FREE CHAPTER from ‘A Practical Guide to Biodiversity Net Gain’ by Nina Pindham

CHAPTER ONE – INTRODUCTION

 

Ecologists tolerate margins of error that would give aeronautical engineers heart palpitations. Nature is complex, unpredictable and quite often wholly uncontrollable. While policy-based biodiversity net gain (“BNG”) regimes are decades-old, why, until now, was there no equivalent in law?[1] Is it possible to achieve the laudable aim of improving biodiversity by means as rigid, specific, and severe as the law? One answer is clear enough: previous efforts have not worked to stem the crisis of biodiversity loss even in nations where BNG policies have existed for decades. David Attenborough noted in his forward to the Dasgupta Review:[2]

“We are facing a global crisis. We are totally dependent upon the natural world. It supplies us with every oxygen-laden breath we take and every mouthful of food we eat. But we are currently damaging it so profoundly that many of its natural systems are now on the verge of breakdown…Today, we ourselves, together with the livestock we rear for food, constitute 96% of the mass of all mammals on the planet. Only 4% is everything else – from elephants to badgers, from moose to monkeys.”

The European Union’s Explanatory Memorandum proposing a regulation on nature restoration (2022/0195) concluded “[d]espite EU and international efforts, biodiversity loss and the degradation of ecosystems continue at an alarming rate[[3]]…The outlook for biodiversity and ecosystems is bleak and shows that the current approach is not working.”[4]

Closer to home for legal practitioners, Holgate J. (as he then was) noted in Vistry Homes Limited v Secretary of State for Levelling Up, Housing and Communities, St Albans City and District Council, Colney Heath Parish Council [2024] EWHC 2088 (Admin):

“139. Global decline in biodiversity is described in the literature as a matter of great concern. It was discussed at the UN COP 26 meeting in November 2021. The nations involved adopted the Glasgow Climate Pact. Paragraph 38 emphasises the importance of protecting, conserving and restoring nature and ecosystems including the protection of biodiversity.

  1. A report by the House of Commons Environment Audit Committee in June 2021 (‘Biodiversity in the UK: Bloom or bust?’ HC 136) referred to the UK as being one of the most nature-depleted countries in the world.”

And so, all eyes are on England’s world-leading approach.[5] With thanks to my publishers for prohibiting any citation of academic articles, to avoid disappointment it must be said this book has no intellectual pretensions, contains no original research, and suggests no improvements. Rather, it aims to set out for those making and determining planning applications what England’s BNG regime is and how it works, in the simplest possible terms. As I and my patient publisher have learned, that was a daunting enough task.

General Overview

The genesis of the BNG regime is the Environment Act 2021. It comprises the framework for a series of enabling and amending provisions, concerning both primary and secondary legislation, supplemented through policy and guidance issued from two separate government departments, critical contributions from statutory advisers to government and professional organisations, all spread across numerous websites. All of this will be referred to here as the BNG regime. The BNG regime is, in short, incredibly complex. The aim, however, is simple: to achieve a measurable post-development improvement in biodiversity.

Given the complexity of the regime, it is worth clarifying the status within the framework for decision makers. When the provision in question arises in law (whether as a section in an Act, a regulation in Regulations, or an article in an Order), that must be obeyed. When the provision in question arises as a matter of policy or guidance (whether national, as a paragraph in the national planning policy framework, (“NPPF”), or planning practice guidance, (“PPG”), or local in the form of development plan policy, supplementary planning documents, or the like), then that should be obeyed unless material considerations indicate otherwise. The BNG regime involves an awful lot of all of the above. To (hopefully) keep the legal distinction between what must be done and what should be done clear, this book aims to always cite the source of the provision in question and, although it comes at a cost to flow and readability, where the source is legal that is not generally footnoted.

