Spending watchdog questions how local councils will discharge new Biodiversity Net Gain duties

The Department for Environment, Food and Rural Affairs (Defra) launched the Biodiversity Net Gain (BNG) scheme "before having all the elements" in place needed to ensure its long-term success, a report from the National Audit Office (NAO) has warned.

In its report, ''Implementing statutory biodiversity net gain'' published on Friday (17 May), the NAO raised questions about how well Defra can monitor the policy's performance and whether local authorities will be able to discharge their new BNG duties. 

BNG, which is mandatory under Schedule 7A of the Town and Country Planning Act 1990, as inserted by Schedule 14 of Defra's Environment Act 2021, requires that a development boosts biodiversity by at least 10% and has been required for large sites and small sites since April this year.

Under the legislation, local authorities have a legal duty to approve developers' plans where they meet the BNG requirement, oversee on-site and most off-site gains, monitor compliance, and take enforcement action as appropriate.

However, the NAO report revealed that some local authorities have expressed concerns that they are not ready to implement these duties, and that it would take time to catch up with those that were. 

The NAO report also raised questions about whether councils had the capacity to monitor and enforce BNG.

It said: "While Defra's calculation of the new burden to local authorities included an amount equivalent to a 0.2 FTE post, to acknowledge monitoring an enforcement requirements, local authorities have not received additional funding specifically to monitor or enforce on-site gains."

In addition, the report said that the discretionary nature of local authority planning enforcement means that there are compliance and enforcement risks for BNG.

The report also noted that Defra is still developing its post-launch governance arrangements, and the outcomes from its policy will ultimately rely on organisations outside central government "over which Defra has limited influence".

The NAO made a series of recommendations to facilitate local delivery, which said Defra should:

• ensure local authorities have sufficient and timely funding certainty to allow longer-term planning; 
• use monitoring information on the biodiversity units market to identify any differential regional impacts of the policy, such as local authorities less engaged with the policy, and target support to them; and 
• be proactive in co-ordinating opportunities for best practice to be shared and adopted quickly, particularly among local authorities.

It also recommended that Defra:

• establish arrangements to understand and respond to system-wide risks and opportunities; 
• ensure it retains sufficient capacity and capability to deal with any challenges requiring central government leadership or response; 
• monitor the extent to which the private market for biodiversity units is growing at the pace and scale it needs to in order to provide developers with the range of habitat types they require; 
• establish a mechanism for spending income from the sales of statutory biodiversity credits in a timely way that fulfils the government's role as biodiversity provider of last resort; 
• determine how it will monitor the effectiveness of compliance and enforcement by local authorities and responsible bodies, to give Defra adequate assurance that these organisations are complying with their statutory BNG obligations''
• publish information annually – for example, within Defra's annual progress reports on the Environmental Improvement Plan – on what statutory BNG has delivered so far towards the stated policy objectives, outcomes and benefits; and 
• identify the contribution that they expect statutory BNG to make to national biodiversity targets, and how they will measure the progress statutory BNG makes to these objectives.

Gareth Davies, head of NAO, said: "The statutory biodiversity net gain scheme is the first national scheme of its kind to build requirements for enhancing biodiversity into planning approval. However, it was launched with risks to the long-term effectiveness of the policy. 

"These include uncertainty about whether the fledgling market for biodiversity units scales up to satisfy developers' demand, risks to enforcement and gaps in its information.

"Defra must address these issues, including by plugging gaps in its information so that it can effectively evaluate the scheme'sscheme's success."

Cllr Darren Rodwell, environment spokesperson for the Local Government Association, said: "Biodiversity net gain has fantastic potential for local communities and the environment.

"It is important that councils are properly funded and that the government quickly put in place measures to ensure the land is available for BNG off-site, for instance by allowing BNG on council-owned land in the short-term.

"We want to work with government to ensure that councils have the right tools and resources to implement biodiversity net gain as effectively as possible."

The report comes a month on from a report by BDB Pitmans partner Angus Walker that just five local authorities in England have landowner section 106 agreement (s106) templates for biodiversity net gain (BNG) sites.

Adam Carey