On-site Biodiversity Net Gain delivery has very limited value – off-site provision will become the norm once the BNG policy is mandated into law
I set up the Environment Bank back in 2007 because I was especially concerned at the way biodiversity was being treated within the planning and development control industry. The main issue is that we design on-site mitigation for biodiversity impacts to facilitate the development being permitted, only to find that for a variety of reasons the mitigation never delivers what it was supposed to. Personnel change; developers sell the site on with planning permission and future owners fail to sign up to the required mitigation; developers come back to vary the mitigation details once permission has been received – for example stating that it impacts on viability once the development has started; planning authorities hardly ever take enforcement measures for mitigation failure etc.
I quickly came to realise that we were largely wasting our time if we truly wanted the planning system to deliver a better deal for wildlife. That is why I introduced the concept of biodiversity offsetting and gains for nature from development (biodiversity net gain – BNG) making biodiversity delivery independent from the developer – leaving them to get on with doing what they do best, without the liabilities.
That doesn’t mean to say that I disagree with providing great place-making, but I do disagree that proper biodiversity conservation can be delivered at scale and maintained for the long-term within a development site. The main problem with the BNG policy as it currently stands is that too much emphasis is placed on delivering BNG within the development site boundary – the very reason I set up the Environment Bank was to tackle this problem. On-site BNG delivers little for wildlife and misses a major opportunity to finance ambitions for the nature recovery network. We won’t reverse biodiversity loss by fiddling around with fragments within a housing scheme.
There is an easily challengeable view that the BNG requirement can be ‘lost’ within the development so that the developer doesn’t have to pay real ££’s to enable BNG to be provided off-site in a strategically located place that would be a major benefit for biodiversity. We expect to see off-site solutions becoming the preferred option once the costs of BNG on-site are realised as a result of the transparency afforded by the mandatory regime, in terms of a reduction in net developable area, loss of developable land for which development land prices have been paid, and 30 years of funding put forward in an upfront secured account.
And now a research study has provided the evidence to demonstrate the flaws in on-site delivery of biodiversity. The excellent paper by Sophus zu Ermgassen from the Durrell Institute of Conservation and Ecology, and colleagues, is the first evaluation of the outcomes of the biodiversity net gain policy. They assessed six local councils already implementing BNG policy prior to it becoming mandatory through the enactment of the Environment Bill in autumn this year, covering over 1000ha of development footprint in 54 development schemes.
The study found that credit purchases for delivering BNG off-site applied to only 5% of all biodiversity units ie. 95% of all the biodiversity units delivered under biodiversity net gain currently come from landscaping measures and habitat enhancements within the developments, or from directly adjacent land (which usually suffers disturbance from the development). In the authors words ‘This means that, instead of delivering biodiversity gain in line with the Lawton principles of “more, bigger, better, more joined up”, it is, in general, creating small, disjointed areas of habitat within developments’.
The study also demonstrated a problem with governance of the on-site delivery, again something I have been saying for many years. They highlight that the government is putting a lot of effort into monitoring and regulating biodiversity units delivered off-site via the biodiversity offsetting market (there are 59 people in Defra and Natural England working on this) but are ignoring what happens with the BNG delivered on-site. If 95% of the BNG is through on-site habitat enhancements, robust mechanisms are needed to ensure compliance of on-site habitat enhancement in accordance with the promises made by the developer. However, the study found that failure to create habitat of a certain condition, promised in the initial planning application, may fall below the threshold used by local government to decide whether or not to pursue planning enforcement action. In other words, 95% of the promised nature benefits of BNG might be unenforceable as it currently stands. A further issue was shown to be caused by ecologists misrepresenting habitat types – if neutral grassland is incorrectly badged as modified grassland, the amount of compensatory credits needed is halved.
I have repeatedly advised Natural England that all on-site BNG provision must be registered on the Government registry in the same way as all off-site provision needs to be registered. In addition, developers must be required to lock up the 30-years of funding needed for the management of the on-site BNG by placing it into an Escrow account independent of the developer, otherwise there is no guarantee that the gains will be realised. Failure to realise the gains, on the basis of which a permission has been granted, would arguably invalidate the planning permission. So, analysis of the biodiversity gain plan is likely to be used by third-party objectors to a development with major repercussions for planning authorities.
The study concluded that it is unreasonable to expect BNG to deliver anything of value to nature recovery in the wider countryside – the small fragments created within a development site boundary add up to very little even if their successful creation and management could be enforced. It would therefore be better to cap the on-site BNG component to say a maximum of 20% of the overall BNG requirement (my suggestion is 20%) and to then require developments to purchase conservation credits (eg from the Environment Bank or other provider) for locally strategic sites established for that purpose. We call these Habitat Banks and they enable multiple developments in an area to be compliant with the new policy as it transitions into planning law.
We are now embarking on a major investment (c£200m) into land in order to establish these habitat banks in every planning authority area and to raise and sell conservation credits in a frictionless and easy way so that developers can comply with the BNG mandate and planning authorities can discharge their legal duties for biodiversity. Within five years we will have numerous large-scale sites that provide an income stream for landholders, making nature economically visible, creating an expanded nature conservation network and a suite of new nature reserves.
The Environment Bank
 zu Ermgassen, S.O.S.E., Marsh, S., Ryland, K., Church, E., Marsh, R.,Bull, J.W. (2021). Exploring the ecological outcomes of mandatory biodiversity net gain using evidence from early-adopter jurisdictions in England. Conservation Letters., e12820. https://doi.org/10.1111/conl.12820.
David is chairman and founding owner of The Environment Bank Ltd which he set up in 2006 to introduce the concept of compensation, via biodiversity offsetting and habitat banking, into the UK because of his concerns at the way biodiversity was treated within the planning and development sector.
David’s concept of biodiversity compensation, ensuring developments provide net gains to biodiversity, has been embedded in the government’s 25-year Environment Plan and National Planning Policy Framework and is being mandated through the enactment of the Environment Bill in autumn 2021 such that biodiversity net gain will be a requirement on all development’.