Welcome to our ‘BN Genius or Biodiversity Net Pain’ series, in which our managing director, Tom Docker, reflects on key areas of discussion arising from the rollout of statutory Biodiversity Net Gain (BNG) in February 2024. Here in part three, Tom reflects on the challenges for small developments in achieving BNG.
We’re still in the early days of mandatory BNG, but there is already a growing imbalance between large and small developments when it comes to the practicalities of achieving a 10% gain. In my day job, I spend a lot of time liaising with developers of all types, with this issue regularly being raised as a point of contention.
Common areas of frustration for small sites are a perception of excessive bureaucracy, the difficulty of meeting trading rules, and the difficulty in achieving small biodiversity offsets in the current BNG unit/credit market. The latter point in particular, is causing headaches for many of our clients.
The Small Offset Conundrum
Large sites tend to afford greater opportunities to achieve on-site gain, whereas smaller sites are more likely to rely on offsetting solutions to achieve their mandatory 10%. Conversely, however, the emerging habitat bank market tends to favour larger developments and there is often a minimum threshold for the number of biodiversity units a developer can purchase in one transaction.
Therefore, a small development may face a situation where it only needs a fraction of a biodiversity unit to achieve a 10% gain but is forced to buy a whole unit at disproportionate cost. This issue can be shouldered by developers who have multiple small projects that are geographically clustered as a biodiversity unit can be shared between projects, but it can be a significant obstacle to small, discrete projects achieving BNG.
There is an obvious commercial opportunity for habitat banks that are willing to sell fractions of biodiversity units, so I’m hopeful that market forces will help to address this tricky issue. There are some very forward-thinking minds in the habitat banking work and I’m confident that a solution won’t be far away.
A more fundamental question is whether a system that requires the offsetting of fractions of a biodiversity unit is truly fit for purpose.
Planning Reform?
I remain a supporter of BNG and consider it to be a transformational tool if applied correctly, but it is a tool that works best when applied at landscape scale. When applied for small developments it can be the equivalent of using a Sherman tank to take your kids to school – you get there in the end, but it takes ages and there’s a lot of collateral damage on the way. It also doesn’t always support the objective of delivering the right habitat in the right place. Changing and simplifying the rules around BNG for small sites would provide significant benefits and allow efforts to be focused on the recovery of biodiversity where it is most needed.
The new Labour government has made positive noise about planning reform and has an opportunity to deliver change that could better support the protection and enhancement of biodiversity. On 20 July 2024 the Ministry of Housing, Communities and Local Government and the Department for Environment, Food and Rural Affairs (DEFRA) wrote to stakeholders in the environment sector, including the Wildlife Trust family of which Middlemarch is a proud member, seeking a dialogue and collaboration on any transformation of the planning system. Middlemarch will be joining the Wildlife Trust Consultancies in submitting representations in response to this letter and will proactively seek opportunities for positive engagement with the government to create a planning system that supports sustainable development while better preserving our natural environment.
A change to the BNG approach for small development projects would be a small but very important part of any reform and is something we will try to influence.
This topic will be a big issue in the coming months. I will return to it and provide further updates in future blogs – watch this space.
Catch up on parts one and two of our BN Genius or Biodiversity Net Pain series:
