The principle of delivering a net environmental gain (NEG) on all new development was included in the 25 Year Environment Plan published last year. NEG is an adaptation to the planning system that seeks to ensure that new developments do not negatively impact on the environment, but also seeks to utilise planning gain to finance investments in environmental improvement. The Chancellor confirmed in the Spring Statement in March 2019 that plans for making NEG compulsory would be brought forward for inclusion in the 2019 Environment Bill.

Currently, NEG is optional for planning authorities, with approximately 77 out of 340 committed to delivering the concept. Defra consulted in December 2018 on the broader application and operation of NEG for all residential, commercial and infrastructure developments. The Defra consultation describes how the NEG process should work. Any planning site should first be subject to a habitat survey, and the data from this used to populate a biodiversity metric. This metric illustrates how biodiversity impact can be first avoided, and then creates a credit for net gain that can be delivered on the same development site or close by. Delivering on-site maintains habitat connectivity and ensures that communities impacted by development do not lose green space. Early pilots of NEG highlighted that the key to the success of offsetting was the effective application of this “mitigation hierarchy”.

Defra’s vision, as shown above, is for three different offsetting scenarios depending on the level of avoidance and mitigation deliverable on site or nearby. Under Scenario C, a tariff to pay for habitat creation elsewhere is created to compensate for a lack of local opportunities. It is off-site mitigation that may present an opportunity for landowners looking for private opportunities to deliver environmental goods.

Defra is trialling a more accessible version of the NEG metric that will be launched later this year. The metric enables both the impact of the development and proposed improvements to a landscape to be quantified. A private contract between the developer and the landowner sets up a long-term agreement (25-30 years) for the management of land that delivers the required NEG. There is a bias in the metric to this being delivered locally to the development, but given the scale of development predicted in some areas this is likely to create high levels of demand and push the offsets needed further afield from the original site.

The accountability of the offsetting contract is key to the successful delivery of NEG, both in terms of ensuring that the predicted environmental gain is delivered, and in preventing the same site from being endowed for the same environmental improvements more than once. The concept of environmental services, however, means that there could be multiple buyers for multiple services from the same piece of land, and therefore careful drafting of the NEG contract is crucial to prevent other uses being excluded.

For landowners interested in NEG opportunities, the first step is to consider what biodiversity is present on the farm and what improvements could be delivered by changing the management of the land. This could be as straightforward as converting bare arable land to semi-improved grassland, or more complex habitat restoration schemes. Working with local ecology or wildlife experts is necessary to create an environmental gain plan that creates and quantifies the “units” that are recognised under the Defra metric. Careful brokerage of these units into the developers is then needed to ensure that the best price and contract terms are received for the landowner in a manner that delivers maximum advantage to the developer and planning authorities.

_{Read the articles within Delivering Future Arable Performance below.}