Planning matters blog

The Government’s BNG consultations explained (and why you should care)

Anna Maw 16 Jun 2025

The BNG system has an important role to play in improving and enhancing natural habitats, and ensuring development has a measurably positive impact.[1] The statutory Biodiversity Net Gain (‘BNG’) requirement came into force in the English planning system in February 2024, seeking to ensure that habitats for wildlife are left in a measurably better state than they were before development took place. As a result, it is now mandatory under Schedule 7a of the Town and Country Planning Act 1990 for relevant developments to deliver a 10% BNG on the value of all habitats within their redline boundary (known as the ‘biodiversity baseline’).

16 months on from the introduction of the mandatory BNG requirement and we’ve learned how to navigate the statutory biodiversity metric, appreciated the delivery of on- and off-site compensation, and rolled with the punches of varying validation requirements. We’re also starting to see the discharge of BNG planning conditions from the first wave of mandatory BNG developments.[2]

On 28 May 2025, the government launched two consultations relating to BNG, giving stakeholders the opportunity to suggest how the existing system could be improved, and how BNG could apply to major infrastructure schemes:

Improving the implementation of biodiversity net gain for minor, medium and brownfield development; and
Biodiversity Net Gain for Nationally Significant Infrastructure Projects (‘NSIPs’) (which have to date been exempt).

A comprehensive understanding of the proposed changes, and proactive engagement with the consultation is vital, as feedback will contribute towards improving the overall BNG approach, streamlining the delivery of development in turn.

To assist, we have summarised the key proposals and provided our initial thoughts on the two consultations.

Whistle-Stop Guide to the BNG Consultations

Consultation 1 - Improving the implementation of biodiversity of net gain for minor, medium and brownfield development[3]

This consultation seeks views on options to improve the implementation of BNG for relevant developments including extending exemptions, simplifying the small sites metric and easing access to the off-site market.

The key proposals upon which views are sought are outlined below under topic headings.

Exemptions:

Replacing the custom build/self-build exemption with a single-dwelling exemption;
Increasing the de minimis exemption from 25 sqm of affected habitat to 50, 100, 200 (or some other figure);
Exempting all but major development (i.e. the pre-2 April 2024 situation); and
Introducing a new exemption for temporary development granted for up to 5 years.

Minor developments:

Relaxation of the biodiversity gain hierarchy so that offsite and onsite biodiversity gains are treated equally;
Removing the distance penalty for offsite compensation (the spatial risk multiplier);
Relaxation of the trading rules for some minor development;
Giving local authorities discretion to disapply the requirement to deliver BNG for watercourses under specified circumstances.

Other:

Updated definition of Open Mosaic Habitats and ability to use alternative compensation arrangements;
Several proposed changes to the Small Sites Metric; and
Increasing the distance whereby no penalty is applied to offsite compensation.

Consultation 2 - Biodiversity Net Gain for Nationally Significant Infrastructure Projects[4]

This consultation seeks views on the implementation of BNG for NSIPs.

The Government propose that NSIP schemes deliver a 10% BNG from May 2025, and the consultation provides draft model text for core ‘biodiversity gains statements’ that will be applied to each NSIP sector. Biodiversity gain statements will set out the biodiversity gain objectives for each NSIP type, and eventually be incorporated into the relevant National Policy Statements (‘NPS’).

To ensure proportionality and consistency, BNG will be implemented for all onshore NSIP sectors, and will apply to any temporary, permanent and associated development included within the DCO site boundary (‘order limits’). Marine NSIPs beyond the intertidal zone are not currently included within the scope of the mandatory requirements for BNG.

The consultation suggests the following:

Evidence required for submission and decision making:

Under the proposed NSIP scheme, a Biodiversity Gain Plan (BGP) demonstrating how BNG will be delivered and a completed biodiversity metric calculation must be submitted with the application, rather than at the post-consent stage, although there will be an ability to update and finalise BGPs post consent.

Calculating BNG:

NSIPs must use the statutory biodiversity metric to calculate biodiversity value for the purposes of biodiversity net gain.
The statutory biodiversity metric user guide will be updated ahead of BNG becoming mandatory for NSIPs, to provide additional details on how the metric can be applied for NSIPs.

Delivering BNG:

Delivering BNG for NSIPs will differ from BNG for development granted permission under the TCPA 1990. Applicants will be able to deliver BNG on-site or off-site in the first instance, and by purchasing statutory biodiversity credits as a last resort.

Reflection on the consultation

Lichfields welcome the consultations, which demonstrate the government’s commitment to finding a pragmatic way forwards to striking an appropriate balance between delivering development and enhancing biodiversity. The introduction of the statutory BNG requirement has been a big change for the planning system and has, inevitably led to some significant challenges, particularly on smaller projects and on some brownfield sites. We believe the consultation represents a positive step forwards in addressing some of these challenges whilst not losing focus of the need to deliver meaningful gains in biodiversity.

We are pleased to see the BNG for NSIP consultation, having waited some time for this guidance to be released. It provides some clarity on how BNG will work in relation to NSIP development, with some key differences to the system operating for developments subject to planning permission.

How we can help

Lichfields’ specialist in-house BNG team have been busy scrutinising the consultations and are able to assist with making representations.

If you have any queries regarding the new government consultations, or navigating the BNG system more generally, please get in touch. We look forward to working with our clients at this stage in the process and hearing your thoughts on the consultations.

Both consultations close at 11:59pm on 24 July 2025.

Footnotes

[1] Department for Environment, Food & Rural Affairs (2025) Biodiversity net gain for nationally significant infrastructure projects. Available at: https://www.gov.uk/government/consultations/biodiversity-net-gain-for-nationally-significant-infrastructure-projects

[2] Overhead, H (2025) As BNG turns 1 is the system toddling forwards or still giving us sleepless nights? Available at: https://lichfields.uk/blog/2025/february/12/as-bng-turns-1-is-the-system-toddling-forwards-or-still-giving-us-sleepless-nights

[3] Department for Environment, Food & Rural Affairs (2025) Improving the implementation of biodiversity net gain for minor, medium and brownfield development. Available at: https://www.gov.uk/government/consultations/improving-the-implementation-of-biodiversity-net-gain-for-minor-medium-and-brownfield-development

[4] Department for Environment, Food & Rural Affairs (2025) Biodiversity net gain for nationally significant infrastructure projects. Available at: https://www.gov.uk/government/consultations/biodiversity-net-gain-for-nationally-significant-infrastructure-projects

Spending Review signals optimism for economic and housing growth

Richard Coburn, Edward Clarke & Sakhi Sumaria 11 Jun 2025

The much-anticipated Spending Review delivered by The Chancellor to Parliament today has brought with it a cautiously positive outlook for the development and regeneration sectors albeit not without a sting in the tail. With these sectors in mind, our key takeaways are captured in four key themes all of which will be a primary focus for increased public sector investment in the period up to 2029:

Energy & defence;
Places & communities;
Social & affordable housing; and
Transport infrastructure.

Energy & defence

Without doubt the large capital injections for defence, security and energy will support significant economic and housing growth in key clusters across the country. This will include the stimulation of supply chains and skills development programmes throughout the UK, irrespective of where the major projects themselves are located.

Whilst (hopefully) not Trump-infected, The Chancellor dropped plenty of straplines which could be construed as ‘Making Britain Great Again’! Using the saving of British Steel as an example, she highlighted that the Spending Review was one which aimed to encourage ‘buying, making and selling more in Britain’. Similar sentiment was captured by her aim of making the UK a ‘defence industrial superpower’ and that ‘energy security means national security’. This industrial drive is backed by a commitment for increased Government R&D expenditure to £22 billion per year to 2029.

The thrust of The Chancellor’s message to restore advanced industrial capacity and autonomy to the UK where it can be viable to do so is encouraging from an economic development perspective. This approach is supported by a longer-term approach to Government investment although political sceptics can be forgiven for not being convinced!

Lichfields will comment further on the implications of the final Industrial Strategy when it is published in the coming weeks.

Places, communities & business cases

The Spending Review marks a revitalised and seemingly serious Government commitment to taking a place-based approach to investment, not least through the parallel publication of the findings of the Treasury Green Book Review (Green Book Review 2025: Findings and actions - GOV.UK). The Green Book specifies how all projects and programmes promoted by the public need to be appraised. In doing so, it sets the framework for developing the business cases which must underpin decisions to invest or not.

Despite much political lip-service over the years, the Green Book Review acknowledges that the current guidance does not properly address the economic disparities that are evident across the country. Indeed, the Review explicitly states that ‘…many places have simply not received the investment they need to grow and flourish’. Moreover, it is candid and honest by highlighting that: ‘By design, business cases typically answer the question – what is the best way to undertake this project, rather than what is the right project to improve growth in this area?”. Positively, it sets out the key areas for action that will inform a subsequent update to the Green Book and thus the approach which will need to be taken to business cases aimed at ‘winning’ public sector funding for projects. We keenly await the outcome the Review and are optimistic that, compared to the last decade, the changes could ensure Government funding programmes aimed at regeneration and economic growth projects in the coming years are much more effective and targeted at the places which need it most.

Reflecting on the funding mechanisms applied by Government over the last decade, Lichfields will soon be issuing an Insight paper which seeks to provide guidance on how local authorities and other bodies can improve the business cases required to access public sector funding.

