This blog joins some of the dots in our Natural Capital blogs series by considering how the Environment Bill’s biodiversity net gain (BNG) requirements might affect the outcomes of the planning system.
Tools are one thing
Developers and authorities will need to plan for Delivery Routes for securing BNG: on-site gain, off-site gain and biodiversity credits. These routes lead to different biodiversity outcomes and entail different costs.
Developers are likely to find biodiversity credits and off-site gain easier and possibly cheaper than on-site gain. Biodiversity credits are the ‘fire and forget’ option: the developer effectively pays the Secretary of State to take responsibility for delivering the compensation elsewhere. Off-site gain is in practice likely to work in a similar way, with developers buying credits directly from off-site compensation providers.
The relative price and complexity of each route – and the extent to which plans require or allow delivery at greater scale than individual sites can accommodate to avoid ‘gardening in isolation’ – will shape spatial and development strategies.
Priorities are another The draft Bill gives no priority to any of the delivery routes. On the face of it, no priority is needed: applying the biodiversity metric (Measure What You Treasure), a 10% net gain is a 10% net gain whichever route is used to get there.
Priorities are another
The draft Bill gives no priority to any of the delivery routes. On the face of it, no priority is needed: applying the biodiversity metric (Measure What You Treasure), a 10% net gain is a 10% net gain whichever route is used to get there.
But what about the biodiversity mitigation hierarchy – the principle that on-site biodiversity loss should be avoided, mitigated and, as a last resort, compensated (NPPF175a)? Where gain/compensation is needed, should on-site gain be prioritised over off-site gain?
The Defra Biodiversity Metric supports the hierarchy through scoring adjustments reflecting the time it takes establish new habitat, the distance of new habitat from the development site, and other factors. The government’s January 2019 response to the Net Gain Consultation confirmed that a mandatory net gain should support, not undermine, the mitigation hierarchy and that habitat should not be ‘exported’ from areas receiving development. The government promised to introduce a spatial hierarchy “to incentivise on site and local compensation where appropriate”. However, these hierarchies do not sit comfortably with some aspects of the BNG framework.
On-site biodiversity suffers?
The mitigation and spatial hierarchies are likely to remain matters of policy rather than law. As such, they will remain considerations to be balanced – potentially foregone – as a matter of planning judgment. In contrast, once the BNG requirement becomes law, it will take precedence over, and cannot be outweighed by, policy considerations.
The RTPI has argued that making some issues, but not others, subject to statutory obligations risks interfering with the balancing of planning considerations and distorting the ‘place-leadership’ purpose of planning.
Giving the 10% BNG requirement this elevated status, and allowing BNG to be delivered via off-site gain and biodiversity credits, creates some tension between:
(a) achieving 10% BNG, and
(b) ensuring high on-site biodiversity standards in terms of design, operation and stewardship.
The feasibility and viability of each BNG delivery route will feature in decision-making on plans and projects. If biodiversity credits and off-site gain are cheaper to deliver than on-site gain, outcome (b) may suffer.
Further, although LPAs will be concerned about off-site gain being delivered at the expense of on-site biodiversity, the desirability of achieving gains on individual sites in isolation, with potentially limited broader biodiversity benefits, may weigh against this. The issue will need to be properly considered at plan-making stage.
Pricing lever
Perhaps the most decisive factor in the economics of delivering BNG will be the pricing of biodiversity credits. Through this lever the Secretary of State will control the relative cost of each delivery route.
The government stated in the Net Gain Consultation that the price of a biodiversity credit should incentivise on-site habitat retention and local compensation, reflecting the proposed ‘spatial hierarchy’, and proposed a price range of £9,000 and £15,000 per credit. However many consultees objected that prices in this range are likely to be lower than the cost of – and therefore disincentivise – on site habitat retention and local compensation.
This reflects the tension referred to above. On-site/local habitat protection and compensation are important, but the government has broader objectives to:
- create a competitive national market in habitat compensation. The Bill specifically requires the Secretary of State to have regard to the need to set the price at such a level that the registration of BGSs is not discouraged (s.92(4));
- increase the efficiency of habitat enhancement and the connectivity between habitats. Note that the areas where the most biodiversity credits are purchased may not offer habitat enhancement opportunities with the highest biodiversity value;
- fulfil the 25 Year Environment Plan objective to restore habitats nationally and to create an additional 400,000ha of protected land in the UK for nature recovery by 2030.
In support of these aims biodiversity credits may need to be ‘spent’ on habitat works at potentially greater distances from the relevant development – at strategic and possibly national levels.
Plan more
The government has promised a review of the proposed biodiversity credit price range. Pricing is a crude tool, though. The review may do little to reconcile the spatial/ mitigation hierarchies and other local considerations with the government’s broader objectives.
In this context, local authorities will need to be proactive to ensure that the location of gains is appropriately directed. The absence of larger than local plan-making which can allocate meaningful strategic compensation sites is a challenge. Local nature recovery strategies (LNRSs) (Gain Starts with Recovery) will therefore be crucial in identifying on-site gain opportunities and candidate biodiversity gain sites that maximise both cumulative biodiversity gains and related benefits for those affected by development (i.e. new green spaces, cleaner air, etc.).
