Biodiversity Net Gain - As the Government stalls, the industry presses on

The Environment Act was granted Royal Assent just under a year ago. At the time, the development industry was somewhat circumspect about the requirement for a minimum 10% biodiversity uplift on the majority of new developments, while the Government enthused about its potential to address net zero.

Following a year of significant political upheaval and altered priorities, Defra has postponed the November implementation to January.  In the meantime, however, some developers have become more positive about biodiversity net gain (BNG) and its benefits. 

BNG - A popular decision?

The recent decision appears to have been prompted by the House of Lords Built Environment Committee report The Impact of Environmental Regulations on Development, which found that smaller developers would be disproportionally affected by BNG. Lord Moylan, chair of the committee, went as far as to say, ‘The current approach to managing any conflict between new homes and the needs of the environment is failing to deliver for either side.’ 

It is probably no coincidence that the Government’s decision to delay BNG implementation followed its decision to dilute net zero targets. The net zero announcement was cited by some as a piece of populist electioneering. But on BNG, my impression from talking to industry colleagues and backed up by Carter Jonas’ extensive research into local planning authorities (LPAs)’ adoption of BNG, suggests that BNG is far from unwelcome: many clients, having rushed to prepare for the November implementation are irritated by the delay. 

Numerous developers are embracing BNG as an important part of their ESG responsibilities. The country’s largest housebuilder, Barratt David Wilson has been delivering BNG for two years ahead of the statutory implementation through its work with the RSPB. At Barratt’s flagship eco-development, Kingsbrook, breeding pairs of red-listed birds (those most in need of urgent help) had risen from two to 147, while the bee population had more than doubled. The developer’s research also confirms that these enhancements are appreciated by purchasers. 

Not only does BNG address corporate ESG targets, but it also responds to a greater public awareness towards the environment. 

Indeed, it was the force of public opinion in favour of greater environmental protections that led Cambridge City Council and other LPAs to require a minimum 20% BNG, in excess of the Government minimum requirement.  

In support of BNG, Homes England quotes from a survey, The People and Nature, which found 94% of adults who visited a green and natural space felt spending time outdoors was good for their physical health and 92% felt it was good for their mental health. It goes on to say that ‘BNG helps achieve the Building for a Healthy Life standard. This standard is a tool that we use to drive up design quality. Nature is integral to its criteria: it promotes safeguarding existing natural connections such as hedgerows, the creation of a strong landscape strategy, providing opportunities to reintroduce lost habitats and species.’ 

Research by the European Environment Agency demonstrates an increased recognition and understanding of biodiversity. As far back as 2018, 80% of respondents in the EU and UK considered biodiversity loss a serious problem. Most respondents said that we have a responsibility to look after nature (96%), that halting biodiversity loss it is essential to tackling climate change (95%) and is important for human health and well-being (93%). Increasingly, respondents ‘totally agree’ that addressing biodiversity loss is important for long-term economic development (62%) and the production of goods (61%). All anecdotal research post-pandemic would suggest that this concern has increased since.  

 

Outstanding concerns 

 It would be wrong, however, to describe a scenario in which the entire development industry was welcoming of what is, in reality, another development tax. The House of Lords committee’s caution came about following concerns aired by the Home Builders Federation (HBF) which represents SME housebuilders. A year ago, the HBF claimed that housebuilders face a £4.5 billion annual hike in taxes and red tape due to the ‘creeping cumulative burden of new financial regulations and policies’. This, the HBF claims, will have a critical impact on the industry and its ability to deliver on Government housing delivery aspirations. Of the £4.5 billion annual costs that the HBF describes, BNG is costed at no less than £256 million. Bearing in mind the recent fall in house prices, housebuilders’ concerns may have increased in the past year. 

Admittedly it is both easier and more strategically beneficial for larger, national developers to embrace the change. Easier because those developing larger communities have greater flexibility and variety of opportunities for initiating BNG; strategically beneficial because partnerships with habitat banks and other organisations are more efficient at scale, because directors have a requirement to report on ESG and because their reputation must be safeguarded across the country.  

 

Potential to profit?

The HBF’s figure was a successful headline-grabber, but it does not take into account the indirect benefits – financial and otherwise – of BNG.  

Unquestionably, people choose new homes on developments which offer substantial green spaces for recreation and attractive views. Community orchards and allotments are also popular, and every popular initiative invariably raises the values.  

To my knowledge, a cost/benefit analysis of BNG is yet to be attempted (although The Land Trust produces some very robust figures in support of ‘greening’ housing developments) - but there are indisputable advantages. 

In addition to those benefits already described, the provision of natural spaces invariably plays a role in gaining planning consent. Many planning permissions that Carter Jonas has achieved have been contingent on providing green spaces. In achieving planning consent for a retirement community on land within Cambridge’s Green Belt, the provision of a country park delivering significant biodiversity net gain was instrumental in securing Green Belt release: an incalculable but indisputable financial benefit. 

Conclusion 

Two months might be a long time in politics, but it’s a very short time in planning. In reality, a plethora of potential set-backs could result in a planning application that was submitted in October being postponed until January. So developers and planning consultants have no option but to play the long game. 

We need certainty in the form of secondary legislation, full guidance and definite timescales for implementation. We need reassurance that LPAs have appropriate resourcing in place to prevent planning applications being delayed on BNG grounds. We need to know that BNG is not going to be kicked further down the road. 

But in the meantime, enlightened developers will continue to aspire to high standards which meet with public approval and address genuine concerns, regardless of political opinion.