Biodiversity Offsetting – 27th Jan 2014

Sheldon Bosley has been monitoring the progress of the Biodiversity Offsetting Scheme Pilot.  Farmers and Developers will be interested in the outcome.

Habitat

Laura Gaydon MRICS FAAV writes.

Summary of Scheme

  • Biodiversity Offsetting allows Developers to deliver biodiversity benefits in compensation for losses occurring on development sites.  By purchasing ‘credits’ from Landowners who undertake biodiversity management, this relieves the Developer’s responsibility of maintaining their own area of land for biodiversity purposes.
  • Landowners commit to a 30 year management scheme, for creating, protecting or restoring habitats on areas or parcel(s) of land which have been assessed for their biodiversity value, and gain funding for the period of the management agreement.  The funding is paid by Developers who purchase ‘credits’ to counter-act any habitats they may have lost on development sites.  The purchased ‘credits’ should be of similar habitat value and within the locality.
  • Before the Offsetting Scheme is considered, Developers must consider all other options of creating habitats on site, or mitigating before looking at offsetting alternatives.
  • Irreplaceable sites cannot be compensated for, to include SSSIs or ancient woodland.
  • The Scheme acts to compensate for any lost biodiversity by retaining management of other areas of land in the locality.
  • DEFRA have provided a metric scale for assessing the habitat quality on the development site, to include quantity, level of biodiversity, size etc.  The site being put forward by a Landowner will also be assessed and given a number of ‘conservation credits’ which they can sell to developers looking for ‘credits’.Biodiversity 2014

Advantages

  • Income to Landowners for protecting, improving or creating natural features.
  • Income guaranteed for 30 year period at pre-agreed instalments.
  • Potential income for sites which may have little agricultural benefit/productivity, or with poor access.

Disadvantages

  • Landowner tied into 30 year management plan – long period of time to guarantee land taken out of production/management obligations being upheld.
  • Rates of income or credit value are calculated now – but value in 15 or 25 years’ time is very difficult to calculate, particularly if food productivity / gross margins / subsidy increases.
  • The Agreement is a legal contract with land owner– if sold, management obligations must be transferred on sale.
  • There is little or no known funding at present for monitoring and reporting during the Scheme – monitoring will be as stated in the management plan prepared, however will probably be through self-assessment by the landowner – photos, invoices, site inspection.
  • Dual funding and compatibility with ELS/Basic Payment Scheme and EFAs not known (DEFRA consultation not yet completed).
  • This will be in addition to CIL/Section 106 – ultimately costs of ‘offsetting’ will come out of the original Landowner’s pocket (who owns original development site).
  • The farmer or landowner has to outlay fees upfront for preparing a management plan and undertaking an ecological survey – no guarantee of acceptance into Scheme, therefore costs may not be recovered from Developer.
  • Potential issues for APR/BPR if areas of land are taken out of production and main income or activity is not agricultural.
  • Consideration needs to be given in preparation of Promotion Agreements – difficult to calculate the value of credits or offsetting costs at present.
  • Legal agreement between Environment Bank and Landowner will need careful review by legal adviser – extra expense for Landowner.

Further Comments:

  • Suggest an Adviser is needed throughout management plan to review Scheme and provide advice if management prescriptions are not working – funding for this unknown.
  • If prescriptions are not working, how can the Landowner resolve these issues without being penalised/paying back money to date?
  • Contingency costs need to be built into the management plan.Biodiversity
  • Income to be index-linked or interest-linked, but how can prices in 2014 reflect those in 2024 and 2034 onwards?
  • DEFRA Consultation on interaction with Stewardship and Basic Payment Scheme etc not yet released.
  • Six official pilots ongoing at present – Warwickshire is one.  Natural England are overseeing pilot schemes and will provide results at the end of the pilot period – Spring 2014.

Examples of Management:

  • Woodland Restoration;Biodiversity planting
  • Woodland Replanting;
  • Hedgerow Restoration, to include gapping up, coppicing, laying;
  • Grassland Management, to include low input grassland, restoration of species-rich meadows etc;
  • Reducing stocking rates;
  • Reverting arable land to permanent pasture/field corners;
  • Buffer strips;
  • Management of scrub;
  • Management of bankside vegetation adjacent to watercourses.

For more information contact Laura Gaydon 01608 661666 or lgaydon@sheldonbosley.co.uk

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