August 2023

Some helpful updates are available this month which provide guidance on what the likely requirements will be when BNG becomes mandatory.

Timings

Defra has provided useful clarification as to when schemes will be held to a mandatory 10% BNG requirement, namely from post January 2024:

“Mandatory BNG will only apply to new applications for planning permission for major development made after January 2024. We are working with DLUHC on transitional arrangements to ensure that BNG is not applied retrospectively to planning applications that have been submitted or have already been granted permission before the implementation date. For example, applications made under s73 where the earlier permission was submitted or granted before this date. We will set out more detail on these arrangements in due course”.

Further information is available here.

Schemes already in receipt of outline permissions

Clarification is also available that schemes already in receipt of an outline permission will not be held to a 10% BNG requirement:

“Reserved matters will not be required to fulfil mandatory BNG if the outline was approved prior to mandatory BNG; it will only apply to new applications submitted once BNG is mandated (from January 2024)”.

More details are available here.

Availability and cost of government statutory BNG offset credits

The government has advised that statutory BNG offset credits will be available to buy once BNG becomes a mandatory requirement. However, government sees the use of these as an option of last resort. Accordingly, a punitive price tag is attached to the purchase of such credits, the price list for which the government has now published here.

Example costs for medium distinctiveness grassland are 42k /unit which is roughly double the typical market cost at present, whilst costs for any loss of the Priority habitat lowland mixed deciduous woodland are priced strongly at 125k. Costs for a selection of other habitat types are also available.

In addition, a further spatial risk multiplier will be applied, which will require two government BNG credits to be purchased to offset the loss of every BNG unit, further increasing the cost burden of utilising government credits.

Therefore, in summary the use of government offsetting credits is likely to be an option of last resort due to the significantly elevated costs involved in their purchase.

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