It is also worth clarifying, at the outset, the terms used. Throughout this book references to the PPG are, unless otherwise specified, to the PPG on Biodiversity Gain, published jointly by MHCLG and DEFRA[6] although readers must also be aware of, and check, the DEFRA-only “collection” of guidance on BNG.[7] For convenience, applicants for planning permission and those submitting a biodiversity gain plan for approval are referred to as “developers” even though their identity will vary in reality. Landowners, habitat bank operators, local planning authorities selling biodiversity units, and all other providers of offsite BNG are collectively referred to as “landowners”. Those making decisions under the Town and Country Planning Act 1990, whether local planning authorities, combined authorities, a mayor, the Secretary of State, or an inspector, are collectively referred to as “planning authorities”.

How does the BNG regime work to achieve this goal? First, s.98 and Schedule 14 to the Environment Act 2021 inserted s.90A and Schedule 7A into the Town and Country Planning Act 1990. Together these impose (from 12 February 2024) a mandatory condition on every non-exempt planning permission granted under Part 3 of the Town and Country Planning Act 1990 requiring the provision of at least 10% BNG for at least 30 years (for the condition see paragraph 13(2) of Schedule 7A, “the biodiversity gain condition”).

The BNG regime does not apply to any planning permission granted after 12 February 2024 when the application was made before 12 February 2023 (reg.s 2 and 3 of the Environment Act 2021 (Commencement No.8 and Transitional Provisions) Regulations 2024). This does not mean the BNG regime must be treated as irrelevant in such decisions: the Court of Appeal has accepted that future legislative provisions may be relevant to a decision maker (R (Cala Homes (South) Limited) v Secretary of State for Communities and Local Government [2011] EWCA Civ 639 where the point was not ultimately disputed ([20] and [33]).

However, decision makers should be very cautious if taking the BNG regime into account for development which is not caught by the BNG regime, as no fewer than three cases have already alleged an unlawful retrospective application of the BNG regime, two successfully. In NRS Saredon Aggregates Limited v Secretary of State for Levelling Up, Housing and Communities [2023] EWHC 2795 (Admin) Eyre J. held the decision-maker was not entitled to reduce the weight that would otherwise be given to the first 10% of the BNG to be provided by applying the not-yet-in-force legislative requirement ([55] to [56]). In R (Weston Homes plc) v Secretary of State for Levelling Up, Housing and Communities [2024] EWHC 2089 Admin the reasoning for the weight given to BNG improvements, in the context of the new legislation, was deemed unlawfully inadequate. An argument on retrospective application was also made in Vistry Homes but did not succeed.

From 2025 the BNG regime is intended to be applied to nationally significant infrastructure projects, (“NSIPs”). This will be achieved through amendments to the Planning Act 2008 (Schedule 15 of the Environment Act 2021, when it enters into force, will insert what will be Schedule 2A to that Act, and make consequential amendments). The government has previously stated a commitment to making BNG mandatory for NSIPs from late November 2025.[8]

It is important to point out the BNG regime with which this book is concerned should be distinguished from the provision of other biodiversity gains and the general biodiversity objective under s.40(A1) of the Natural Environment and Rural Communities Act 2006. The statutory metric, for example, is not intended to represent a comprehensive model of all aspects of biodiversity. By using habitat as a proxy, animal species presence and/or abundance are not accounted for in the metric. Protected sites and species are dealt with separately from the BNG regime. These other regimes and measures of biodiversity value are nonetheless crucial in ecological terms, and therefore remain important for developers and decision makers to consider alongside the BNG regime.

 

The Biodiversity Gain Objective

Schedule 7A, paragraph 1(1) of the Town and Country Planning Act 1990 confirms the legislation provides for “grants of planning permission in England to be subject to a condition to secure that the biodiversity gain objective is met.” So, what is the biodiversity gain objective and how does one meet it?

Schedule 7A, paragraph 2(1) provides the biodiversity gain objective is met if “the biodiversity value attributable to the development exceeds the pre-development biodiversity value of the onsite habitat by at least the relevant percentage”. The relevant percentage is 10% (Schedule 7A, paragraph 2(3)). Thus, in a nutshell, the biodiversity gain objective means development granted planning permission must provide for at least a 10% increase above the pre-development biodiversity value of the onsite habitat.

