Response to the Natural Capital Committee Comments on Net Gain

Whilst the advice on environmental net gain recently given to Government by the Natural Capital Committee (NCC) has some welcome recommendations that Environment Bank agree with, some of the reporting of its recommendations have been confused.

We are very much of the view, based on our extensive experience of establishing biodiversity net gain sites as compensation for development, that a centrally located tariff based system for ‘collecting’ funds from developments in order to deliver biodiversity net gain (BNG) would neither work nor deliver restoration of biodiversity in the UK. This is the welcome conclusion of the recent recommendations from the NCC. However, this advice has been misreported by the publication Edie in which it says that biodiversity net gain must not rely on biodiversity offsetting. This is entirely not what the NCC has said.

Our own work at the Environment Bank has investigated the relative costs of delivering biodiversity net gain on-site versus off-site, as we have reported elsewhere. In a nutshell, an average large housing development of 100ha, based on existing average land cover types and extents, using the Defra biodiversity impact accounting metric, would give rise to the loss of 390 biodiversity units. Applying 10% net gain means that the development must provide c.430 units. With 80% developable land (the rest being public open space that cannot be classed as of value to biodiversity because it is used for recreation, walking dogs, football etc.) it becomes immediately obvious that as one increases the amount of the BNG requirement provided on-site, the land available for development decreases. Our detailed calculations have shown that providing only 20% of the full BNG requirement at 10% net gain causes a loss of value from the use of development land of c.£50m and a further c.£150m from the loss of revenue from the houses that cannot be built (requiring yet more land for houses to meet targets). But, habitat banks (offsite strategically placed areas of 40-100ha) as Environment Bank is establishing, can deliver the entire BNG requirement of the whole development for a cost of c.£5m.

A national tariff wouldn’t account for regional variations

We set up land for new wildlife habitat and raise conservation credits on the basis of creation and management interventions. These credits are sold to developers to deliver their BNG beyond that which is placed within the development site boundary. A national tariff would not allow for geographical and economic variations in delivery across the country with the significant risk that in some areas the funding would not be sufficient to deliver long-term biodiversity conservation in the countryside. In other areas, developers may have to pay more than they might otherwise. Therefore, as in our model, bespoke large-scale habitat banks are the way forward. BNG therefore definitely does require bespoke large-scale biodiversity offset sites (habitat banks) to ensure that the system works.

Environmental net gain

The NCC also recommend wider environmental net gain (ENG) whereby all land users that create environmental impacts or damage must be made to compensate for that impact. There is a range of non-biodiversity impacts created by development that should, in the future, be dealt with in similar fashion to BNG ie as environmental net gain or ENG. However, I am adamantly opposed to any idea that BNG should be applied as part of a wider ENG analysis and delivery mechanism not least because this would take a number of years and we don’t have time to wait to restore biodiversity in this country. We need to get on with it. It is naïve to think that we could have an all-encompassing package of costed measures that developers would pay for without severely delaying the rollout of the much needed BNG programme.

Recent critics of net gain

A final point. There are still a few people who consider BNG to be a bad thing because it facilitates development. This is a weird view. Development will continue and so it is critically important that we, as a society, have an easily adopted mechanism for getting development to pay properly to compensate for its impacts and use this funding to invest into the natural environment at scale. Biodiversity has failed to be protected by public and third sector funding. Why would anyone be against securing much-needed money from the private/development sector when it is used to restore the UK’s dwindling biodiversity? Those who hold the view that BNG is bad really need to come up with funding alternatives if they want to be taken seriously. I have yet to hear any of the naysayers make any such contribution to the debate.

Professor David Hill CBE DPhil(Oxon) Chairman





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