The new Biodiversity Net Gain (BNG) rules came into effect in February 2024, following the framework set out in the Environment Act 2021. Five months on from their introduction, how is policy translating into practise and what has been the experience so far?
Listen to our discussion in our webinar chaired by Gowling WLG Partner Helen Emmerson, where we reflect on what BNG – the Government's flagship nature restoration policy – sets out to achieve, provide an overview of the changes this brings for developers preparing planning applications and the impact this is starting to deliver.
Our panel of speakers comprise Ben Stansfield, Sustainability Partner at Gowling WLG, Alexa Culver, General Counsel at Environment Bank, George Hall, Head of Solar at Conrad Energy, and Neil Beamsley, Group Head of Biodiversity for Bellway Homes. They discuss:
- the key considerations in relation to BNG for developers, planning authorities, investors and others engaged in the real estate development sector;
- some of the differences under the new regime and in the context of the planning application process;
- areas to consider in terms of managing the delivery of BNG; and
- perspectives on the questions raised in our Q&A discussion.
Transcript
Helen Emmerson:
So, as many of you will be aware, the Biodiversity Net Gain rules came into effect on 12 February this year and, five months on from their introduction, we are going to explore a couple of things.
How is the policy translating into practice and what has been everyone's experience so far?
The panel discussion is going to last for about 40 minutes and then we will open up the Q&A at the end. So, please do submit your questions into the chat as we go along and we will allow time at the end – 15 minutes or so – to do our best to get through them all.
We have got a great panel of speakers today, all of whom are really keen to share their insights into what we have seen so far and to discuss key issues for developers, planning authorities, investors and others. So, I will ask them to introduce themselves now.
First of all, Alexa.
Alexa Culver: Hello, really great to be here. Thank you for having me. I am General Counsel at the Environment Bank. We are establishing a network of habitat banks across the country and, as General Counsel, I look after our legal relationships with landowners, legal relationships with planning authorities and responsible bodies, and legal relationships with the developers that we supply biodiversity units to.
Helen: Thank you. George.
George Hall: Good afternoon. Yes, my name is George Hall, Head of Solar for a company called Conrad Energy. We are an energy developer. We develop, build, own and operate various – about 85 different assets – around the UK; so battery sites, small gas peeking sites. My role is to focus primarily on solar farms around the UK. So, thank you very much for the invite. I am really looking forward to the discussion.
Helen: Thank you, George. Neil.
Neil Beamsley: Thank you Helen. Good afternoon everyone. I am Group Head of Biodiversity for Bellway Homes. One of the many tasks that I fulfil for the company is to approve all of our BNG strategies for new sites and new applications going forwards; so, very much involved with how we deal with BNG as a company.
Helen: Thank you, Neil. And Ben.
Ben Stansfield: Hello, I am Ben and I am a Sustainability Partner at Gowling WLG. I focus particularly on planning and environmental issues in the carbon and nature space. We are advising a lot of clients on biodiversity net gain – whether they be habitat banks, developers, public authorities, conservation charities and what have you. We are doing a lot of 106 work, some Conservation Covenants; lots of exam-type questions on regulatory processes and giving some portfolio advice and, at the moment, doing a lot of biodiversity units purchase agreements or BUPAs.
Helen: Thank you, Ben. So I am going to kick off with an easy question first and ask each of you to share your initial thoughts on what the first five months of BNG has bought for you and your industry. I want the good, the bad and the ugly please and I will start with you Neil please.
Neil: Thank you, Helen. I think in terms of the good, I think it is important to start off to say it is here and we should not underestimate the fact that it is here, because it is quite a long-winded process to get us to this stage.
I think it appears to be supported by the new Government, which is great, and I think that if we do take a step back, we have got something that is potentially 'world changing' in terms of the way in which biodiversity is viewed as part of the development process. And certainly, there are other countries around the world watching to see how things pan out in this country.
Perhaps the not so positive, I think we have still got a significant skills gap surrounding BNG; both from the developer, local authority and ecological consultant point of view. I think the BNG off-site market is still very much in development; it is not functioning yet in the way it will do at some stage in the future.
I think there are specific issues around things like Section 106 and Conservation Covenants that need to progress and mature before things really start to function in the way they are intended to, and I think, fundamentally, we are not quite sure yet what 30 years really looks like in reality. We have got the hypothetical scenarios, but not that real, clear insight in terms of how we go about delivering this thing for 30 years. So, a lot of work still to be done.
Helen: Thank you Neil. George.
George: I think first and foremost, I think the overarching programme of philosophy is great. Something we have been doing in the solar world has been using planting, screening and creating biodiversity gain for 12 years. So, we really support this and it is really good for us to actually be able to quantify exactly what we have been doing over the past dozen years in the solar industry. So, from that point of view it is fantastic and it actually does not really change an awful lot in terms of what we are doing going forwards.
The bad and the ugly is how do we monitor it? How do we look after it? And what is the impact on our landowners? And what is going to happen, as Neil suggested, at the end of 30 years and what is sort of going beyond that? I am not sure we are quite clear on what those impacts are just yet.
