Biodiversity Gain Site Register (Financial Penalties and Fees) Regulations 2024

Baroness Bennett of Manor Castle Excerpts

Wednesday 10th January 2024 Lords Chamber

[The Minister of State, Department for Environment, Food and Rural Affairs, and Foreign, Commonwealth and Development Office (Lord Benyon) (Con)]

My Lords, I refer to my entry in the register. The draft instruments—the Biodiversity Gain Site Register (Financial Penalties and Fees) Regulations 2024 and the Biodiversity Gain (Town and Country Planning) (Consequential Amendments) Regulations 2024—were both laid before the House on 30 November. The instruments have been grouped as they are part of a package of regulations which work together to introduce the new framework for mandatory biodiversity net gain. Although biodiversity net gain is a key policy delivered by the Environment Act, some of the policy involves amendments to the planning system. I will speak to both instruments together, given their interlinks, but I will not profess to be an expert om the intricacies of the planning system and commit to writing to noble Lords on points of particular detail.

The instruments laid before the House today form part of a package of SIs that will commence the new, world-leading biodiversity net gain requirement. This is a new approach to development and land management that was legislated for in the Environment Act 2021 and had strong support across both Houses. It aims to leave the natural environment in a measurably better state than it was beforehand through requiring a 10% net gain for biodiversity on each eligible grant of planning permission. These gains must be delivered, first, through on-site habitat enhancement or creation where possible, then through off-site enhancements or through purchasing units from the market and, finally, as a last resort, through purchasing statutory credits sold by the Government.

A public consultation on the policy and implementation of biodiversity net gain was held in 2022. The government response, published at the beginning of 2023, confirmed the policy intention for mandatory biodiversity net gain and has informed the drafting of these regulations.

I turn first to the Biodiversity Gain Site Register (Financial Penalties and Fees) Regulations 2024. The Environment Act 2021 gives the Secretary of State for the Environment, Food and Rural Affairs the power to make provision for a register of biodiversity gain sites. The core purpose of this publicly available register is to record allocations of off-site biodiversity gains to developments. The register will be established by the Biodiversity Gain Site Register Regulations 2024.

This instrument makes provision for the imposition of a financial penalty and the payment of fees relating to applications to that register. This instrument provides for imposing financial penalties to help ensure that the biodiversity gain site register contains accurate information. The provision for financial penalties will encourage compliance, deter individuals from submitting incorrect information and remove illicit financial benefit—for example, through cost avoidance.

This instrument also provides for fees to be charged for different applications to the register. These applications include gain site registration, amendment applications and applications for the allocation of habitat enhancements to development. The fees have been set to achieve cost recovery for the set-up and ongoing maintenance of the register. Developers are not obliged to use the biodiversity net gain register and should first aim to achieve biodiversity gains on site before turning to off-site gains. Landowners who choose to supply off-site gains to developers must apply to register their land. We expect that they will do so only if the benefits from selling units outweigh the costs. Without these regulations setting the requirement for fees to be paid and the amount to be paid, the register would not achieve cost recovery and there would be a significant cost to the Government.

I now turn to the Biodiversity Gain (Town and Country Planning) (Consequential Amendments) Regulations 2024, which have been ably drafted by the Department for Levelling Up, Housing and Communities. The Environment Act 2021 amended the Town and Country Planning Act 1990 to make provision for biodiversity net gain in the planning system. The Act specifically adds a new Schedule 7A, which sets out the statutory basis for the 10% biodiversity gain objective, the metric and the general biodiversity gain condition which will apply to those planning permissions. It also made consequential changes to other parts of the Town and Country Planning Act.

These regulations will make further consequential changes. First, they provide rules within Schedule 7A for determining the local planning authority which is responsible for the approval of a biodiversity gain plan required under the general biodiversity gain condition. Secondly, they further amend Section 73 of the Town and Country Planning Act, which enables the variation of conditions of previous planning permission to cover the circumstances when an earlier biodiversity gain plan is to be regarded as approved where the development’s on-site habitat is irreplaceable habitat. Finally, they make amendments to Section 78 of the Town and Country Planning Act for the purpose of appeals about determinations by planning authorities in respect of the biodiversity gain plan. These are technical amendments to ensure the provisions for biodiversity net gain in the Town and Country Planning Act work.

