Whether you are thinking about setting up a BNG habitat bank, or are in the process of doing so, phasing can be one of the most important considerations.
When creating a Habitat Bank you will need to decide on what areas and number of phases you will use to roll out your habitat bank as this will inform how/where you will start works (if not starting all habitat works at once), what units you might prefer to sell, and when you commit those phase areas to the 30-year term. There are alternative phasing styles to consider which we have recently developed from trading units in the emerging marketplace, that could be of benefit to you and believe could be justifiable to Local Planning Authorities (LPAs) and Responsible Bodies (RBs).
- “Fixed Phasing”
If you have already created your HMMP you will have likely decided on your phases based on your opportunity costs for the land used, i.e. you may want to continue to farm the most productive land for as long as possible, the capital and management costs of implementing the habitat works and the practicality of doing so (e.g. avoiding dividing up fields if using stock).
There are benefits and negatives to using either multiple smaller phases or fewer larger phases. As well as the points above, each phase will have its own monitoring schedule where you will need to pay the cost of a site visit and report and the LPA’s costs of reviewing this. Whilst the frequency of these varies, it is likely to occur on seven occasions throughout the term for each phase. We include clauses where the survey points/dates, across multiple phases, are aligned where possible, however it is likely that costs will still be increased. The benefit, of course, is that until a phase goes live and units are sold, a phase is not committed to and can be ‘parachuted’ out of the habitat bank. These considerations need weighing up when completing the HMMP and also whether a phase is based on the pre-exiting field areas, or whether it is based on specific habitat (e.g. phase 1 is grassland improvement, phase 2 is woodland creation). The latter method may aid when it comes to sales as you can pick and choose to activate a specific habitat but the issue is that selling a few units of woodland commits all the woodland creation in that phase.
- “Flexible Phasing”
However, as our knowledge of the market increases, we are now considering alternative approaches. With our idea of Flexible Phasing we hope you would not need your LPA’s or RB’s consent to propose phasing plans and areas until they are needed for a sale and the habitat works need to start.
This extra flexibility would allow the boundaries and size of the phases to be created not now but at the point of a sale of units and may not need agreement from the LPA as long as they do not negatively impact the creation or outcome of the habitat proposals. The owner will remain responsible for delivering the ecological outcomes even if it takes longer or costs more.
This flexibility means you would only need to commit land into a phase to cover a specific sales requirement if you wished or include a larger area should you wish to complete more of the works at once, but choosing what habitat types are included in that particular phase to meet market demand at that time. If it results in many more phases, costs are likely to increase, however you would consider at the time the extra costs as you decide on what each phase should be. This means you are not going to the expense of creating and enhancing areas of habitats that may not be in demand at that time. Most LPAs and RBs are happy to align the monitoring dates to reduce the costs of extra phases starting at different times, so ultimately these extra costs may be contained.
Without this flexibility you are having to guess forward maybe many of years as to what developers will need in the way of a bundle of habitat types. This is very difficult if not impossible to predict. An example of how this demand might change will be with the Nationally Significant Infrastructure Projects which will increase demand considerably, but not for a few years, after next May when included in the BNG system. We currently find purchasers want to acquire all the different types of habitat they need for a development site from one supplier where possible. Please follow this link for an analysis of the different levels of demand we have for habitat types . We appreciate things have moved on since we first commented on phasing arrangements, and of course we cannot predict things going forward which is why this extra flexibility could make a lot of difference.
We should be clear that this proposal is yet to be accepted by a monitoring body, and we do not yet know if it will be accepted by your LPA or RB. They may not agree to this based on legal, ecological or just what other LPAs have already done. The monitoring body (LPA or RB) will want to know in advance what will be involved so they can calculate the costs, time and resources involved before agreeing to and accepting the long-term obligation of monitoring, and these may with some LPAs/RBs be required to be paid before a phase is initiated. Some ask for payment rates to be set for the whole 30 thirty years at the start of an agreement. Other LPAs and RBs ask for payment as and when you complete the ongoing monitoring. So this type of phasing will be more likely to be accepted if you pay based for what work is done at rates per task. Ie they do not set a fixed sum in advance. We do not believe it should make any difference as to how the phases are monitored just because they know in advance what they are going to be. This approach may not suit all habitat banks but for some there could be considerable benefits, and we feel bound to raise this approach with you even though we cannot guarantee success with every LPA/RB.
If this suggestion or even a compromised version of it is accepted, the HMMP may need to be amended to align with this approach as there would be no map of phasing on the signing of the s106/conservation covenant.
Conclusion
This Flexible Phasing is the most beneficial option to you, however if it is not accepted by the LPA you could increase the number of ‘fixed’ phases (ones agreed in advance before the S106/CC is signed). We could increase the number of phases as you wish, including basing them on the individual habitat in each parcel as already recorded in your BNG Metric or base them on area of whatever size you considered most appropriate. Whilst this would also increase monitoring costs if all of them started completely separately, our usual S106/CC clauses would allow the monitoring to be combined. If say three phases all began at once, in effect they would be amalgamated and form one larger phase for monitoring purposes. This allows you to approach phases as you wish, whether based on costs of creating them or based on potential sales and demand. This assumes all agreements have total flexibility, as ours do, as to which phases are started and when. The benefit is you can choose from all the individual phases over the site which of these smaller phases you want to start in response to market demand at the time. You would bundle up the habitat types that are most popular.
If there was agreement to flexible phasing, it could be very beneficial to you, so we suggest you ask whether your LPA/RB will accept this approach if you are at this stage of your project. If you are already in negotiations for the S106/CC you can still propose either flexible phasing or increasing the number of phases, but it may cause delays and increase costs as both the HMMP and S106/CC will need revisiting and negotiating, assuming these proposals are not rejected out of hand.
If you are at any stage of your project do call if you would like to discuss these options.
If we are already acting for you creating a habitat bank or are putting together the HMMP for you, we will need to know whether you will want us to proceed with any of these options or leave things as they are.
Please contact Alasdair Squires or Hugh Townsend to discuss these options and their impact and Henry Chamberlain or Hugh Townsend about current market demand.