Helen: I suspect we may explore all that a little more over the next half an hour or so, George. Lex, how about you?
Alexa: Yes, I think the good really is the magic of a universal metric really and I know there are question marks over how appropriate the metric is for measuring biodiversity, measuring losses to biodiversity and measuring gains to biodiversity. But for any system like this to work, to get some national consensus over measurement is quite magical. It is quite an important step and recognises that we could find a way of really, scientifically, measuring and valuing nature for its worth and finding a sensible way to allow nature positive activities to continue in our corporate, modern world. So, I love the magic of a universal metric; that is a major first step and we are being watched across the globe really with what we are doing here, which I think is also really aspirational.
Then, the less good of course is the pain of implementation of anything new – you know there has been some real paralysed planning authorities that have not been resourced to look at this and not always been resourced to prepare, but they have been valiantly supported by the planning advisory service and I feel like we are almost there. The Gain Site Register is just springing to life and it feels like many of us are on the cusp. And extra specially good is the publication of the planning advisory service template Section 106 agreement for biodiversity net gain, which was a fantastic resource to release to the sector and should really help to find more confidence in our agreement making; and speed up and make the process more efficient.
Helen: Absolutely, thank you Lex. Ben, how have things been on your desk over the last five years.
Ben: So, I think the good is that there is undoubtedly a real buzz! I think in the development industry we are all talking about it. I have not heard a single client huff and puff loudly about BNG; I mean, privately, we might have wished things had gone quicker or smoother but everyone says it is a good thing and so we are talking about BNG, but we are also talking about nature and we are talking about green spaces and the wellbeing that people get. So, I think that is really positive, and I think people are using BNG too. It is not just for on-site pockets, people are now talking about big off-site, and then large-scale, recovery projects. So, it is sort of, people have grabbed it and are being ambitious with it.
On the ugly, so things that could have gone a bit better and that we can tweak to make them more beautiful – yes, picking up on Alexa's point – standardisation of agreements; that will be a wonderful thing, really, really helpful. I think the slow designation of responsible bodies, as an alternative to the local planning authority, under the 106 regime. I think, hopefully, in future that will not be an issue but it is being, I think, painfully slow.
As for the bad, I am going to be negative, I think the bad is still to come.
Alexa: No.
Ben: Trying to be controversial on a webinar. So, I think the Natural England register could be great, but I think there could be all sorts of teething problems as we start to get to grips with how that works and what have you. I think inconsistency on biodiversity gain plan approvals could be problematic for some developers, and we will have failures. We will have biodiversity net gain failures for sure and it is how we all deal with that. So, to use the football analogy, an early 'reducer' – some enforcing bodies need to get an early reducer, get really involved on day one. We're not saying do injunctions and all that kind of stuff, but just make sure those failures do not taint the whole industry, because it has to work.
Helen: Thank you, Ben. So, is the fact that BNG is now mandatory changing how you are approaching development compared to what you were doing before 12 February? So, George you mentioned a moment ago that actually you guys have been doing this anyway. We would be really interested to hear your thoughts on the mandatory piece, and then Neil as well if you could give us your thoughts from the housing developer perspective? I imagine your interactions with landowners will have changed as well. But George, first of all, please.
George: Yes, certainly. I think from our point of view, we started first looking at BNG, three to three and a half years ago in terms of being able to quantify what we are delivering. And if I take the solar farm, for example, we would be planting hedges for screening, we would be planting belts of trees, we would be planting wildflower meadow grasses as a normal procedure for us, because as part of a solar farm application we will always be suggesting the environmental and the ecological benefits. So, from that point of view nothing has changed. What has actually come along is a spreadsheet, and somebody has now put it into a score and we can now actually say our Herefordshire solar farm is 123%; that is great isn't it?! Our Somerset one is 83%, and that is fantastic!
The interesting thing now is actually we are starting to put planning applications in with the mandatory and, actually, how do we now allocate those units? And how do we allocate those scores? Because in the past, those scores were based around our screening and our landscaping piece, but now that is actually around biodiversity and how confident – going back to what Ben was saying – are we at actually delivering the 83%'s we are looking at? And actually, suddenly, it just makes us go, "Oh hang on, what happens if we have a failure? What happens if the planting does not quite work? What happens if the soil structure does not quite allow that type of wild meadow flower to grow?". So, we are now maybe providing that for our screening and for our landscaping purposes, but for our BNG we might just row back a little bit on that to not be quite so, what is the right word, over on it. We will just be a little bit... keep ourselves, or give ourselves, a bit of a buffer within that process; just in case something comes along that sideswipes us or changes within the site, because 30 years is an awful long time for these schemes to work.
Helen: Thank you, George. Neil, from the housing developer perspective?
Neil: I think from our point of view, the good thing about BNG and the processes behind this, is that is it a leveller and it should be a standardised approach to how we deal with biodiversity. And it brings normality to biodiversity as well, and I think it is backed up because it is mandatory; because it is backed up by legislation, it almost becomes and is unavoidable. Let us just crack on and deal with it. It takes that questionability around how we deal with biodiversity out of the picture. So, from that point of view that brings transparency, that brings process; and transparency and process are really good things from a development point of view because we can plan for it, and if we can plan for it, we can deal with it.