In conclusion, let me emphasise that the regulations are essential to the successful delivery of the new mandatory net gain requirement, which will help to deliver much-needed gains for nature. Once the regulations are approved by both Houses, we will lay the rest of the biodiversity net gain regulations, which we have published in draft. I commend these draft instruments to the House.

[Baroness Bennett of Manor Castle (GP)]

My Lords, I was expecting more people than this. I thank the Minister for his introduction, and I think it is very clear that what we are looking at here are two instruments from a very major set that will finally implement the idea of biodiversity net gain, which your Lordships’ House and the other place have been debating for what now feels like many years.

Before looking at the detail of these two statutory instruments, I think that it is worth thinking about what we are talking about here. We are trying to deliver a system, however much some of us—I include the Green Party in this—have doubts about it, that means that we do not keep going backwards. As we stand in the House tonight, we are about to see the destruction of a veteran oak tree in Melton Fields in East Riding for the construction of an Amazon warehouse. I have been on the site and seen this happening. The biodiversity net gain that is being offered is “We will have some wetlands over there”—I am not quite sure where the sign that says “Birds, go that way” will be—but there is huge concern and there is still so much that we are losing. I think it is crucial that we see that.

I have a couple of questions about the instruments that I would like to put to the Minister. He talked about ensuring full cost recovery in the fees being charged. What will be the situation for projects for the public good, such as a new hospital for the NHS, a community centre or group? What provision is there to make sure that the people who can afford to pay are paying and that those community projects are not stopped but able to go ahead?

The other point which I think reporting in recent days has raised—this fits in with the levelling-up Bill that your Lordships’ House spent an inordinate of time on last year—is that we are seeing controls being put on for more than 10% biodiversity net gain, and that is overwhelmingly concentrated in the south of England, where there are local area partnerships. In terms of these instruments, but also more broadly, will there be allowance for the regional differences, the regional cost differences and, perhaps even more importantly, the regional ability to pay, in the provision in these statutory instruments?

[Lord Deben (Con)]

My Lords, this is a thoroughly good change and we should be entirely pleased that we are taking this step because it is a step that we have not taken before. I sometimes argue with the noble Baroness, Lady Bennett, but saying thank you is important if we are to get Governments to do more, so I start by saying thank you.

I recently attended a very interesting conference in Essex in which an expert explained exactly how this system worked. I am now much better informed, but it took some time to explain it in a way that, to put it simply, ordinary people understand. I hope the Minister agrees that we need to explain this much more effectively than we have until now if we are to get people to join in the “thank you” I started with.

I know that the Minister has rightly suggested that he is not an expert on planning, but he will understand when I say that I am disappointed that this Government have still not introduced the necessary overarching element in the planning laws that says that no planning permission should be given unless it fully takes into account the national statutory requirement for net zero in 2050 and the two important promises that we made at COP 26 on the targets for 2030 and 2035. Until the planning system as a whole insists that decisions are made within that context, the planning system will not be working properly for us to be able to deliver what we now, by law, have to deliver.

He may want to write to me on this subject, and it may be a long letter, but if it does not say, “Yes, we are going to do it”, it will not be acceptable because we have to do that as a central issue. It is barmy to have a planning system in which we fiddle about with little bits of what my noble friend said were technicalities when we cannot make the fundamental decision that the planning system itself should be beholden to the Government’s and the nation’s commitment to net zero.

Lastly, I hope that the Minister will be very careful about how this thing works. There are real issues about how it will work on the ground. Can he help us by telling us what measures the department has for monitoring how it works and for reporting back, so that we know how that monitoring has worked out? This is a new thing and something we should very much cheer on, but like most new things I would like to know how it is working and how we can improve it in future.

