With the planning industry focused on the white paper and with the disruption caused by the pandemic, most developers would be forgiven for losing track of the Environment Bill. However, the Bill is once again on the move through parliament. It seeks to provide a statutory footing for the protection and enhancement of the environment as well as establishing a new governance body to act as watchdog after the UK leaves the EU.
The environmental agenda is already having a significant impact on decision making for development, as we have seen in the case of the third runway at Heathrow. The changes proposed by the Environment Bill are set to enshrine in law principles that decision makers have already been leaning towards: improving the quality and increasing the value of the natural environment.
Some of the key changes proposed by the bill are:
Biodiversity net gain: all new development under the Town and Country Planning Act 1990 (save for some exceptions) will be subject to a planning condition requiring a 10% increase in biodiversity value of onsite habitat, which must be maintained for at least 30 years following completion of the development. Developers must also submit with their planning application, and have approved by the local planning authority, a biodiversity net gain plan.
Mitigation hierarchy: to achieve biodiversity net gain there will be a hierarchy of mitigation measures that developers must comply with; namely onsite mitigation, off-site mitigation and mitigation secured through the purchase of biodiversity credits.
Conservation covenants: a landowner and a designated “responsible body” can enter into agreements to conserve a habitat’s natural or heritage features. Crucially these would bind the land and any positive or restrictive obligations would impact on how subsequent landowners can use it.
Office for Environmental Protection: filling the role previously taken by the Commission prior to the UK’s departure from the EU, the bill will establish a new independent body with powers to scrutinise environmental law and policy, investigate complaints and take enforcement action against public authorities. Those public authorities are likely to include the Planning Inspectorate and local authorities and may provide additional ways of challenging the determination of development consent order (DCO) applications, local plan making and planning applications if a public authority is considered to have failed to comply with environmental law.
Local nature recovery strategies and national strategy: local authorities will have extra duties to create local nature recovery strategies (LNRSs) to map opportunities to recover or enhance biodiversity in the strategy area. A national nature recovery network is proposed, accompanied by a national habitat map to assist in the preparation of LNRSs and to inform authorities of areas of greater biodiversity importance.
Should the Environment Bill receive royal assent, its provisions are likely to have significant implications on how developers manage future development projects. While this will likely result in greater scrutiny of the viability of certain schemes, the bill also presents opportunities for re-evaluation and innovation, which may provide previously unconsidered benefits.
Opportunities for developers
1. Riding the green wave
The pandemic has highlighted the different experiences of people living through lockdown in areas with poor green space provision compared to those with good access to such spaces. It has also led to increased public awareness of the importance of interactions with nature and of the availability of access to biodiverse landscapes.
The Office for National Statistics has reported that urban green spaces raise nearby house prices by an average of £2,500 while views of green spaces boosted house prices by an additional 1.8%. RICS has also reported that 74% of respondents reported a shift in demand towards residential properties with good access to green spaces.
While the land provided for biodiversity enhancement or ecological mitigation will not be available in most cases for use as public open space and recreation, building in biodiversity and tapping into the demand for access to green spaces and the ability to interact with nature can add value to new developments.
2. Competitive advantages and reputational premiums
The demand for access to good quality green space will inevitably be reflected in tenders for new projects, particularly as local authorities double down on their focus on habitat management following the publication of their LNRS. Commissioning agencies already often require projects to improve the environment, or deliver specific biodiversity commitments, and developers who can demonstrate evidence of expertise in delivering biodiverse developments will have a competitive advantage. This could also open up avenues to new sources of funding as many lenders now look for opportunities to lend on sustainable developments.
In addition, showcasing good practice through an early commitment to delivering biodiverse development can enhance brand value and engaging with the zeitgeist, by improving existing and new communities through the delivery of green infrastructure, will enhance reputations.
3. Signalling where to invest and divest: opportunities for landowners
The bill could mean that existing sites may no longer be viable for development in the way originally anticipated, but there may be opportunities to generate a new income stream if the site is suitable for the provision of offsite mitigation to offset the impact of nearby development sites. If the mitigation site unlocks development on the development site then it could attract a value that provides the owner with an acceptable return; could we see a new market in “mitigation sites”?
The LNRS will help developers to assess whether a site is likely to be suitable for development or biodiversity mitigation. Areas surrounded by land with good habitat potential may require greater measures to demonstrate a 10% biodiversity improvement, while areas where onsite mitigation is more challenging present opportunities for those with suitable “mitigation sites”.
4. Reducing delays in the grant of consent and improving risk management
The proposals in the bill aim to ensure greater transparency in the way that environmental outcomes are taken into consideration in the decision whether or not to grant planning permission. The requirement to submit a biodiversity net gain plan ensures that developers provide evidence clearly demonstrating that legal and planning conditions relating to biodiversity have been met or exceeded. This should in turn avoid delays to obtaining consent by demonstrating how a development will contribute to local biodiversity priorities and minimise controversy at stakeholder level, particularly in rural areas sensitive to alterations in existing habitat and green space.
However, quantifying whether a 10% net gain requirement has been met is still somewhat subjective. The biodiversity net gain metric attempts to provide a consistent means by which to measure biodiversity losses and gains that result from development projects. Factoring in onsite or offsite biodiversity requirements at the outset of a project can minimise the risk of delay and additional costs that could result from having to retrofit developments to meet the 10% target.
5. Nationally significant infrastructure projects: getting ahead of the curve
Emerging government policy sets out a desire to improve national environmental standards and, while the current provisions in the Environment Bill do not apply to the NSIP regime, it is anticipated that a broader concept of environmental net gain encompassing national infrastructure projects may be on the cards. Promoters of development consent orders who embrace biodiversity net gain principles now will get ahead of the curve and can anticipate a smoother examination process. Some infrastructure developers are already factoring in biodiversity net gain targets voluntarily.
Final thoughts
Those who factor the biodiversity net gain requirements into business as usual and consider the implications of the Environment Bill for upcoming developments will be best placed to get their planning permissions granted quickly and realise the opportunities of the new green development agenda.
Charlotte Jones is an associate at Addleshaw Goddard