I think from a land, particularly, point of view, it has changed things already. It means we need to re-evaluate land that perhaps is not developable for housing, but could be used for BNG. So, land in a floodplain, land below overhead powerlines, or on a gas easement that you cannot develop on but you can deliver your BNG upon them. So, that will start to change how deals are structured, land values, but also the land that is available as part of those land deals. I think it is a good to think that that land is going to be managed in a much more favourable way.
I think the management is a key part of this that is really, really important not to underestimate and, particularly, the transition from planning to post-development. How that land is managed – and therefore the contract that goes around that to making sure that continuation of 30 years' worth of management in the right manner – is a really, really important part of the puzzle that we need to not underestimate, because if that does not work then BNG is not delivered. So, it is changing everything that we do, but let us not make it into a problem, let us just deal with it as another part of the planning process and be positive about it.
Helen: Thank you, Neil. Just developing those thoughts then around the monitoring and the kind of metrics... we welcome all of your thoughts, but I am just going to start with you, Lex, around the 10%; and, in fact, actually it would be really interesting to hear from any of you if you are seeing that 10% creep up? Have we got a bit of mission creep hear as well? But how is that 10% actually being measured? What does a robust monitoring strategy really look like? I would welcome your thoughts on that, please.
Alexa: Yes, of course, and I think it hints back to what George was saying too, for example, like about soil conditions. It all actually starts with some really careful due diligence on the land. Are the soil conditions right for that kind of habitat to be targeted? Is the surrounding land use, the right kind of land use to support that kind of target habitat? Would it flourish and thrive? Will it hit its target conditions? So, you have got to start with some excellent design, because you have got to build in things like climate change, water levels, soil conditions. You have got to build all of that in to give your scheme the best chance of success, within the constraints of the situation. So, it really starts with that very, very careful due diligence. You cannot just make a lowland meadow anywhere, and it is about making sure it is connecting other habitat types and it is feeding into wider local nature recovery strategies, which is so essential for getting the most of this effort, time and money.
So, it starts really with that early work. Then the rest should, in theory, be much easier, because you have got your starting conditions right, but then you have got the ground preparation, you have got the sowing, you have got the planting, you have got the seasonality of all that – that all needs to be done in a comprehensive way to suit the wider scheme.
Then you have got what is important for us... we have land managers there that live and breathe that land; they are there all the time, that is part of, for example, a wider agricultural holding that is transitioning to more sustainable agriculture. It is part of that family's assets that they really love and care about it and look after it, and they see every day what is going on. Crucially, it is about things like spot treatment of invasive species, that can really undermine a lot of ecological progress if these are allowed to get out of control. So again, management is crucial to maintaining that overall thriving habitat bank and making sure you do not find yourself getting back to some kind of scorched earth situation because it has become overrun.
Then, you have got crucially to make sure condition assessments are done regularly, that visits are done regularly and when things are not working, which is natural, that you are taking the intelligent, creative, corrective actions; you are adapting the living and breathing habitat management plan to always draw you towards those ultimate target outcomes and conditions. And so it is about being close, it is about monitoring carefully. There is also innovation in the world of monitoring that could help to take some of this cost away, but always making sure it is getting 'ground truth'. What we found, which was quite funny, was that with some of the planning authorities we were agreeing 106s with, they did not want to monitor it as much as we wanted them to. They were like, "we cannot do this every year, are you mad!". So, there has been a bit of a challenge there too, because we want these to be a real profound success, because it is in our business interest to make sure it is – it is important that it works. So, really designing it correctly first for the situation, which is in a really careful process – and that is what I think, you know, Neil you said to me before – you have had to throw out plans that are just way too ambitious for the situation. So, having that filtration exercise at the beginning is really important.
Ongoing monitoring and management, and adapting the management plan to suit the situation, is what we would say at Environment Bank.
Neil: Shall I just come in there. I think from a developer, particularly from a residential developer's point of view, I think the key thing we need to remember is that what we are doing is creating communities, as well as delivering BNG. Therefore you have got to have a balance within a site of not only creating good quality biodiverse habitat, but also creating space for people to use to walk the dog, to throw a frisbee, kick a football, all these things, And, therefore, you do have to approach the metric with a certain degree of nouse and intelligence in terms of what you can physically deliver within that space, because there are lots of competing pressures on that limited resource.
So, therefore I think it is better to be a bit more honest about the way in which the metric is structured, and if you cannot deliver your 10% without really stretching it, then perhaps off-site and on-site is the best way to go. I think in terms of that number, 10% is potentially quite a skinny margin, and so if we have a really wet winter or a really dry summer, the chance of some of those habitats not establishing in the way they should is quite high; and, therefore, if that happens you are not going to be delivering that 10%. So, certainly, the message that I am giving to my colleagues across our divisions at Bellway is that we need to aim for a little bit more, because if you aim for a little bit more than 10% then you have got a little bit of a 'flesh fund' to play with. If you do have a climate change related incident, which means that the habitats do not establish in the way that you want them to, you have still got a little bit of contingency built into the way you have structured your metrics.