--- Later in debate ---

[Lord Benyon (Con)]

My Lords, I am very grateful for the contributions to this debate. The regulations debated here today will support the new mandatory net gain requirement, which will help secure positive outcomes for biodiversity, create better places for local communities and support a more consistent, streamlined and transparent planning process. This is very much only part of how we seek to deliver our 2030 targets, which my noble friend Lord Deben mentioned, of no net loss of species, and an increase by 2045. It is really important to make that clear.

We estimate that we are talking about around 6,900 hectares a year, but hundreds of thousands of hectares of other nature improvements are being incentivised by wider biodiversity credit schemes, carbon credit schemes and nature conservation measures that are being led through our environmental land management and other agri-environment schemes. Communities across England will benefit from new developments that work for both wildlife and people and create nature-rich places to live, while ensuring that they have the new homes that they need.

To take the point made clearly by the noble Baroness, Lady Bennett, there will continue to be a need for development under any party of government, which means that there will continue to be a risk of the loss of biodiversity. We need a system that works and is clear.

I take my noble friend’s point: I suspect that they were talking about the Natural England metric when he was at that conference. I would be the first to admit that that is a very complicated piece of work: it runs to a great many pages, and I have tried to run a competition in my head, if not in the department, about how many people understand it. The point is that, as we develop this and as those metrics are understood by more people—the people advising the businesses that seek to purchase the credits and the land managers who seek to make the land available—we will see a robust scheme that is accountable.

I will try to address the key points raised. The noble Baroness, Lady Bennett, quite rightly raised the issue of whether 10% goes far enough—why 10%? We consulted on the percentage gain to be required in the 2018 public consultation. Respondents set out varying views on the appropriate percentage gain, and there were calls for both higher and lower percentages—obviously, there will be people out there who did not want any and people who wanted a great deal more. We maintain the view that 10% strikes the right balance between the Government’s ambition for development and the certainty of achieving environmental outcomes to support the pressing need to reverse environmental decline while being affordable and deliverable for developers.

Developers and local authorities may wish to voluntarily pursue gains higher than 10%—a very good point made by the noble Baroness, Lady Thornhill. Where higher net gain percentages may be set in local planning policy, careful consideration in those events should be given to the feasibility of requirements above 10%, for example for smaller, self-build and community developments —I think that is really important. To be clear, biodiversity net gain means a strengthening, not a weakening, of the protections for the environment. The existing strong statutory and policy protections for our statutory protected sites, protected species and irreplaceable habitats will remain in place.

My noble friend talked about on-site enhancements and how they will be enforced. Local authorities will have a range of existing planning enforcement tools at their disposal, and the Environment Act includes mechanisms to ensure that commitments through conservation covenants are adhered to. The enforcing body which has entered an agreement to secure the site will play a key role in ensuring enforcement. This may be a local authority or could be a responsible body for a conservation covenant. Significant on-site biodiversity gains must be secured by a planning condition, planning obligation or conservation covenant, all of which bind the land, meaning that they apply to successor landowners as well. Off-site biodiversity gains must be secured, including management, by either a planning obligation or conservation covenant. Failure to deliver, or attempt to deliver, biodiversity net gain outcomes which are secured with conditions or obligations, subject to which planning permission is granted, can result in enforcement action by the planning authority.

The fines, along with the registration fees, will have to be reviewed as time goes by. Of course, we will see how it works. So much of this can and will need to be amended as we work it through. On the point about fines, if the kinds of greenwashers that the noble Baroness was referring to have not built the wetland or planted the trees or the wildflower meadow or whatever it is, the 30-year clock will not start until they have—so it is not only a fine but a delayed benefit to them.

The noble Baroness talked about projects for public good, which was a very good point. On the question of a hospital, the fees will be paid by the landowner, so it will not come out of the cost to the public purse, if you like. There will, of course, be a degree of management of those fees: some of them may find their way into front-ending the costs. There is a key point about nationally significant infrastructure projects: we are delaying the implementation of biodiversity net gain until next year for NSIPs because it is a more complicated matter. These are obviously much larger schemes and we want to make sure that there is biodiversity net gain—but we want to do it in the right way, so we will consult on that.

