in staged instalments. Some will want to delay payment until they are confident their Biodiversity Gain Plan will be approved.

A legal agreement to show that the habitats will be secured for 30 years will be set out in a Section 106 Agreement with the LPA or a Conservation Covenant with the relevant responsible body. Either way, you must prepare an HMMP containing a structured timeline of the initial work and the measures taken to achieve and maintain the desired condition. It should also include when and how you will monitor habitats, report results and adapt management accordingly. The HMMP should be fully comprehensive, realistic, and achievable for effective monitoring.

All BNG gain sites must be registered on the Biodiversity Gain Sites Register hosted by Natural England. This will require details of the site and the landowner and written consent if registering land on behalf of someone else. It will be necessary to have a legal agreement in place to register your site but not to have a buyer.

Once a site has been registered, a legal agreement has been secured, and a buyer has confirmed, allocating units to a development will be possible. This step is crucial for the Developer as they require evidence that off-site units have been assigned to their development before their Biodiversity Gain Plan can be accepted. Forms are available online to apply to Natural England for the allocation of units. If using on behalf of someone else, they must complete a separate Agent Authorisation Form. Natural England will then request a completed statutory biodiversity metric calculation and a £45 application fee.

If not already in progress, habitat creation and enhancement must commence within 12 months of unit allocation. The habitats must then be managed and monitored for at least 30 years. Regular reporting is essential, as the LPA will review the site every five years to ensure all requirements are met.

For more info on BNG, check out our website https://www.biodiversity-net-gain.co.uk/home.html

Author: Hannah Brookes