So, it is about being flexible and not just treating the metric purely as an exercise in getting to 10%. It is how you get to that 10% and how you maintain 10% that is the really key part of that process.
George: I think for me, just to echo what Alexa was saying, it is all about the preparation, it is about doing your surveys. It is about understanding the soil quality. It is about getting to know the local environment that your project is in; whether that is the farmers, the parish councils. It is all about the consultation around that. It is about understanding where it sits in the landscape, and then it is the quality of the ecologist, I am afraid to say, is very, very important, to really understand that and, in probably a year's worth of surveys throughout this process, to really understand what grows, what flourishes; as we have seen this year with the weather conditions – a really a wet winter, followed by a pretty cold spring and the first half of summer. Some things are growing brilliantly at the moment and other things are going nowhere. So, we have got to have a certain amount of resilience within the scheme as well to give us that buffer that we all want, because we do not want failure at the end of the day, at all.
Alexa: And, may I just add in quickly there, just how important it is that there is funding to correct mistakes. That there is contingency funding, and it is built into the commercial model that you are putting together for this, because you've really got to make sure that these management works themselves are funded, and safely funded, in the long-term, as well as have contingency to deal with unexpected events and developments.
Helen: Thank you, so Ben we have heard Alexa talk about the really important things that we all need to think about when BNG is being delivered; whether that is being delivered by George and Conrad themselves on a project, or by the Environment Bank who are creating units to sell. And Alexa has given us a very convincing speech, but how are we going to hold her feet to the wire? How do we due diligence how this is being done? How are we going to get confident that units are going to be delivered and that 30-year piece is going to be sustained, to your point actually Lex that the funding has got to be there?
Ben: Yes, there is a real spread I think at the minute between the off-site habitat bank. So you have got people like the Environment Bank who have got some established sites and they have got their land interests sorted, they have either got some of their 106's done or are well on the way, they have got habitat management plans which are super-duper thorough, and if you ask really nicely and you are going to buy enough units I am sure Lex will take you to one of them and will point out the trees... And so the Environment Bank has a cupboard full of units all ready to buy, which is great, and so you can see with your own eyes.
At a different stage of their journey, you have got some sort of fairly nascent entities. So we are still going to do some great stuff – I am not saying because they are small and because they are at the start that they are not – but they probably have a little bit more work to do in convincing developers that their product, their units etc., are robust. And so when you enter into a biodiversity unit purchase agreement with them, they are saying that is great, we know what site we are going to acquire now, we just need that cashflow to get us going and what have you.
So, there is a slightly different risk profile there, which might be fine. If you are a big developer and you are thinking, right I am going to do this development, I am going to get my planning application in in a few months' time, it is going to take a few months to be determined, might have to go to... You know, you have got 12 months or so plus before you want your units. That might still be okay to be entering those BUPAs with those, but it is sort of a different issue, and so we spend a lot of time in common with all of them looking at it again; what are the actual units you are buying, what is the price, when are they going to be delivered, when do you need them and then dealing with allocation. But one of the key issues which we spend a lot of time on is termination and reputational issues, which the diligence feeds into. So, you might want to terminate because the units are not delivered, or there is an insolvency issue, or because the habitat bank you are contracting with has had a few problems elsewhere in the country and you are thinking oh crumbs is that the right business for me to be doing a deal with; and it is slightly, sort of contradictory to BNG in a way, because the whole point of off-site BNG is that you are buying a compliance product. So, Lexi is taking the problem away from you, I will do all the compliancy. If there is a problem, I get beaten up by the authorities, you are fine.
Helen: That is called a clean break in fact.
Ben: There you go. But a load of the developers I am speaking to are saying: "yes, we get that, but we still want to know it is good and we want to know that the habitat is going to succeed". So I think, as everyone is alluding to, it is understanding that reputable developers want to be associated with reputable habitat gains. They are spending hundreds of thousands of pounds very easily and they want to know that what they are getting is the 'real deal'. So, in terms of diligence, I want to know that the person I am buying for – really basic stuff – they have got legal title.
I have got a couple of projects at the minute where I am not entirely sure who owns the site, and have they got title to these units that they are going to be selling. So I want to know where is the land, I do not want to do a site visit, but I want to do a quick title check. I want to see if there is a 106 or a Conservation Covenant. Nine times out of ten there is not, and so I want to know: Is there a draft? Have you had early engagement with the local authority? What are they saying about it? What is the realistic timetable that you are going to get that signed – in case I need to go elsewhere, because you are going to be a break from my scheme? Is there a draft habitat management plan? Who has prepared it? Is it something that I have done on the back of a fag packet, and it's a case of plant a few geraniums and it will all be fine? Or is it something that a really super qualified ecologist has done and it has had some proper expert work on it and we know it is going to deliver?
