A thought on the wild side


30 October 2019

Making financial capital from natural capital

A combination of the legal effects of the Agriculture Bill and the Environment Bill, as well as rising public interest in conservation and support for environmental enhancement in the 25 year Environment Plan published in 2018, all point in the direction of schemes to increase the conservation value of farmland – even to schemes for “rewilding”.

In this article, I explore some of the legal aspects of such projects and look at how financial and commercial value might be protected.

What is rewilding and what is not?

Rewilding could be described as landscape-scale restoration of balanced natural eco-systems. It aims to reinstate natural processes and may include re-introducing species, including predators to help retain that natural balance. The re-introduction of non-native species can be contentious and requires a licence from Natural England. Farm animals can be introduced without licence as substitutes for some larger “lost” grazing and foraging species (cattle for ponies, pigs for wild boar) and these can be used to provide meat, which may have significance from a planning point of view, as mentioned below.

Rewilding is generally on a scale involving hundreds of hectares of land. Smaller projects for the enhancement of biodiversity would not normally be called rewilding but certainly have a value.

What are the planning implications of conservation projects?

Most smaller scale conservation projects will take place as part of a wider agricultural use of land and will not need planning permission but it is not, in my view, necessarily the case that rewilding projects can lawfully be undertaken without planning permission as it may well be a material change of use of the land.

Much of the land which might be used for rewilding projects is currently agricultural land. Agriculture does not require planning permission and carries with it certain permitted development rights. Rewilding is not likely to be a nil use in planning terms; it is the active management of land in the interests of conservation.

There are social, economic and environmental implications to rewilding with a reduction in food production, change in appearance of the landscape and change in employment. Whilst the environmental changes are generally thought to be positive, there may be species which thrive on farmland which will be displaced by a re-wilding project.

Where grazing livestock for meat or wool takes place as a material part of the project, it is likely that the use would still be agriculture, even if the driving factor of that grazing is not profit. If or when all agricultural activity ceases, however, there will be a material change of use. In some cases the change may be a change of use from agriculture to forestry, which would not require planning permission as forestry is also a use which does not need planning consent.

An unintended consequence of reducing or greatly changing agricultural activity may be the loss of agricultural permitted development rights. One example is that when an agricultural building which has been erected under permitted development rights ceases to be used for agriculture within ten years and an alternative use is not granted permission, the building may have to be removed. 

Is rewilding a reversible process?

I am sure that in purely practical terms rewilded land could be returned to agriculture with a bit of effort and this may lead to a feeling of confidence that no productive farmland will be permanently lost. In practice things may not be so clear-cut. It is entirely possible that land which is returned to nature may soon become rich in wildlife and support protected species.

The presence of protected species will be a challenge for future development of the land, but even more of a challenge would be presented by designation as a site of special scientific interest (SSSI) or other protected site. On some former MOD sites which were not maintained after their use ceased, species such as nightingales have begun to thrive. In at least one case this has resulted in designation as an SSSI. 

Any farmer undertaking rewilding may soon find him or herself the proud owner of an SSSI with significant constraints imposed on how the land can be managed and developed.

Even if the site is not declared an SSSI, land which has been uncultivated for 15 years or is semi-natural cannot be brought back into production e.g. by ploughing, seeding, draining, clearing vegetation or an increase in stock density without an Agricultural Environmental Impact Assessment. If the work is considered by Natural England to have a significant effect on the environment, a "consent decision” will be needed to carry out the work.

Can rewilding be commercially beneficial?

There are currently payments available for environmental stewardship including taking land out of production for species rich meadows, but the payment regime is all going to change in the near future following Brexit, on whatever terms that takes place. It is as near to certain as is possible, though, that under the scheme of subsidies in the forthcoming Agriculture Bill there will be payments available for public goods and that these will include environmental enhancements. 

There are other potential financial benefits to be gained, if care is taken.

Certain projects, e.g. new pig and poultry farms, lead to increases in ammonia. As part of the planning or environmental permitting process, it is sometimes necessary to provide off-setting to ensure a nil net gain in ammonia. This can be achieved by taking farmland out of production and so reducing the application of fertiliser. Even if there is no need for this offsetting within the business there may be a deal to be done with a neighbour; but land already taken out of production cannot be used for this purpose, so timing is everything.

Many development projects will lead to a loss of habitat and in some cases developers need to provide compensatory habitat areas outside the site. There is likely to be a significant financial value for such land as only a few sites may be available or suitable. As matters stand habitat that has already been created will not be able to be counted for compensation purposes and it will be important that the creation is linked by a s106 or other binding agreement, to the development proposal.

The Environment Bill introduced by the Government on 15 October 2019 is likely to increase the demand for environmental off-setting by its requirement for biodiversity net gain for most developments.

There will be an implied condition on all planning permissions (subject to some exceptions) that development may not begin until a biodiversity gain plan has been submitted for approval to the Local Planning Authority. This will involve assessing the pre-development and post-development biodiversity value of the on-site habitat and showing that there will be at least a 10% gain. It will be possible to use registered off-site biodiversity gain allocated to the development to provide that gain and/or to purchase biodiversity credits from the government. 

Biodiversity value will be measured using the biodiversity metric which is to be published by the Secretary of State. Any increase in bio-diversity resulting from a development will only be taken into account if, by virtue of a planning condition, planning obligation or conservation covenant, it will be maintained for 30 years after the development is completed.

Registered off-site biodiversity gain means biodiversity gain which is to be carried out under a conservation covenant or planning obligation, which is recorded on the biodiversity gains register and which will be maintained for 30 years after completion of the works.

To count as registered off-site biodiversity gain the enhancement must be made available to be allocated (conditionally or unconditionally) to one or more developments for which planning permission is granted.

We do not yet know under what terms land may be eligible to be registered (including whether areas which have already been subject to ecological enhancement can be registered) but at this stage, it would make commercial sense to wait to see what opportunities may be available before committing to biodiversity enhancement on a large scale.

In the future, funds may be available to fund the enhancement of habitats from the sale by the government of biodiversity credits. 

A conservation covenant is a proposed new form of statutory agreement (somewhat like a s106 agreement) which will be made between a landowner and a “responsible body” to secure a conservation purpose, including ecological conservation and is intended to be for the public good. 

“Responsible bodies” have yet to be designated, but are likely to include conservation charities and local authorities. Conservation covenants can be entered into by a freeholder or a tenant with at least seven years left on the lease. Unless a shorter period is specified it will take effect indefinitely for a freehold interest and for the remainder of the term in the case of a lease and it will bind successors in title. A shorter period can be specified, but will need to be 30 years if it is to be used for off-site biodiversity gain.

Summary

There are some real opportunities for farmers and landowners not only to enhance biodiversity, but also to make financial gain from doing so. Before entering into these projects careful consideration needs to be given to the wider implications and to the business potential of the proposal.

This article is for general information only. For further details regarding re-wilding, please contact Deborah Sharples on 01473 921732 or [email protected]. Law covered as at October 2019.