Delays caused by Biodiversity Net Gain requirements threatening SME builders as councils employ hundreds of consultants to meet needs

SME home builders are facing huge challenges to implement Biodiversity Net Gain (BNG) environmental requirements, with the lack of capacity in Local Authority planning departments the number one reason for BNG-related delays, a report released today by the Home Builders Federation (HBF) reveals.

The research, based on a survey of home builders and a Freedom of Information (FOI) request of local authorities, finds that 98% of small and medium-sized enterprise (SME) builders are finding implementation of the new requirements a challenge, with delays in the process as a result of a lack of local authority capacity being the biggest barrier.

BNG was introduced via new legislation in 2019 and ensures that new development enhance wildlife habitats and ecology, requiring developers to achieve at least a 10% net gain in biodiversity. Since the requirement was introduced in February 2024, it has proven new homes and environmental benefits can be delivered together.

A lack of capacity in Local Authority planning departments has long been a major frustration for industry. Resultant delays to the processing of planning applications prevent builders from getting onto sites to start work, delaying the delivery of vital new homes. Overstretched departments now have the additional responsibility of BNG to contend with, delaying application sign-off further and putting yet another barrier in the way of increasing housing delivery.

94% of respondents to HBF’s survey said they have experienced delays in processing planning applications due to BNG whilst 90% experienced delays specifically due to insufficient BNG expertise or resources within local authorities.

Despite the significant additional workload required to oversee and monitor BNG, the FOI carried out by HBF found that:

• Nearly 40% of local authorities lack access to in-house ecological expertise.
• A quarter of councils have seen ecologists leave their role in the past year.
• One in three councils have not expanded their ecology teams since BNG was introduced.
• Around a quarter of staff recruited to support BNG requirements are temporary.

Local authorities are also increasingly reliant on external consultants, spending an average of £23,000 per year per council on BNG-related consultancy fees. This constitutes the majority of Defra’s BNG funding for local authorities before the costs of hiring new staff or providing training for existing staff are even taken into account. Furthermore, the National Audit Office estimates that Government funding equates to just 0.66 full-time equivalent (FTE) ecologists per council, far below the level required for effective implementation.

The number of SME builders has dropped dramatically in recent decades, with the ever more complex and bureaucratic planning system being one of the main reasons. SME home builders face additional difficulties in navigating the costly and lengthy process, and many are stopping house building as a result.

Whilst larger sites may be able to accommodate BNG requirements on site by creating green spaces or adding in features that support biodiversity, smaller sites - where there is no available space to do so - are often reliant on buying off-site biodiversity units to meet the requirements. However, one year on there is still a shortage of suitable credits available, increasing their costs and posing a substantial threat to the viability of smaller house building sites. 85% of home builders with small sites believe the costs of BNG are not proportionate given the size of their projects.

Survey respondents also identified inconsistent BNG guidance, additional local policy requirements, and a lack of suitable external ecological expertise as posing a risk to their business and their ability to build.

HBF is calling on Government to ensure LPAs are sufficiently staffed and placed on a sustainable financial footing. Government should also put in place a strategy to address the recruitment crisis for ecologists in both the private and public sectors.

Neil Jefferson, Chief Executive at the Home Builders Federation, says: “The home building industry has embraced BNG and is committed to both increasing housing supply and protecting and enhancing our natural environment

“However, if we are to increase supply alongside these new requirements it is vital to address emerging barriers to implementation, such as the insufficient resourcing of local authorities, shortage of ecologists, and inadequate national guidance. Government must provide clarity, funding, and support to planning departments so that they can deal with applications effectively and remove this barrier to getting new homes built.”