Again, the point others have made, it's this financial security. So it is not a statutory requirement that a 106 or a 'ConCov' [Conservation Covenant] has this security for the next 30 years to deal with management, in the event something horrendous happens. But it's not quite negligent but it is a massive concern that if you are buying units and the 106 does not have that security, that is a real problem. So again, a lot of the big developers I am working with are wanting to know what the financial security arrangements are – just to back that up.
And Neil, Future Homes Hub did a checklist didn't they? Which is think is from their website...
Neil: Yes, that's right. It is based on the BBOP (Business and Biodiversity Offsets Programme) principles, and it is really just a process more than anything else in terms of – both from a volume builder and an SME developer/builder point of view; just the things to ask, the right questions, what you need to think about, have you thought about this, have you thought about the other, and just making sure that you are covering yourself in terms of that due diligence process internally, because we are not talking about insignificant amounts of money. Some of these offsite units are very, very expensive and, therefore, you need to make sure your process is right, you are asking the right questions and you are thinking ahead, in some respects as well, as to what the potential issue could be two or three years down the line, if not beyond. And that is available on the Future Homes Hub website now, if anyone is interested or it is linked to my LinkedIn feed if interested as well.
Alexa: Yes, I love that checklist. We have literally used it as a contents list for our 106 readiness packs, as we have decided to call them. It just beautifully takes you through all the things you need to show you have done, what you should be doing. So I think it has even been coming back to us via developer clients of ours; so yes, hats off to the Future Homes Hub for that, because I think it was a well-needed resource.
Helen: Thank you. Just developing that a little bit further – questions for George and for Neil: So what does a planning application look like today versus one you were submitting last year, for example?
George: We submitted one for a solar farm last week and it was very, very similar to what it was last year. We have just been that little bit more careful about what we are promising from a BNG point of view and how we allocate those units, and we are beginning to state – going back to what I was saying beforehand – the landscape will create this and we need that because we need the screening. But we are being just that little bit more careful on what we are promising in terms of actually delivering what we can, because until we know more and until we have got this monitoring in place and had a year to two years' worth of data as to how we are actually doing, we want to be a little bit kind of careful in terms of those promises we make. So, that has been the biggest change for us really.
Neil: Yes, I think I would echo that. I think it is incumbent on everyone submitting planning applications to help the local authority out. If there is a lot of negativity around the resource available to the LPA's, the speed at which they respond and all the rest of it, we understand that, but actually if we are submitting something into that system we want to make sure that what we submit is as good as it can be. And it gives the local authority confidence in what we are suggesting we can do – it helps them, it's clear, it's easy to understand. And a mantra within Bellway certainly has been 'do it right and do it once' and make sure that you submit that information in the form the LPA can read and understand, and then hopefully just progress without any cause for quibbling around BNG. That is a slightly simplistic way of looking at it, and I think, ultimately, we have got to do our bit to make sure that BNG does not grind to a halt because of planning.
Ben: Can I ask a question? Am I allowed without overstepping?
Helen: Yes, that is okay.
Ben: One of the things when BNG policy was first announced and we were looking at Government responses... obviously lawyers were very risk adverse and were like "oh a chance for judicial review" and all this kind of stuff, and we are saying you can avoid that by getting your biodiversity gain plan approved at the same time as planning, and what have you. Then the rules came out and said no, no you cannot submit your biodiversity gain plan; which is the document that they use isn't it, the authorities, to tick off your planning condition to allow you to go on site, because you cannot submit that in anger until after your planning. Are you putting draft biodiversity gain plans in, sort of indicative only but clearly this is exactly what we are going to do?
Neil: Yes, absolutely and it is all part of that process of making the job easier for the local authority and we are actually going to the extent of; "here is our draft BNG plan and here is a background in terms of what we have done about securing off-site units if we need them. So we are not giving them a full legal document, but we are giving them comfort that we have actually spoken to people like Lex at Environment Bank and have got solutions. We know we can deliver it and, therefore, it is not a problem.
George: I think for us, because ours is going to be more on-site, I do not think that the draft BNG plan is quite so important for us. I think we will work with the local planning authority, through that discharge of conditions procedure, to make sure we give them what they want as part of that. So I think it is probably a little bit less important for us and it also has got to mirror with our landscaping visual, the plans and our ecology reports as well, so it is all intertwined.
Helen: Thanks George. Lex mentioned at the start of the session that the planning advisory service has just launched that suite of template documents a few days ago. Ben, I imagine you have been over them, you have been reading them constantly since the launch. We would welcome your initial thoughts on what you have seen in those please.
Ben: Yes, so I think there is three or four: there is the onsite, there is offsite and there is one for habitat banks as well isn't there, plus a draft planning condition one, I want to say? I have gone through one quickly – I must admit I had a bit of a hairy week – but they are really good. The one I looked at is really comprehensive and sort of addresses a number of the issues that we are, I guess, coming across when dealing with local authorities on 106's and the financial securities, this that and the other, but I am going to defer to Lex who I know has read them cover-to-cover.
