Lichfield District Council

Case Study 04

Location Lichfield District Council, Staffordshire Habitats Healthland, woodland, grassland, rivers and wetland

In 2014 Lichfield District Council began designing a policy which would establish a mechanism which would mandate a net gain in biodiversity from any new development in the district. This scheme, known as ‘the Lichfield model’ became policy in 2016, seven years before BNG is to become mandatory across England this year. The model won an Local Government Chronicle (LGC) award in 2022 for its innovative approach.

The main features of the scheme are:

● Developers must submit a ‘biodiversity offset feasibility plan’ required to show a 20% net gain in biodiversity (more than 10% gain stipulated in Environment Act 2021) from any new developments. This is known as the ‘replacement percentage’.

● The rule only applies to habitats lost, which incentivises retaining the best habitats already present on a site.

● Lichfield’s Nature Recovery Network (NRN) Mapping and Habitat Creation Opportunity Map shows strategic sites, habitat corridors and distinctiveness within these. This builds on the success of a project within its Nature Recovery Network, which describes key locations where habitats may be created or enhanced, and Lichfield District Land Search which highlights where land is, or may be available, for biodiversity offset delivery.

● A decision matrix to understand which project is the next most ready and willing, and right habitat, right place.

● This policy has led to standardised and enforceable ecological planning conditions and standardised and enforceable s106 agreements (section 106 agreements, a type of planning obligation). These however offer some flexibility in implementation.

● BUs are sold at £35,000 per Biodiversity Unit (BU), but were previously sold at £21,000 per BU.

● Revenue is ring-fenced to carry out habitat management according to what has been legally agreed, but can be used as match funding to offer other benefits

● Alternatively, developers can source BU from third-party providers and the council is currently conducting land search to find other third-party local landowners (e.g. estates, wildlife trusts) who are willing to deliver biodiversity offsets, some of which will be ‘shovel-ready’.

Revenue Model Sale of Biodiversity Units (BUs) from District Council or third party land to developers required to mitigate habitat lost during development.

LDC charges an administration fee on top of transactions to provide ongoing funding for the scheme.

Loan or Finance Structure

Equity investment.

Parties involved Lichfield District Council - Scheme administrator, provider of Biodiversity Units from public land

Third-party landowners – Providers of Biodiversity Units Developers – purchasers of Biodiversity Units

Environmental improvement

The scheme provides a mechanism by which funding can be provided to restore valuable habitats, supporting Lichfield’s wildlife

Barriers encountered and how these were overcome

Local Authority capacity and ecological resource. Few experts in new niche environmental law and legislation. Timescales involved were challenging.

Between Revenue Generation And Barriers

The proportion of barriers reported by projects corresponding to their revenue plans.

Lack / scarcity of investment readiness support %

Revenue Stream

Biodiversity Unit sales

Carbon credit sales

Natural flood management payments

Ecotourism

Nutrient payments

Second most common barrier

Availability of data

Availability of data

Governance structures / legal entities

Governance structures / legal entities

Availability of data

Lack of data was less of an issue as projects move towards revenue generation but appears to be a significant issue at the revenue generation phase. Lack/scarcity of investment readiness support was unsurprisingly reported more frequently than those expecting to within the next 5 years. It was also however significantly reported by many projects generating revenue.

‘Revenue uncertainty’ was the most common barrier reported across the five most popular revenue streams. The second most common barriers are reported here: