Biodiversity net gain: the new mandatory system

In March 2019 the Government announced that, through the new Environment Bill, biodiversity net gain (BNG) would be made mandatory for all new developments in England. Caroline Hand explains how the system will work.

New homes are springing up all over England. A 2011 report by the Cambridge Centre for Housing and Planning Research indicated that we need to build an extra 240,000–250,000 houses each year (in the period 2011–2031) in order to provide for the growing number of households. Many of these new houses are being constructed on greenfield sites, creating concerns over the loss of natural habitats and biodiversity. At the same time that the housing report was published, Professor John Lawton launched his White Paper Making Space for Nature with the warning that “There is compelling evidence that England’s collection of wildlife sites are generally too small and too isolated, leading to declines in many of England’s characteristic species.” His headline recommendation was to create “more, bigger, better and more-joined up habitats”.

As part of the 25 Year Environment Plan, the current Government promised to “Embed [in the planning regime] an “environmental net gain” principle for development, including housing and infrastructure”. Environmental net gain is very broad in scope, taking in carbon emissions, air, soil, water quality etc. Biodiversity net gain (BNG) is that element which concerns natural flora and fauna, and particularly the quality of habitats for wildlife. Defra defines BNG as “an approach to development that aims to leave the natural environment in a measurably better state than beforehand. This means protecting existing habitats and ensuring that lost or degraded environmental features are compensated for by restoring or creating environmental features that are of greater value to wildlife and people.” Eventually, the Government would like to see BNG broaden out into Environmental Net Gain, but there is still much work to be done on the practicalities of achieving this ideal.

In March 2019 the Government announced that, through the new Environment Bill, BNG would be made mandatory for all new developments in England (other than very minor changes such as extensions to houses, and national infrastructure projects which are dealt with separately). The aim is to enhance biodiversity while at the same time improving conditions for developers by

  • creating consistency across local authority regions,

  • giving greater certainty, by quantifying from the outset the costs that developers will incur in protecting and enhancing habitats, and

  • speeding up the development process.

Detailed proposals for the new mandatory system are set out in a consultation paper Net gain: consultation proposals, published in December 2018. At the time of writing this article, the Government had not yet published its responses to the consultation.


See additional note at end of article.

How the biodiversity net gain system will work

Local authorities will be responsible for carrying out ecological surveys of their areas, giving priority to land earmarked for development. The habitat data that they collect will be entered onto the new Defra metric, which, with the aid of a calculation tool, assigns each habitat a numerical value (expressed in “biodiversity units”). Habitats are valued on the basis of their:

  • distinctiveness: whether the habitat is of high, medium or low value to wildlife

  • condition: whether the habitat is a good example of its type

  • extent: the area, in hectares or kilometres (depending on habitat types), that the habitat occupies.

An ecologist will then use the metric to estimate the biodiversity score after the proposed development has been completed. To demonstrate BNG, the development must raise the score by at least 10%. The use of a nationwide metric is one of the strong points of the new scheme: as all local authorities will have to use it, there will be a level playing field for developers across England. At present, some authorities already use a numerical system like this, while others rely on more subjective assessments by ecologists.

At this early stage, the developer can consult with the planning authority on measures to improve the score — for example, by planting trees, providing bat boxes or creating ponds. They will be able to factor in the cost of these habitat improvements to the price they offer for the land.

Mitigation hierarchy

Developers are expected to follow the mitigation hierarchy for biodiversity.

  1. Avoidance: if possible, avoid harm to existing wildlife and habitats (eg by planning roads to go around, not through, valuable habitats).

  2. Minimisation: if some disruption to wildlife is unavoidable, keep it to a minimum it eg by building wildlife crossings under roads.

  3. Rehabilitation/restoration: after building work is complete, restore the habitats that have been disturbed, or at least restore basic ecosystem services (eg by planting trees to stabilise the soil).