This fresh endorsement of a strongly place-based approach has been immediately translated into funding programmes promised today by the Chancellor. She has committed to providing a 10-year capital settlement through a new local growth fund, investing in up to 350 of the most deprived communities in the UK, confirming additional funding for mayoral strategic authorities through the Devolution Priority Programme and establishing the Growth Mission Fund. Whilst a budget has not yet been specified, the latter is designed to fast-track sound local growth projects that have previously failed to attract funding.

The Government’s intentions for places are clear: deliver growth where it is needed the most. This approach to funding hopefully will put local communities first and remove bureaucratic barriers to investment by ensuring Government guidance provides a proportionate framework for projects to make the case for investment, giving schemes a fighting start to secure the funding they need.

A key challenge for Government will be to ensure that access to these funds remains fair and equitable. In their Autumn Budget 2024, the Government committed to reforming local growth funding within Phase 2 of the Spending Review, including moving away from a competitive bidding process[1]. Today’s Spending Review made no clear mention on the structure of funding programmes in the coming years. In order for Government to deliver on its commitment to places, it is imperative that there is a step change in the administration of funding, shifting away from a competitive to a more collaborative process.

Social & affordable housing

Housing was again close to being front and centre of the Spending Review. The mission to ‘renew Britain’ saw an overall shift in spending, tacking towards investment with £113bn to spend on infrastructure, and away from current spending by limiting day-to-day budget increases. Amongst the most significant commitment was the £39billion over the next 10 years of the affordable homes programme (AHP) – the Treasury and MHCLG describing it as the biggest boost to “social and affordable housing investment in a generation” and with significant industry support. The flipside to this being that MHCLG, confronted with a significant workload (including another new NPPF, local government reorganisation, the devolution and PIN bills expected within a year) is facing a -15% cumulative real term fall in departmental administrative budget between 2025/26 and 2029/30.

Affordable housing undoubtedly has needed investment and arguably reform. On this front, the Government have gone further than many expected: £3.9bn each year is a lot more than the £2.3bn under the previous Government, a consultation on rent convergence would also allow them to secure their finances further and the 10 year settlement period rather than 5 offers much needed certainty for a sector which has been finding it difficult to finance investments in new stock.

The Government are also looking to lever in private investment using “financial transactions” which includes government backed loans and will be used for the upcoming mortgage guarantee scheme also announced. The Treasury announced that through these measures they will ‘crowd in private investment’ and boost house building by confirming £4.8 billion in financial transactions from 2026-27 to 2029-30. This additional capacity will be managed by Homes England. Measures like these will be an important part of adding certainty to the industry looking to turnaround the historically low number of homes built and granted permission in the last year.

The industry’s next question will be whether the AHP funding will be available for affordable housing under Section 106 agreements? The announcement of a ‘clearing service’ for section 106 housing opportunities in December signalled that the Government are acutely aware that there this is a growing issue, with significant numbers of market housing developments being held back a lack of registered providers taking on Section 106 housing. Previous Lichfields analysis also found that on consented larger sites, those with a higher share of affordable housing built more quickly than others (likely due to higher absorption rates).[2]

If funding cannot be used in this way the impact will be more limited, leaving open market delivery stymied.

The Government has used the Spending Review to increase funding for affordable housing delivery and backing housebuilders more widely. This will help boost the rate of build out on sites with planning consents and will help with driving more permissions. Taken alongside the NPPF changes, the Planning and Infrastructure Bill, devolution bill and wider changes, the Government are clearly continuing to place housebuilding at the centre of their pro-growth strategy. To achieve 1.5million homes, or 300,000 homes delivered a year, the turnaround will need to be dramatic[3] and immediate. It is yet to be seen whether the positive effects of new legislation, policy reform, and today’s funding allocations will be the necessary driver.

Transport infrastructure

Image credit: Matthew Waring via Unsplash

As for the investment in the new nuclear power plant – Sizewell C in Suffolk, pre-Spending Review announcements have already been made regarding the Government’s commitment to boosting investment in rail and other public transport projects, particularly in the North. This includes £15billion on tram, train and bus projects in mayoral authorities across the Midlands, the North and the West Country. On top of this is a commitment of £3.5 billion support to complete electrification of the cross-Pennine route, £2.5 billion for East-West Rail and a fourfold increase in local transport grants.

If planned and delivered in an integrated and collaborative manner, the local housing and economic growth benefits of these transport investments could be considerable.

If you operate in development, regeneration or economic development, there are many reasons to be cheerful from today’s Spending Review. Nevertheless, the Chancellor’s fiscal headroom remains very tight, so it will be intriguing to see if the measures announced today will mark the start of a genuinely sustained period of economic security and growth.