Plymouth establishes green bank so BNG requirements benefit the city

Plymouth City Council’s cabinet has approved a £500,000 loan for a habitat bank that aims to make sure the city's natural habitats are enhanced and maintained.

Ocean City Nature was established in March 2023. It is also designed to ensure that the biodiversity net gain required by the Environment Act 2021 for large developments benefits the city and its residents.

The mandatory 10 per cent requirement was due to come into force in November but has been delayed until January 2024. This was confirmed at the end of September. 

The government has said that by the end of November, it will have published all guidance and regulations related to BNG.

Ocean City Nature will be an arm's length, council-owned company initially funded by a 

£500,000 loan from the local authority. The project was conceived and developed through the Future Parks Accelerator (FPA) – a joint initiative between the National Lottery Heritage Fund and the National Trust. Support was provided by the impact investment adviser Finance Earth, and additional funding support came from the Department for the Environment, Food & Rural Affairs' (Defra) Natural Environment Impact Readiness Fund.

Plymouth City Council, the first council in the UK to roll out this model, explained that it believes this model could pave the way for how local government can protect and improve the natural environment, as well as how “fresh thinking and enterprise” can encourage economic development in urban areas.

The council also wants to guarantee that investment in biodiversity is realised in Plymouth, rather than elsewhere.

Approved by the council's cabinet today (16 October), the loan will be used to enhance biodiversity in Cann Woods, Ham Woods and Chelson Meadow. Work will include tree planting, coppicing and thinning, improved grassland management and seed sowing. This work will be carried out over the first year of operation.

During the cabinet meeting, Councillor Tom Briars-Delve highlighted the recent State of Nature 2023 report, published in September, which found that across the UK species studied have declined on average by 19 per cent since 1970, while nearly one in six species is threatened with extinction from Great Britain. 

He set out the benefits of the habitat bank, including that the model will be an effective means to channel millions of pounds of funding into local green spaces. "We want Plymouth's fields, woods and wetland habitats to benefit directly for the sake of our nature and our communities. Done right, the habitat banking vehicle could be our best opportunity to give nature recovery in Plymouth the helping hand it desperately needs."

As part of the BNG requirements, developers who build in the city will be able to purchase 'units' of already established biodiversity from Ocean City Nature in order to fulfil their legal obligations, contributing to the city's goal to create an environmental legacy in publicly owned natural environments.

Income from selling BNG units will be used to repay the £500,000 loan and fund the maintenance of the sites.  

The income from the sale of the units will then be used to repay the initial loan with interest and fund the ongoing maintenance of the sites.

Harry Bowell, director for land and nature at National Trust and FPA board member, said it is hoped the model is useful to other local authorities wanting to restore nature in ways that benefit their local communities.

"It’s vital government seizes the opportunity to build the capacity of cities and towns across the country to follow Plymouth’s lead in creating new ways to invest long term in urban nature recovery.”

Richard Speak, founder director at Finance Earth added: “Ocean City Nature is a significant moment - it represents a new way of thinking about how to revitalise green spaces in our towns and cities and reverse the decline in biodiversity. Unlocking new funding from nature markets in this way should be a key priority for all local authorities looking to deliver for their communities and nature. It is exactly the type of project the UK Nature Impact Fund will facilitate across the country.”