As we get closer to the 11th November 2023, Biodiversity Net Gain is set to become mandatory with a range of developments required to demonstrate a 10% uplift in habitat biodiversity before their planning permission is approved. It is encouraging to see DEFRA showing signs of gearing up for this deadline with two publications issued on the 27th July.
One concerns how to be a “responsible body”, monitoring conservation covenants over offset land, the other on the indicative rates developers can pay for ‘statutory credits’ if they cannot find any BNG units in the open marketplace. Indicative prices suggest that for each BNG unit required a developer will pay a minimum of at least £84,000.
“These are surprisingly high values and clearly DEFRA feel there may be a healthy demand for open-market BNG units”.
Statutory Credits
Whilst the mitigation hierarchy dictates that BNG unit creation should first be attempted ‘onsite’ with the option for ‘offsite’ works where this is not possible, there remains the question of what happens when this second option is not available. This situation may arise more often than would be expected with the requirement that certain types of habitat, especially the rarer ones, have to be replaced by the exact same type.
The Government’s solution to this is the ‘Statutory Credit’, which is the equivalent of a BNG unit specifically bought from the Secretary of State when there is no other viable option. The developer must have provided evidence to their LPA that this is so. When this is the case, they would be able to buy credits via Natural England to have their planning application signed off. The projects to supply these are currently in progress including some large-scale pilot schemes.
These credits are deliberately designed to be uncompetitive, pricewise, and will be set at a much higher price than the Government’s prediction of the expected average. This will be compounded by credits having the equivalent of a ‘spatial’ multiplier at the furthest distance to the development site (further afield than an adjacent LPA or NCA). This means that where a developer would normally have had to purchase one BNG unit if from an offsite within the same LPA/NCA, when using this statutory credit option, they would need to purchase two ‘credits’ for each BNG unit required.
DEFRA have provided indicative prices for these credits see here based on habitat distinctiveness, rarity and difficulty to create/enhance.
Some low distinctiveness and several medium distinctiveness types of habitats such as some grasslands, heathlands and shrub are £84,000/unit (2 x £42,000/credit); woodland £96,000/unit (2 x £48,000/credit); and non-priority ponds £250,000/unit (2 x £125,000 /credit).
High distinctiveness habitats range from £84,000/unit (2 x £42,000/credit) for the likes of traditional orchards; £132,000/unit (2 x £66,000/credit) for wet woodland; and £250,000/unit (2 x £125,000/credit) for coastal lagoons. Some high distinctiveness grasslands can reach £96,000/unit (2 x £48,000/credit). Certain lakes such as peat and marl lakes are at the top end at £1,300,000/unit (2 x £650,000/credit).
Conservation Covenants and responsible bodies
A ‘responsible body’ is required to monitor a BNG project and ensure it meets the agreed aims and objectives. This can be a local authority or a public body or charity, or a non-public body where at least some of its main purposes or functions relate to conservation, or a body other than a public body or charity, where at least some of its main activities relate to conservation.
The main conservation objectives of the body need to involve the actual conservation or restoration of the natural environment and resources itself, rather than having another main purpose.
Application forms are now available for this role with confirmation or rejection by DEFRA to be received after 12 weeks. Responsibilities will include the registration of conservation covenants on the local authority land charges register and submission of annual returns for all covenants the organisation holds.
“We await further clarification on the potential for responsible bodies to monitor agreements whilst also being the ones selling the units to developers or managing habitats on the offset land and acting for offsetting landowners at the same time as drawing up the conservation covenants. There is some indication that both LPAs and private organisations may try to fulfil this role, and this may lead to potential conflicts of interest. Whilst as Chartered Surveyors we would avoid such conflicts, other businesses offering this service may not be so regulated leading to potential issues down the line, risking the project and causing unnecessary complications. This adds to the list of checks if approached by businesses offering to do everything with “no risk” to offsetting landowners where already these businesses may be taking up to 75% of the project’s total expected sale proceeds.”
Contact us for advice, surveys and planning for all environmental credits read more here or contact bng@townsendcharteredsurveyors.co.uk
