Get clear on how Biodiversity Net-Gain mandate will be enforced, UK Government told

The mandate now applies to housing developments of all sizes in England

The mandate requires housing developers to deliver at least a 10% net increase in biodiversity at their sites, compared to levels before development. Where improvements on site are not possible, some developers will be allowed to deliver off site projects or purchase biodiversity credits, within a strict set of guidelines.

The National Audit Office, which acts as the UK Government’s spending watchdog, has warned that more clarity on how developers will be held to account and how credits will be verified and sold is necessary to ensure the long-term effectiveness of BNG.

BNG came into force for large developments in February and smaller developments in April. The scheme will be expanded again in November 2025 to cover other types of buildings and infrastructure.

The National Audit Office has tracked “mixed readiness among local authorities” for adopting BNG. It believes there are risks that not all councils will be able to assess whether developers are complying, and deliver appropriate enforcement when they are not.

This is partly due to a lack of funding from the central government for monitoring and enforcement. The UK Government’s Department for the Environment, Food and Rural Affairs (Defra) did provide local authorities with funds in the two years leading up to the launch but the National Audit Office heard concerns that many councils are now unsure of how to fund BNG-related activities.

It bears noting that each local authority received a maximum of £43,467 to prepare.

Councils need “sufficient and timely funding certainty”, the National Audit Office said.

Offsetting dilemma

Another key issue raised by he National Audit Office is the mechanism for offsetting using biodiversity credits.

This is a persistent and widespread concern. The Wildlife and Countryside Link has been advocating for clarity from Defra to avoid the BNG mandate from “amounting to a glorified offsetting scheme”.

Defra will generate some of its own biodiversity credits but these will be limited, and it intends for private sector players to generate most of the credits that will be available on the market. The Department will verify its own credits and those generated by others.

The National Audit Office is calling on Defra to forecast how rapidly the supply of compliant credits can be scaled to satisfy demand.

The Department will also need to set up a legally sound mechanism to ensure that moneys raised from selling its own credits will be spent on other activities that benefit nature, the National Audit Office is recommending.

However, it has stopped short of recommending that developers who deliver more than 10% net-gain can generate credits and sell them to others in the sector. This is a hotly-contested aspect of the BNG setup at present.

edie has reached out to Defra for a comment.

National Audit Office lead Gareth Davies 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.”

BNG is a key facet of the 2021 Environment Act.  After the Conservatives’ nutrient neutrality row and scaling back of energy efficiency requirements for landlords, BNG is one of few examples of Ministers clamping down on housebuilding’s environmental impact in recent months.

Industry players have welcomed the National Audit Office report, urging the Government to match the ambition of the policy with the required hard work to ensure its implementation.

Industry reaction

Paul De Ornellas, chief adviser for wildlife, WWF:

“The UK Government has set itself some welcome targets for tackling the crisis of nature loss, but this report illustrates there’s still a long way to go to show how it will actually meet those targets.

“It is not yet clear whether policies like Biodiversity Net Gain, Environmental Land Management schemes and Local Nature Recovery Strategies, will add up to nature recovery on the scale that is needed.

“The Government needs to ‘show its working’ on how its policies will meet its nature targets, alongside meeting other targets like tackling climate change and maintaining a nutritious supply of food.”

Philip Dunne, chair, Environmental Audit Committee:

“In recent years, the UK has seen a marked decline in biodiversity. Rising to this challenge, in February the Government became the first in the world to enshrine a national legal requirement for Biodiversity Net Gain – ensuring developers increase biodiversity by ten per cent compared to what existed before.

“Today’s report from the National Audit Office, commissioned by the Environmental Audit Committee, highlights the bold ambition of this biodiversity policy and notes areas for further work.

“The report finds that the Government has some way to go before it can be confident that benefits of the policy to biodiversity will be delivered as intended. But it is never easy to develop new world-leading laws; I do not doubt the commitment this Government has to match its ambition with the hard work required to deliver across this complicated and novel landscape.”

Signe Norberg, head of external affairs, Aldersgate Group:

“Biodiversity net gain is an important mechanism to ensure that there is a genuine gain, or at least no net loss, to our natural environment from infrastructure and housing developments. If implemented, monitored and enforced properly, this should support wider nature restoration and biodiversity growth, and the scheme is paving the way for a new approach domestically and internationally.

“To maximise its success, Government should ensure it understands the system-wide risks and opportunities that arise from the creation of these new nature markets, that there is sufficient resources for local authorities and regulators to play their part in maintaining the system, and that central government can satisfactorily monitor the effectiveness of the scheme. Businesses are already taking action and it will be vital that we have a robust and credible system in place.”