The relevant percentage for the purposes of the BNG regime can be changed, but only by way of law (as secondary legislation in the form of regulations: paragraph 2(4) of Schedule 7A), and only after a draft of the instrument containing the regulations has been laid before, and approved by a resolution of, each House of Parliament (s.333(3AA) of the Town and Country Planning Act 1990). It is crucial to understand the 10% is measured against the cumulative total pre-development onsite habitat biodiversity value (this is all land within the red line plan[9]), irrespective of whether or not that specific habitat will or might be impacted by the development.[10]

In addition to exemptions, there are transitional arrangements which disapply the biodiversity condition from certain planning permissions, as well as special modifications for other planning permissions or where irreplaceable habitat is present on the development site (see Exemptions, Special Cases, and Irreplaceable Habitats chapters below).

The development subject to the BNG regime comprises all “development for which planning permission is granted” (Schedule 7A, paragraphs 2(1) and 5(1)). This is limited to planning permission granted on an application made under Part 3 of the Town and Country Planning Act 1990 (reg.2(2) of the Environment Act 2021 (Commencement No. 8 and Transitional Provisions) Regulations 2024). Permission granted by way of development order, and other limited exemptions, are not caught by the BNG regime (see Exemptions chapter below).

There are three ways to achieve BNG in order to satisfy the gain objective. First, generating onsite “units” (a quantified biodiversity value uplift within the red line boundary of the development site, Schedule 7A paragraph 12(1) refers to onsite habitat as that on “land to which the planning permission relates”); second, generating offsite units (biodiversity gains created on land outside the red line plan); and thirdly and finally statutory biodiversity credits (buying credits from Natural England as a measure of last resort if onsite or offsite options are not feasible).

In each case, the statutory metric (an online Excel-based tool published by the Secretary of State for the Environment, Food and Rural Affairs) is used “for measuring, for the purposes of [Schedule 7A], the biodiversity value or relative biodiversity value of habitat or habitat enhancement” (Schedule 7A, paragraph 4(1); see also Schedule 7A, paragraph 3). Because of the importance of the metric it must be laid before Parliament (Schedule 7A, paragraph 4(6)), and is subject to procedural conditions in the event of any update (consultation and transitional arrangements: paragraphs 4(4) and 4(5)).

The statutory metric uses habitat as a proxy measurement for biodiversity value in order to generate numeric biodiversity units in one of three non-interchangeable types of habitat comprising either area habitat, watercourse, or hedgerow units. 10% BNG must be achieved for every one of the three types of habitat; in other words, gains in one type of habitat cannot offset the provision of less than 10% net gain in another form of habitat type.

As to the baseline date from which the gain is to be measured, Schedule 7A provides for six options depending on the circumstances (see Relevant Date section in the Statutory Metric chapter below).

 

The Biodiversity Gain Hierarchy

The biodiversity gain hierarchy is as central to the BNG regime as the biodiversity gain condition and objective: the condition achieves the objective through application of the hierarchy. Article 37A of the Town and Country Planning (Development Management Procedure) (England) Order 2015 gives the definition:

“37A. Meaning of biodiversity gain hierarchy

In this Part, ‘biodiversity gain hierarchy’ means the following actions in the following order of priority-

(a) in relation to onsite habitat with a habitat distinctiveness score, applied in the statutory metric, equal to or higher than four-

(i) avoiding adverse effects of the development, or
(ii) insofar as those adverse effects cannot be avoided, mitigating those effects;

(b) in relation to any onsite habitat which is adversely affected by the development, compensating for that adverse effect by-

(i) habitat enhancement of onsite habitat;

(ii) insofar as there cannot be that enhancement, creation of onsite habitat;

(iii) insofar as there cannot be that creation, the availability of registered offsite biodiversity gain for allocation to the development;
(iv) insofar as registered offsite biodiversity gain cannot be allocated to the development, the purchase of biodiversity credits.”

