Biodiversity Net Gain is a new concept introduced by the Environment Bill which will require all developers to deliver a 10% increase in biodiversity in respect of any new development. Our previous blog introduced the concept here. Since our previous blog Natural England has produced The Biodiversity Metric 3.0 to be able to score existing sites and calculate the 10% gain required.
The Metric has been carefully derived to enable a score of the habitat (in units) of the developed area and as implied by the name it is currently on the 3rd version. This is based on the type and quality of the habitat as well as its strategic significance and distinctiveness. At the moment scrubland is valued higher under the Metric than newly planted native woodland and therefore we may yet see further revisions. Once a site has been scored and the number of habitat units determined, the developer will then need to be able to create or secure a site which achieves a habitat with a score of at least 10% more than the area being developed. This offset site must be secured for 30 years and be able to deliver the environmental benefits for the entire time.
Opportunities for farmers
It appears that all developers will likely need additional land to secure the environmental benefits required by the Environment Bill and therefore this is an opportunity for landowners to enter agreements to meet these requirements. It may also be possible to layer this private finance with options from the new Environmental Land Management Scheme to get paid twice for delivering the same natural habitat. This may provide a cost effective diversification opportunity or present a potential retirement option.
However, given the long term nature of the required term of any agreement it is essential that the right advice is taken in good time. This type of agreement may be considered as a “disposal” of land and the tax treatment of this will need to be carefully considered. Any agreement is also likely to push the burden of the physical land management onto the landowner and therefore the ongoing maintenance and delivery of the habitat score will become their responsibility. Finally, if the delivery of the habitat requires taking some of the land out of agricultural production this may also have further planning and tax consequences.
There may be opportunities but the devil will be in the detail with the terms of any agreement. The long term nature of an agreement means that serious consideration needs to be undertaken of all the potential impacts ahead of sign up.
Risks for developers
This policy will also add additional burden and red tape for all of those submitting planning applications. Any potential exemptions are not yet confirmed but it is considered permitted development and householder applications may fall outside of the scope of the process. Outside of these types of application it is likely that all other applications will need to go through the process of scoring the habitat and identifying a suitable area for enhancement. At the moment it is understood that it will be preferable for this to be on or as close to the development site as possible. However, there may be further progress to allow designated areas within the county to be targeted as enhancement areas which will attract higher scoring values. We are starting to see that the requirement for biodiversity enhancement is starting to be added as a pre-commencement condition to a planning approval, however going forward it may be prioritised and be required as a submission document.
If you are considering a development, it is worth understanding the potential implications of the Biodiversity Net Gain requirements as soon as possible to plan and budget accurately. It may mean the design of your project is altered to leave space for a new habitat or you may start to work with neighbouring landowners to target higher scoring areas. The balance between the area of land required for the development and the quality of the habitat ultimately enhanced and protected will be key to ensuring the best value for both the developer and landowner. If the new habitat cannot be created on site then the agreement between the developer and landowner will need to be carefully scrutinised to ensure both parties are fully aware of their responsibilities and the wider impacts this type of land management has on both parties.
If you have any questions about Biodiversity Net Gain and its impacts on your future projects please call the Carver Knowles team.