My noble friend talked about net zero. Our commitment on net zero, as he knows better than anyone, and for no net loss by 2030, are just some of those that are locked in law—we have to do it—so the Government have taken a range of measures, not least this extraordinarily exciting piece of legislation, the Environment Act, to deliver that. It is important that we see it working and we will continue to make sure that we look at all suggestions that can improve the planning system to deliver this.

The noble Baroness, Lady Thornhill, talked about monitoring. Integrating the biodiversity net gain requirement into existing planning processes is obviously what we are talking about. The Government are allowing the outcomes to benefit from existing enforcement and monitoring powers in the planning system. Planning application data is routinely published online and will describe how a development is achieving biodiversity net gain. Off-site habitat enhancement will be registered and will need to be secured, including any appropriate monitoring arrangements, through a conservation covenant or planning obligation. Planning authorities are required under the Natural Environment and Rural Communities Act 2006 to report on the actions they have carried out to meet their biodiversity net gain obligations and the details of biodiversity gains delivered or expected to be delivered.

There are some real-life examples, and here I will big-up Buckinghamshire Council, which this week has put information on its website setting out how landowners and developers should engage with it to seek to enter into Section 106 agreements to secure their land, including the estimates of associated costs. These will be negotiated through the Section 106 agreement process, but should cover the costs of the ongoing monitoring that the local planning authority—in this case Buckinghamshire —will carry out. One such estate, the Iford Estate, has already entered into Section 106 agreements to secure portions of land. In the example of Iford, it has entered into a Section 106 agreement with the local authority—the South Downs National Park Authority. Private sector marketplaces are emerging which list BNG units for sale, operating to join up landowners with developers looking to find off-site units. Examples include Addland, the Environmental Trading Platform and Savills Environmental Exchange. I think the Environment Bank is one of the leaders in this field.

[Baroness Bennett of Manor Castle (GP)]

It is interesting that the Minister chose the example of Buckinghamshire. I was referring to the apparent difference that is developing between north and south—that, broadly speaking, higher standards appear to be being set in the south. Are the Government planning to monitor the regional impacts of this, and is the north going to get the biodiversity net gain that it urgently needs? Will the Government act if it is not?

[Lord Benyon (Con)]

The legal requirement is across the country; there is no geographical lessening of the need for it. We will certainly be monitoring which local authorities we think do this properly and which do not, and that will be a matter of public record.

I should just comment on the key question of irreplaceable habitats. These are obviously England’s most valuable habitats. They have a high range of biodiversity value and are so difficult to recreate—ancient semi-natural woodland, peat bogs and that sort of thing. On 29 November, we published the draft irreplaceable habitat regulations, which set out the list of habitats to be considered irreplaceable habitat for biodiversity net gain purposes. The local planning authority must be satisfied that the adverse effect of the development on the biodiversity of the on-site habitat is minimised and that there is an appropriate compensation plan in place. The regulations also set out that losses of irreplaceable habitats cannot be compensated for using statutory biodiversity credits. It is important to note that irreplaceable habitats already have significant protection in the National Planning Policy Framework. Impacts on these habitats from development require the strongest of justifications.

I will address another point made by the noble Baroness, Lady Bennett. Off-site gains, which could be biodiversity gains, on other landholdings, or purchasing biodiversity units from the market, are part of the new hierarchy that sets out the draft regulations on biodiversity procedures. This ensures that, where impacts on habitats cannot be avoided or mitigated, compensation should be delivered either through off-site gains, as I say, or through enhancing and creating habitats on site, and, as a last resort, through purchasing statutory credits from the Government.

The right reverend Prelate the Bishop of Norwich speaks with great knowledge—I heard his outstanding maiden speech in this House. He is an ecologist, and I would say that his erstwhile career is now a growth industry, which answers some of the points he made. I do not know the exact number of local authorities that employ their own ecologists; I am very happy to seek that out and to write to noble Lords. It is a growth industry, because developers and local authorities are going to need them. There are a great many local authorities that use a contractual arrangement, and so do not employ them directly, but many still do.