The effect of the statutory definition of the biodiversity gain hierarchy is summarised by the PPG, which sets out the prioritised list:[11]

  • First, in relation to onsite habitats which have a medium, high and very high distinctiveness (a score of four or more according to the statutory metric), avoiding adverse effects from development and, if adverse effects cannot be avoided, mitigating those effects; and then
  • Second, in relation to all onsite habitats which are adversely affected by the development, adverse effects should be compensated by prioritising, in this order of priority where possible: (1) enhancement of existing onsite habitats, (2) creation of new onsite habitats, (3) allocation of registered offsite gains and finally (4) purchase of statutory biodiversity credits.

“Habitat enhancement” means enhancement of the biodiversity of habitat (as defined by paragraph 12(2) of Schedule 7A to the Town and Country Planning Act 1990).

It is important to note the hierarchy, like much of the BNG regime, does not apply to irreplaceable habitats (see the Irreplaceable Habitats chapter below). Where it does apply, developers are obliged to explain how the biodiversity gain hierarchy has been applied in their biodiversity gain plan, including any reasons for not following the order of priority (article 37C(2)(e) of the Town and Country Planning (Development Management Procedure) (England) Order 2015). Planning authorities are then obliged to consider the application of the hierarchy when determining whether to approve the biodiversity gain plan (article 37D(2)(a) of the Town and Country Planning (Development Management Procedure) (England) Order 2015), including any reason why the biodiversity gain hierarchy is not to be applied, and if no reason is given, the absence of an explanation must be taken into account by the planning authority (article 37D(2)(b)). The various means of BNG delivery within the hierarchy are not mutually exclusive, so a developer can meet their BNG requirement through a combination of them, but they must apply the hierarchical order of the options where possible.[12]

Because the application of the biodiversity gain hierarchy is a mandatory material consideration, decision makers should give reasons if they do not approve the biodiversity gain because of a failure in relation to the biodiversity gain hierarchy (or if it is rejected for any other reason). These reasons should meet the legal standard,[13] obviously, and enable the developer to know what they did wrong and why the plan was rejected as a consequence of that failure. Further and in any event, when a biodiversity gain plan is rejected for any reason the planning authority is legally obliged to give reasons stating “clearly and precisely their full reasons for the determination, specifying all elements of the biodiversity gain plan which are relevant to the determination” (article 37D(5) of the Town and Country Planning (Development Management Procedure) (England) Order 2015).

The biodiversity gain hierarchy is separate from, but relevant to, the mitigation hierarchy set out in paragraph 186(a) of the NPPF.[14] Thus, there is a separate requirement for decision makers to refuse a planning application if significant harm to biodiversity resulting from the development cannot be avoided (through locating on an alternative site with less harmful impacts), adequately mitigated, or, as a last resort, compensated for. Clearly, avoiding, mitigating and if necessary compensating for harms to biodiversity through the BNG regime can be relevant to application of the paragraph 186(a) policy but other biodiversity impacts may also be relevant.[15]

 

Biodiversity Gain as Material Consideration

BNG will often be a material consideration when determining a planning application, and planning authorities may consider whether the biodiversity gain condition is capable of being discharged during determination (developers are likely to want this answer early as well). It would accordingly be helpful for developers and planning authorities to engage in early discussion of the prospective contents of the biodiversity gain plan and other relevant requirements. There is helpful case law on how to take account of BNG as a benefit of development (see Planning Authority Governance chapter below).

