Question to the Department for Environment, Food and Rural Affairs:

To ask the Secretary of State for Environment, Food and Rural Affairs, what recent assessment her Department has made of the pilot habitat bank sites.

We are introducing mandatory biodiversity net gain for most new development from November 2023. The policy aims to leave biodiversity in a measurably better state than before the development has commenced. Developers can meet their net gain requirements on-site, off-site or as a last resort by purchasing statutory credits from the Government.

The statutory credit scheme is not seeking to create habitat banks. Habitat banks are where providers in the private sector create or enhance habitat in advance of selling the units to developers. Habitat created or enhanced after 30 January 2020 will be eligible, provided it meets the other requirements for biodiversity net gain units. We want to encourage habitat banking to allow habitat enhancements to be delivered before development takes place.

Revenue from statutory credit sales will be invested by Natural England on behalf of Defra’s Secretary of State in strategic habitat creation and enhancement projects which deliver long-term environmental benefits.

Natural England ran a three-year pilot for credit scheme investment. This ended in March 2023 with five projects being funded through investment readiness. A formal assessment has not been made but initial learnings are being used to design the credit scheme and inform similar schemes within Natural England and Defra.