Alexa: I have obsessively read them and celebrate them massively. A huge thanks to the planning advisory service for all the work they have been doing in this process, which has been a challenging implementation period and an ambitious one. But, certainly, those templates are a fantastic starting point to – I think the word maturity was a good point, in terms of as this matures we will probably refine these documents and things will start to feel natural and normal and second nature – but what planning authorities have had to do, which has been really tough, is come out of the normal world of 106's where "this land is 106 land to build a school on", into "this land is 106 land for a 30-year nature project". And just how different that is in terms of risk, in terms of who the parties should be, in terms of funding mechanisms, in terms of monitoring enforcement and also, crucially, a thing that came up at our recent 106 Round Table that Gowling WLG kindly hosted – which is what sort of helped to springboard this template 106 – is also if you have oversized your habitat bank, or you have undersized it, what do you do about changing the size and shape of a 106 over 30 years? All of those things do not typically come up in a normal development context, because the development timeline is so much more constrained – it is a lot shorter period. So those template 106's were excellent on that front.
My only additional comment is that I would love to see more parity between how an on-site 106 is dealt with and how an off-site BNG is dealt with. There is definitely a big distinction between the two templates in the drafts that were produced and what we would like to be pushing for is a better balance between the two, because really you want on-site. On-site delivery is basically a habitat bank as I see it and it deserves that level of attention, monitoring and overall chances of success. So there is a bit of a distinction there, but otherwise 'hats off' to the planning advisory service. I think this is really going to help to reassure and give confidence to planning authority lawyers that they are not walking in the dark on this; they are doing something that is balanced and appropriate.
Ben: And it does put that marker down doesn't it about that financial security, which is really critical. And I think someone in the Q&A's asked about insurance and stuff, and that is something we have been looking at from a Conservation Covenant perspective; you know drafting templates and what have you, and how you get that financial security. Is it parent company guarantee? Is it Escrow? Is it percentage of unit sales? Is it a bond? Is it insurance? It feels like... you don't want to wish your life away, but fast forwarding six months until the market starts coming up with even more creative solutions – because we are all comfortable with highways bonds and things that last 18 months until a big thing of concrete is built and you can point to it and say look, rip up my bond, but this is much trickier – but hopefully by having that and putting the marker down in the template, it is going to be really hard I think for the local authority now to say "no you do not need to do it".
Helen: Thank you. I can't not ask a question about the fact that we have a new government. We had an election less than a week ago now. What impact, if any, did the pre-election period have – did any of you notice? And, secondly, what difference do you think the new Labour government will make to BNG, if indeed anything? Neil.
Neil: I think it's fair to say that purdah hasn't helped in the election period, and that it feels like its lost a little bit of momentum because it landed when it did. It did what it did, that's fine, we've got a new government now, we need to move forwards with it. Certainly, the noises coming out of Labour as part of their manifesto were generally quite positive, but fundamentally the planning system is what needs to change and what needs to be repaired and I think the sooner that process becomes more fit for purpose – perhaps, for want of a better phrase – then the sooner things like biodiversity net gain and all the other considerations, all the material considerations as part of that process will start to function in a much more efficient way. I think things like the grey land policies that have been mentioned are potentially very, very positive if they are implemented in the right way. I think the planning targets, in terms of number of plots to be developed, is also a positive, because that brings confidence with it. But the underlying issue really is the planning process and the planning system, and until that is fixed then nothing is really going to change moving forward. So fingers are very much crossed that Labour do manage to deliver what they hoped to deliver as part of their manifesto.
Alexa: Yeah, I'd echo all of that. I mean, I think we are at the crunch point in a challenging implementation period, like all new policies have. I think that something that turbocharges development in a nature positive way is a really good thing, and I feel like any ambitions to rapid growth I'm glad are being done in a way where there is a biodiversity net gain policy there to make sure that happens in a nature positive way. I think that to me is crucial, and that with BNG fully implemented with that gain site register absolutely chocka, full of absolutely compliance and fantastic habitat banks, what you will have is a frictionless way to deliver fast growth, fast development in a nature positive way, while all of these habitat banks across the country are already maturing, growing, established. So, we are really supportive of that and are keen to really make sure that BNG is that crucial green infrastructure that facilitates that rapid growth.
George: I think from our point of view, from Conrad's point of view, I think the new government has created a bit of differential between themselves around renewable energy and really wishes to sort of progress that. So it will be interesting to see actually how they make that happen. I agree entirely with Neil, you know we have our own issues around grids and those types of things, but the other big blocker for us is planning and the planning system. It shouldn't be taking a year or 18 months to grant planning permissions and we have got to do something about that too, otherwise we won't be supercharging anything, you know, with those sort of timeframes. I haven't fully listened to the speech yesterday and what the implications of that are, but the direction of traffic seems to be they are going to look at easing this planning system with targets; and we obviously support all of that. It looks like it's going to be a fairly bright, you know, period of time for the renewable energy industry, which is great for all of us. And it seems that the BNG and the ecology is going to be a cornerstone of that, so a really vibrant space to be in at the moment.
