Locations
This briefing is focused on the legal mechanisms available to ensure Biodiversity Net Gain (BNG) is delivered.
BNG obligation recap
The Environment Act 2021 (EA 2021) has introduced a new requirement for all new planning applications (subject to a limited number of exceptions) to deliver BNG of at least 10% over the existing biodiversity baseline condition of the proposed development site.
This requirement will apply to most applications submitted from a date to be confirmed by the Government, expected to be in January 2024, although small sites will not need to comply until April 2024.
Nationally significant developments authorised under the Development Consent Order procedure will also need to comply with the BNG obligation in due course, currently anticipated to be during 2025.
The Government issued draft BNG planning guidance on 29 November 2023.
The draft guidance will be updated once the date of the coming into force of the relevant BNG Regulations is confirmed. Instead, there is a separate requirement that information about the general biodiversity gain condition must be included on the face of the written decision notice.
The EA 2021 imposes this mandatory BNG obligation by way of a planning condition that is deemed to apply to all applicable planning permissions granted once this new regime comes into force.
The condition will require the applicant to produce a biodiversity gain plan to the local planning authority (LPA) showing that BNG of at least 10% will be delivered and maintained for at least 30 years.
Development cannot lawfully commence until this plan has been approved by the LPA.
Securing BNG
Before approving a biodiversity gain plan, the LPA will need to be satisfied that acceptable legal mechanisms are in place to deliver and maintain this BNG for at least 30 years.
This will be achieved by one or more of the following:
1. A planning condition or conditions included as part of the planning permission;
2. A section 106 planning agreement; and/or
3. A conservation covenant.
In deciding which mechanism(s) will be acceptable, the LPA will need to consider whether the BNG will be delivered on the application site, elsewhere or biodiversity credits purchased.
In doing this, LPAs are required to take account of the Biodiversity Gain Hierarchy, which emphasises that on-site BNG is to be preferred, followed by off-site and, as a last resort, biodiversity credits.
The LPA will also need to consider what ongoing role it wishes to take in monitoring the delivery and maintenance of the BNG.
1. Planning Conditions
The LPA may decide to include one or more planning conditions relating to the delivery of BNG within the application site, and the monitoring, reporting on and maintenance of these onsite habitat enhancements for at least 30 years.
The LPA could also specify where that BNG will be delivered by reference to approved plans (assuming that the applicant has identified this during the application process, and that it will be on the application site).
The draft guidance makes clear that the LPA must include the deemed planning condition in the list of planning conditions imposed in the written notice granting planning permission.
2. Section 106 Agreement
The LPA may also encourage the applicant to enter into a s.106 agreement to address matters which cannot be dealt with in a planning condition (for example, if they relate to off-site provision of BNG or financial matters including the purchase of biodiversity credits).
The draft guidance suggests the following could be included in a s.106 agreement:-
- The cost of delivering, managing and monitoring BNG;
- The delivery of off-site BNG; and/or
- The use of statutory biodiversity credits.
If the applicant is proposing the use of a conservation covenant to deliver BNG, a draft of the proposed covenant could be annexed to a s.106 agreement.
The LPA will need to be satisfied that the provisions of the s.106 agreement will deliver the required level of BNG and that this will be guaranteed for at least 30 years, so is likely to insist on quite tight drafting in a s.106 planning agreement.
On the other hand, an applicant will no doubt be looking for a degree of flexibility in how it will secure at least a BNG of 10%.
There will therefore be a need for all parties to be innovative as they approach the new challenges of BNG in future s.106 planning agreements.
3. Conservation covenants
These have been introduced by the EA 2021 and are private, voluntary agreements between a landowner and responsible body to conserve the natural or heritage features of the land which will be the subject of the covenant.
The covenant must be both for the public good and have a conservation purpose. Once entered into, it is registered as a local land charge and is then legally binding on future landowners, and on any responsible body that takes on the conservation covenant from another responsible body.
The covenant can impose both positive obligations (for example, to carry out conservation works) and negative obligations (for example, not to allow the areas of land set aside for BNG to be developed).
A responsible body can be a local authority, a public body or charity where at least some of its main purposes or functions relate to conservation, or a private sector organisation where at least some of its main activities relate to conservation.
A landowner may be either the freeholder, or a leaseholder, who must have a lease with more than seven years left to run.
In practice, however, given that BNG must be maintained for at least 30 years, a leaseholder would need to have at least that lease period left to run if a conservation covenant is going to be an acceptable vehicle to secure BNG.
It will be interesting to see which bodies apply to the government to be registered as responsible bodies.
Will local authorities wish to take on the burden of regulating a conservation covenant, or will they prefer to rely on a combination of planning conditions (for on-site BNG) and s.106 agreements?
Public bodies, such as Natural England, can be expected to apply to be responsible bodies.
Before entering into conservation covenants, responsible bodies will want to understand how they will be reimbursed for the costs of regulating the provisions of that covenant (which include annual reporting requirements).
Next steps
Once the BNG Regulations pass through Parliament and BNG commences (expected to be during January 2024), both planning applicants and LPAs will need to agree on the mechanisms that will deliver BNG, which will involve new planning conditions, novel drafting in s.106 planning agreements, and the potential roll out of conservation covenants.
We regularly work with developers and landowners on the legal aspects of the delivery of BNG, both on-site and off-site, in the context of a variety of development projects.
If you would like to discuss the opportunities and challenges that BNG will present, please contact a member of Fieldfisher's Planning and Environment Group.