IEMA Director Policy & Public Affairs, Ben Goodwin said: “Getting Biodiversity Net Gain right across different development types and sizes is critical, but it is a long-term endeavour and will require iteration to achieve the best outcomes. The conclusions of the National Audit Office's report are consistent with this.

“Thinking about the health of the natural environment and its relationship with development more widely, we urgently need a framework in place that can marry-up disparate policy interventions on planning and environmental impact assessment reform, alongside BNG itself.”

The NAO report found: In November 2021 Defra publicly committed to launch statutory BNG within two years. It worked quickly, developing a novel policy through an existing and complex planning system, and statutory BNG was launched in February 2024. However, in prioritising launching the policy it accepted some significant risks to effectiveness which it must now manage as the policy moves from implementation to business as usual.

Defra launched its policy before having all the elements in place that it needs to ensure statutory BNG is a success in the long term. Although it considered that the arrangements it had in place at launch were sufficient, it has a long way to go before it can be confident that damage to biodiversity through development will not be understated and that the benefits of biodiversity enhancements will actually be delivered. For its market-led approach to work, Defra needs the market to scale up to meet demand, and for statutory biodiversity credits to deliver biodiversity when the market fails to do so.

Local authorities manage many aspects of statutory BNG through the planning process, including ensuring compliance and enforcement. For now, there is doubt about whether local authorities will be able to discharge these duties effectively. In addition, it is not clear whether Defra will have sufficiently granular monitoring data to assess policy performance. Without these, Defra will not have assurance that its statutory BNG policy is delivering biodiversity outcomes and value for money for taxpayers.

The Environmental Audit Committee, which commissioned the report from the NAO, is undertaking an inquiry into the current and potential future role of natural capital in the green economy, and the Government’s proposals to increase private investment in measures to support nature recovery.