Ben: Yeah, BNG is new, so it's not sufficiently broken that it would need to be urgently fixed in the same way you know community infrastructure, levy seal, is sort of constantly in the past being something that needed to be looked at. So, I think it won't be interfered with too much and it needs to bed down before that happens and I think it's things like greenbelt housing targets, making affordable housing genuinely affordable that will focus politicians' minds. I think obviously, yeah, responsible body designation has slowed... you know, there haven't been any for a while; whether that is entirely down to that pre‑election sensitivity or not, I don't think that is really the whole picture, I think they were slow before. And going forwards, you know, would a Labour government say, well look we've had 10% mandatory BNG for a while now, a year or two, actually we can turn the dial up a bit now and make it 12 and a half or, maybe for some types of project, you know certain really long infrastructure projects, we could set a higher tariff. I know some local authorities are looking at that as well; you know 20/30% and what have you. So, it feels like that is where the future tweaks would most sensibly be.
Helen: Thank you. We've got loads of questions coming in, so we'll move to the questions in a moment, but can I just have your one item each that is at the top of your wish list for the next five months in respect of BNG. George?
George: For me, the biggest concern is to do with the landowners and how do we give landowners comfort that... so a battery installation or a solar installation is a temporary installation, it is a 40-year planning permission and the condition of that planning permission is that I must return that land to exactly the same state it was in when I walked through the front door. But yet, I am going to change that because I am going to do all of this biodiversity net gain and then what happens at the end of the 30 years when I've got an area that's been enhanced but yet I have got a set of rules and a lease that Helen you have helped us with that says we must return it back to what it was? And there's a conflict there, and I'm not sure how that's going to pan out.
Helen: Neil?
Neil: I think to pick up on one of the points that was made earlier, I would like to see the availability of off-site units going from virtual to reality. At the moment there's a lot of patchiness across the country, there's quite a time lag, and for developers looking to have that immediate solution, it's not there and that needs to change very quickly. So my hope and my intention is to support that as best we can, but we really need that market to start functioning in a much more robust manner than it is at the moment.
Alexa: Yeah, I feel exactly the same about it Neil. We really just can't wait to see it eased with things like the PAS [Planning Advisory Service] template 106; just local planning authorities be reassured towards agreement so that we can get that gain site register full and developers have got a reliable off-site solution that can just help to reassure and bring off-site into their decision making more easily.
Ben: Yeah, I'm going to go back to my wanting some really bold, not zero tolerance, approach to BNG failure but local authorities and responsible bodies sorting out nonsense early on to make sure that everyone, the whole BNG industry, thrives.
Helen: Thank you, so we'll work through a number of the questions. I'm going to take the first one because it's easy, which is: Are we going to circulate a recording of this session afterwards? Yes, we are. That will come around by email and it will be on the website. Yeah, answering a couple at the same time, we've had one question from Alex Ryan, thank you Alex. Could you please expand on the concerns around financial security regarding Section 106s and the purchase of BNG credits mentioned earlier? And then at the same time, we've also had a question on does the panel see an opportunity for insurance to help facilitate investment to provide the financial backstop to any biodiversity net gain failures? Who would like to start off on those ones please?
Alexa: I'm happy to take the insurance one because I have been pondering that. So, I was thinking that through and the big challenge that I see is that one of the biggest risks to a habitat bank is mismanagement, and also one of the biggest risks to a habitat bank is bad design. So I don't know quite how that is insured. It's not quite like crop loss insurance, because a flood has come in and meant that you haven't got your crop loss; you've got a kind of professional liability point when it comes to professional design, then you've got a management point, you can't really insure yourself for choosing not to spot treat an invasive species, if that makes sense. So I'm pondering on it, but I'm not sure yet that I've quite seen a policy that can address yet the biggest risks, which are accidental or deliberate mismanagement and poor design.
Ben: And shall I take the question on 106 and that that means. So the 106, or the legal agreement on the land that will say you've got to implement or lay out your new habitat and then you've got to look after it for 30 years, the point is that an off-site habitat bank might do all that work, sell the units in year one; and then, sort of, Lex might run off to Mauritius and spend lots of time on a beach and then someone's got to look after this habitat bank for 29 years and the funds have pretty much gone because they've come from unit sales. So having a mechanism in the 106 that said look, if you go bust, if you disappear, if there's a problem the local authority or the responsible body in the Conservation Covenant world can sort huff and puff and then say okay fine, we'll do it, or a freeholder might say fine we'll sort it out; and so they're not saddled with a 29-year maintenance problem, there's money in the pot for someone to come and do that. Now that's not a problem for the developer who has bought the units, because they've satisfied their obligation, they've ticked... you know the local authority has signed off their conditions, they've implemented, all that kind of stuff. It just goes to the reputation of people like Bellway and Conrad wanting to know that what they buy is a proper solution to the biodiversity crisis. There is no legal liability because they're buying a unit, it's just about wanting to do the right thing.
Neil: And there's reputational damage to that as well... I would just chuck in there as well from a developer's point of view – that we want to make sure we're dealing with the right people who've got the right product to sell us, but equally if they do fail to meet their obligations that will, inevitably, at some point come back on the developer as well. So, again, it goes back to the due diligence piece and making sure we're doing business with the right people who can actually deliver what we need them to deliver for 30 years.