Maintenance, Monitoring and Enforcement Responsibilities

Developers must ensure habitats they enhance and/or create in order to achieve the biodiversity gain objective are maintained for at least 30 years, whether that is onsite or offsite. Legal agreements are necessary to outline responsibilities for habitat enhancement and/or creation, monitoring, and reporting for all offsite provision of BNG (Schedule 7A, paragraphs 10(1) and 10(3) of the Town and Country Planning Act 1990). A legal agreement or condition is also expressly required by statute for all “significant” onsite habitat provision (Schedule 7A, paragraphs 9(1)-(3)). The legal agreements can take the form of either an agreement under s.106 of the Town and Country Planning Act 1990 or conservation covenant as defined by s.118 and executed under s.117 of the Environment Act 2021 (see Legal Agreements chapter below). Additional planning conditions and legal agreements may also be used to secure the necessary provision, maintenance and monitoring of non-significant onsite BNG for at least 30 years. As to the monitoring interval, a monitoring interval regime at years 1, 5, 10, 20 and 30 is generally accepted as the minimum industry standard, although every case will require specific attention to the appropriate monitoring interval regime and this may need to be adjusted.

If conditions or a s.106 agreement are used the enforcing body will be the local planning authority. If a conservation covenant is used, the enforcing body will be the designated responsible body (which may also be a local planning authority). Further details on enforcement are set out in the Planning Authority Governance and Legal Agreements chapters below.

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[1]     Research carried out by my brilliant pupil, Hannah Taylor investigating the basis for the regime (law or policy) and the stated aim (no net loss or biodiversity gain).

[2]     Available at https://www.gov.uk/government/publications/final-report-the-economics-of-biodiversity-the-dasgupta-review. Last accessed 1 October 2024.

[3]     Page 1, first sentence.

[4]     Page 2, final paragraph.

[5]     Within my direct knowledge, in 2024 alone it has been subject to presentations and discussion at the UN Convention on Biological Diversity’s COP16 in Cali, Colombia; biodiversity sessions during New York Climate Week; and the UN Framework Convention on Climate Change’s COP29 in Baku, Azerbaijan.

[6]     https://www.gov.uk/guidance/biodiversity-net-gain. Last accessed 1 September 2024.

[7]     https://www.gov.uk/government/collections/biodiversity-net-gain See also overview https://www.gov.uk/guidance/understanding-biodiversity-net-gain. Last accessed 1 September 2024.

[8]     See DEFRA blog post https://defraenvironment.blog.gov.uk/2023/11/29/the-biodiversity-net-gain-statutory-instruments-explained/#:~:text=We%20have%20
committed%20to%20BNG,NSIP%20guidance%2C%20in%20
September%202024
. Last accessed 1 October 2024.

[9]     The DEFRA guidance confirms “onsite” means within the red line plan: https://www.gov.uk/guidance/understanding-biodiversity-net-gain. Last accessed 1 September 2024.

[10]    DEFRA guidance https://www.gov.uk/guidance/understanding-biodiversity-net-gain. Last accessed 1 September 2024.

[11]    Summarised from PPG paragraph: 008 Reference ID: 74-008-20240214.

 

[12]    DEFRA guidance https://www.gov.uk/guidance/understanding-biodiversity-net-gain#ways-to-achieve-bng-on-site-units-off-site-units-and-statutory-biodiversity-credits. Last accessed 1 September 2024.

[13]    Reasons for the decision must be intelligible and adequate, enabling one to understand why the matter was decided as it was and what conclusions were reached on the ‘principal important controversial issues’. A decision maker’s reasoning must not give rise to a substantial doubt as to whether they went wrong in law, for example by misunderstanding a relevant policy or by failing to reach a rational decision on relevant grounds. But the reasons need refer only to the main issues in the dispute, not to every material consideration (per Lord Brown in South Bucks District Council and another v Porter (No. 2) [2004] 1 W.L.R. 1953, at page 1964B-G).

[14]    Which provides: “[w]hen determining planning applications, local planning authorities should apply the following principles: a) if significant harm to biodiversity resulting from a development cannot be avoided (through locating on an alternative site with less harmful impacts), adequately mitigated, or, as a last resort, compensated for, then planning permission should be refused”.

[15]    This is recognised in the PPG at paragraph: 008 Reference ID: 74-008-20240214.