Budgeting biodiversity units and statutory credit prices

Your biodiversity credit price budget should be a number you never spend. Statutory biodiversity credits sit at the bottom of the hierarchy under the Environment Act 2021 regime, and the government has priced them deliberately above what the off site market is expected to charge, so that buying them remains the last resort rather than the easy option. Treat the published schedule as a ceiling, and work backwards from it.

Biodiversity net gain assessment requires a competent person under the Act. A drafted report is a starting point for that specialist, never a substitute.

Where the statutory credits sit in the hierarchy

The requirement is a minimum ten per cent gain measured in biodiversity units, secured for at least 30 years, with a biodiversity gain plan approved by the local planning authority. A biodiversity gain condition is deemed to be attached to most planning permissions in England, following the regime's start dates in February 2024 for major development and April 2024 for small sites.

The order of delivery is fixed:

1. Avoid losses on site, then deliver gains on site.
2. Where on site delivery is not possible, use registered off site gains, whether on land you control or purchased from a habitat bank.
3. Where neither is possible, buy statutory biodiversity credits from the government.

That order is not a preference. The gain plan has to explain the steps taken at each level before moving down, and an authority can reject a plan that reaches for credits without demonstrating the earlier steps were considered.

Note also that area units, hedgerow units and watercourse units are counted separately, and each has to achieve the uplift in its own right. Watercourse losses cannot be made good with area units.

What the published price schedule does to your budget

The statutory credit prices are published by government as a schedule, with a price per unit varying by habitat tier, so a unit of low distinctiveness grassland costs far less than a unit tied to a high distinctiveness habitat. The schedule is reviewed, so take the figures from the current version on GOV.UK rather than from any summary.

Two features of it shape a budget.

The prices are set above expected market rates on purpose. That means the credit cost is an upper bound on what you should ever pay in the off site market, and any habitat bank quoting above the statutory price for an equivalent unit is quoting badly.

The tiering means the habitat you lose, not the habitat you create, drives the cost. Clearing species rich grassland or ancient hedgerow generates a requirement in a higher tier than clearing arable, and the credit price follows the tier. A site survey that identifies a high distinctiveness habitat can change the budget by an order of magnitude, which is why the baseline survey is the most consequential spend on the whole exercise.

Baseline units decide everything

The arithmetic is unforgiving. Your requirement is ten per cent above the baseline, so a high baseline means a high absolute requirement even if the percentage is fixed.

The trading rules then constrain how you meet it. Medium, high and very high distinctiveness habitats have to be replaced with the same broad habitat type or better, so losing a parcel of a scarce habitat cannot be answered with a large area of amenity grassland. That rule is what turns a modest unit deficit into an expensive search for a specific habitat type in the right place.

A preliminary ecological appraisal and the metric baseline should be commissioned together, because the habitat classification underpinning the metric is the same survey work.

Spatial and temporal discounts

Two multipliers in the statutory metric do most of the damage to off site budgets.

The spatial risk multiplier discounts units delivered further from the development. Units within the same local planning authority area or National Character Area count in full, units in an adjacent area are discounted, and units further afield are discounted more heavily. Check the current metric version for the exact factors, because they change between releases. The practical effect is that low priced units two counties away can cost more in gross units than local ones at a higher price per unit.

The temporal discount reduces the value of units that take years to reach their target condition. Create a woodland and the units arrive decades later, so the metric applies a compounding annual discount that can require a substantially larger area than the headline deficit suggests. Habitats that reach target condition quickly, such as some grassland types, are better value per hectare for exactly this reason.

Add the difficulty multipliers for habitat creation and the position is clear: the lowest priced unit on paper is rarely the lowest cost unit delivered.

The thirty year cost nobody budgets

Buying a unit from a habitat bank is a single payment and the price should already include management. Delivering units yourself is not.

Where you create or improve habitat on land you control, the real budget includes:

• The establishment works, including soil preparation, seeding or planting and the first three to five years of failure replacement.
• Management for 30 years, costed per hectare per year by habitat type and indexed.
• Monitoring and reporting to the authority at the intervals the legal agreement specifies.
• Legal costs of a conservation covenant with a responsible body, or a section 106 agreement, plus registration of an off site gain on the biodiversity gain site register.
• A contingency for remedial works where condition targets are missed at a monitoring point.

Thirty years of management at a few hundred pounds a hectare a year is a meaningful present value, and schemes that treated it as a landscape maintenance line have been caught out. Price it as a liability and compare it with the habitat bank quote before deciding to self deliver.

Budgeting before the baseline is known

At the point you need a number, the survey has often not happened. Three ways to produce a defensible figure anyway.

Use the habitat you can see. Aerial imagery, priority habitat layers and a walkover will tell you whether the site is arable, improved grassland, scrub or something more interesting. The difference between those is the difference between a modest requirement and a difficult one.

Budget the worst credible case for the habitat types present, then revise once the baseline is in. An appraisal that carries a nil biodiversity line until the ecologist reports will be reopened.

And get the survey done in season. Botanical condition assessment needs the growing season, broadly April to September. A surveyor working in January either cannot assess condition or has to assume it, and a cautious assumption of good condition inflates your baseline, your requirement and your budget. An out of season survey is paid for twice: once for the survey, once for the units it invented.

The biodiversity net gain assessment is the document that pulls this together for the gain plan, and the sequencing of survey seasons against the application programme is the part worth settling first.

Where a design change beats a purchase

Almost always, on sites with any slack in the layout.

Retaining a hedgerow rather than removing and replanting it avoids both a hedgerow unit deficit and the temporal discount on the replacement. Pulling a road alignment off a parcel of semi improved grassland can remove a high distinctiveness loss entirely. Specifying species rich grassland in place of amenity mown grass on land you are landscaping anyway generates units at close to zero marginal cost. Designing attenuation features as wetland habitat rather than engineered basins does the same, and a landscape strategy written with the metric open on the desk is worth more than one written afterwards.

The measure of whether this is working is simple. Run the metric on the layout at each design iteration rather than once at the end. A scheme that only discovers its unit deficit at submission has lost the ability to design its way out, and is left comparing habitat bank quotes against a statutory price it was never meant to pay.

Planning fees move on their own timetable and are indexed each spring, which is a separate line in the same budget and covered in the piece on how planning fees are indexed each April.

For specialist technical reports, qualified professional input may be required. This is general guidance, not legal advice; check the position with your local planning authority or a qualified professional before relying on it. PlanScope provides AI-assisted draft reports for planning applications. Reports should be reviewed before submission. We do not guarantee planning approval.

See PlanScope pricing if you want to draft the reporting around your metric output before the specialist finalises it.