Helen: Thank you. Just developing that, you know, the ability to deliver. We've had a question, a challenge: Is there realistically capacity within the existing and imminent habitat bank provision to meet the Government's one and half million homes ambition? Is there a danger that a capacity squeeze might be seen as a break?
Alexa: I don't think so. The amount of schemes, habitat banks, under development now... there is a lot, there's a lot of activity going on. You know, the actual development demand, you know, for that number of houses is not, I don't think, absolutely huge. There is a lot going on, a lot of really good quality schemes coming forward. I see capacity as not an issue. I see just getting over this hiccup of registration and implementation where you'll see that actually there's a really flourishing off-site market, and that's exactly what we're here to contribute towards.
Neil: I think there is a note of caution with the NSIP [Nationally Significant Infrastructure Requirement] requirement, which comes in in 2025, because by their very nature those projects are probably going to demand a lot more, proportionately, off-site units than perhaps a housing development would. So that's potentially the next critical challenge to the off-site market. When that becomes a reality, how does the market adapt and react to that kind of pressure and that kind of demand?
Helen: Thank you. A question has come in for George. Be great to hear a battery storage perspective. Can you share any learnings from within Conrad?
George: I think the key thing goes back to what we were saying earlier about preparation, and it goes right back to day one and site selection. And so, what we've found is that rather than finding enough room just for the batteries, we're now finding enough room for the batteries, plus the BNG, right from day one. So, there's a number of challenges in the battery market, whether its noise and fire risk and a couple of other issues, so you're tending to find battery sites becoming slightly larger in terms of their footprint, the spaces between the batteries, these types of things. So by increasing that land grab at day one you can then build in two or three acres for biodiversity net gain in the first place which tends to lead us to sort of locations that are probably slightly more greenbelt sites rather than brownfield sites or commercial industrial estate site where it is more difficult to get BNG scores but also more difficult to comply with fire regulations or noise regulations. So we finding those working hand in hand. Again preparation.
Helen: Thank you, George. Lex you used the phrase earlier the magic of a universal metric. We've had a question, any comments from the panel about oddities or unintended consequences of the metric. For example, woodland planting is often punished at the hands of the metric potentially creating less good overall outcomes and is Defra listening, will the metric evolve?
Aleza: Definitely, the metric's already evolved massively in this pre‑mandatory period and its essential to get it right and lots of things have been corrected, there's been some really arbitrary implications of spatial multipliers in the past, there's been all sorts of tweaks and adjustments and recalibrations that have been needed. I think in the context of what it achieves which is to bring us all into using one metric is extraordinary and there'll always be odd peculiarities. I know there's something about garden land, there's some odd thing about garden land that I've seen is causing issues. DEFRA and Natural England are definitely listening, they've just got to make sure they don't change it too rapidly because people do need time to let things bed in. So I do think they're listening and I do think those issues are kind of negligible next to the sheer scope of that what they've managed to achieve.
Neil: Absolutely, I think to defend DEFRA here, just for a second. They have given the option on all of their pages on their website to give feedback and I really would encourage anyone who does have a concern about the way the metric functions, to give them that feedback. I mean I follow various BNG pages on Facebook and things like that and there's individuals on there that moan about metrics all day and all night, but what I want to see is them being proactive and actually constructive about that and letting DEFRA know what they think; flagging where they think an issue may be, and also coming up with a solution as well, because it is an intricate process to a certain degree, it is very new, it's very bold and it's not going to be perfect. And Defra have been very upfront about the fact that it's not a perfect system, but a perfect system can only get better if people only feedback in a positive way. So I would very much encourage anyone who does have concerns to let DEFRA know and start that interaction with them.
Alexa: I love that you're up all day and all night reading Facebook BNG pages.
Neil: I'm just sad Lex.
Ben: But you're right, I can't think of another policy in any area where the sponsoring government department is being quite so accessible in turning up at conferences, to provide round tables having conversations and yeah, it's a phenomenal team at DEFRA who put this together and are being really receptive.
George: Just as an example we're about to, you know, we're developing a scheme which is a floating solar scheme. So they're putting solar panels on top of lakes. So, the very first question when the ecologist walked in the room was, "how do I get BNG on water as a question". So, six months ago we had no answer to that and now we have got an answer, we've done our pre‑app with the local planning authority and they're going to be quite happy with our approach to that. So, yeah, they'll always be quirks to any system that comes in. I agree, it sounds like everybody's been listening and working with the relevant parties to come to a sensible solution.
Helen: Right, but that sounds like a suitably positive note to end on actually. So we have got a few more questions still to go and where people have put their names on all specific queries then, you know, we'll come back on those as well where appropriate. Finally, it just goes to me to thank all of you for your time, appreciate you are all very busy BNGing, so thank you for joining us. It's been really interesting, really enjoyed it and look forward to seeing you all again soon.
Thank you very much too to everyone that's dialled in. We've had the best part of 200 people, which has been great to see. So we do hope you have found it an interesting and useful session as well. So thank you.
Neil: Thanks very much.
Alexa: Thank you.
Man: Bye bye.
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