  4. Offset: if the original habitat is lost, pay for the creation or enhancement of a comparable habitat elsewhere.

On-site measures to enhance biodiversity are the ideal, with habitat improvements nearby as “second choice”, but if all else fails, the new system allows developers to pay a tariff for offsetting. The consultation paper suggests a value for the tariff of £9000–£15,000 per biodiversity unit. The availability of this failsafe mechanism should speed up planning applications by preventing lengthy delays while biodiversity is discussed. In order for the tariff system to be effective, there will need to be a “bank” of land suitable for habitat creation. Payments from several small developments could be combined to create a worthwhile habitat in another area.

The new BNG regime will not apply to existing conservation sites such as nature reserves and SSSIs (Sites of Special Scientific Interest). Developers will not be allowed to build on (for example) an SSSI then compensate by creating a pond or paying the tariff. Similarly, there will be no relaxation of the legislation which safeguards protected species such as bats and newts. The BNG regime will operate on top of these regimes, with the aim of preventing the downgrade of more “ordinary” habitats. In carrying out the assessment for BNG, the ecologists will look at the general suitability of the land for wildlife rather than focussing on the presence of individual species.

BNG in practice

BNG is not a new concept; a nationwide BNG regime was first mooted in 2012 and six pilot schemes were set up. The original idea was to establish a voluntary scheme, but it has since been realised that this could allow less scrupulous developers to undercut businesses with higher environmental standards.

Warwickshire was one of the pilot areas: it has continued with its mandatory scheme, using a locally-developed version of the Defra metric called the Warwickshire Biodiversity Impact Assessment (BIA) tool. The BIA is completed by the developer’s ecologist and details the value of the habitat before and after development. It is then reviewed by the local authority’s ecologist who may recommend further actions to improve the score — or alternatively, turn down the application if it conflicts core policies such as the mitigation hierarchy. The Warwickshire system allows offsetting, with funds paid either to the County Council or directly to a habitat creation project. The BIA also identifies land with particularly high habitat value which should not be developed.

Some construction and infrastructure businesses have also embraced the concept of BNG. The Berkeley Group made a commitment in 2016 that all new developments from May 2017 will create BNG within the site. For example, at their Kidbrooke Village development in south east London, Berkeley partnered with the London Wildlife Trust and consulted the Royal Borough of Greenwich’s Biodiversity Action Plan to provide a green parkland area with lakes, swales and plantings. They planted an avenue of Black Poplar, Britain’s rarest native timber tree, which attracts over 100 species of insects including moths, butterflies and bees.


In July 2019 the final version of the guidance was issued as part of a wider-ranging document on planning guidance for the natural environment.

The main change is that there will no longer be the option of a tariff which developers can pay if the proposed development will degrade the value of a habitat. The Government has rejected a national tariff as being too rigid and bureaucratic. Instead, local authorities, landowners and others can set up their own habitat compensation schemes. This is already happening: for example, a developer in South Devon was able to help finance a reserve for the cirl bunting when it became apparent that a housing development in Teignmouth would result in a loss of biodiversity (see Q&A Biodiversity net gain). If there is no local scheme available, there will be a last-resort option for developers to pay into “nationally strategic habitats” by purchasing “biodiversity units” from the Government. The Government will apply its principles for setting a tariff rate, which were set out in the net gain consultation, in setting the standard cost of statutory biodiversity units.

In other respects, the final guidance contains the same elements as the consultation document. The summary of consultation responses, and the Government’s response to them, can be found here.

Among the proposals which have been confirmed are:

  • the requirement that developments should achieve at least a 10% BNG

  • long term protection for mitigation sites — these must be maintained for at least 30 years

  • the net gains can be achieved either on-site or offsite; the Government will establish a public register of compensatory habitat sites

  • the Defra biodiversity metric is available to calculate BNG; Defra’s biodiversity metric enables calculation of losses and gains by assessing habitat distinctiveness, condition and extent, translating this into a score which is presented in biodiversity units

  • features to achieve BNG can be relatively small, eg bat boxes, swift bricks and hedgehog highways.

The final guidance does not introduce significant new exemptions from the BNG requirement, though the Government does plan to introduce an exemption for certain brownfield sites that do not contain priority habitats and face genuine difficulties in delivering viable development.

The new system of BNG will be introduced through the Environment Bill: there will then be a transition period of two years after the Bill receives Royal Assent.