BNG: Potential pitfalls of the new planning s106 template

For farmers and landowners looking to establish Habitat Gain Sites quickly, in order to record Biodiversity Net Gain (BNG) units on the National Register, the new section 106 (s106) template provided by the planning advisory service (PAS) should be music to their ears, but what should landowners be aware of when using the new document?

Anna Cartledge, head of legal planning and BNG expert at law firm Shakespeare Martineau, highlights some of the potential pitfalls to be aware of if you’re making use of the new document.

When does the 30-year period start?

We know that setting up a Habitat Gain Site requires at least a 30-year commitment to creating and maintaining the land.  

The establishment of the site should be addressed within your habitat management and monitoring plan (HMMP).

Submitted as part of the s106 application, the HMMP sets out how your appointed land manager will establish and thereafter maintain the habitat creation or enhancement.

However, the template agreement does not provide a mechanism for phased delivery of the site, which can be critical to the viability of any proposal when looking to deliver BNG units on larger or more complex sites.

Security for performance of s106 obligations remains a key issue for local planning authorities when considering Habitat Gain Sites, and one that needs to be negotiated on a case-by-case basis.

The PAS template only includes a ‘bond’ as a form of optional security – giving way to interpretation that this is somehow the ‘preferred’ position, which is not the case.

Avoiding duplication of fees

There is an overarching need to ensure that any monitoring fees charged by the local planning authority are reasonable and proportionate, as these will be levied over the 30-year maintenance period.

As it stands, there is a prospect of somewhat double-charging when it comes to monitoring fees.

The template does not currently prescribe or suggest any standards in respect of monitoring the habitat creation or enhancement works, and the industry as a whole needs to look at this point further.

For example, if you can prove that you have a competent person/body monitoring the works, this should be reflected in a lower LPA fee for monitoring the works.

What if my Habitat Gain Site fails?

Clarity and consistency are needed in understanding what happens in the event of failure of the gain site.

Whilst the replacement of lost or failed habitat may seem relatively straightforward, LPAs have got to be realistic when it comes to the steps that landowners are expected to take in remedying any such failure and the agreed timescales have to be realistic.

Any failure of the gain site (and so default in terms of the agreement) is ultimately enforceable against the landowner and so creates an additional burden in the event of any default. 

The freeholder also assumes ultimate liability in respect of insolvency where there is a gain site operator, which is inherently linked to the point around the extent to which security is required under s106s for BNG.

At present, the template does not include force majeure provisions, adding further risk to the landowner as insurance is hard to come by.

PAS template versus LPA template

Section 106 negotiations can be time and resource-intensive for both the local planning authority and offsite provider.

Delays in processing the legal document lead to delays in the creation of BNG units which can then be placed on the national register for sale. 

At present, the PAS’ template is yet to be endorsed by DEFRA or central government and  there is no requirement for LPAs to use, or refer to, the agreement and so there is no guarantee it will speed up the process.

In our experience the LPAs favour their own templates when negotiating s106s and this seems unlikely to change, at least in the short term.

Overall, the template document is a useful point of reference for those working within the BNG space and that its intentions are good: looking to alleviate the pressure on resources by speeding up the process of agreeing and completing s106 agreements and ultimately getting BNG units on the National Register quicker.

Legal advice for Habitat Gain Sites

Our team of legal planning, real estate development, agriculture and private client lawyers can advise and guide on all aspects of biodiversity net gain. Including advising on emerging legislation obligations, site assessments and due diligence, preparing section 106 and BNG unit sale agreements, land purchases and other legal documents.

Contact BNG expert Anna.Cartledge@shma.co.uk