UK Government has “Catastrophic” Approach to Nature: David Hill

British government proposals to exempt small housebuilders from Biodiversity Net Gain risk unraveling the system, its long-time leading proponent professor David Hill has told OPIS.

“If the exemptions [proposed by a U.K. government consultation] go through, I would predict that it will unravel BNG and it will just come to an end, which would be catastrophic, not least because the rest of the world’s been looking at what we’re doing and they’re trying to implement [BNG]”, said Hill.

Hill, a pioneer in the nature finance space and founder of Environment Bank, made the comments in an interview with OPIS earlier this month.

Environment Bank is England’s largest provider of BNG Habitat Banks—areas of land where new or enhanced habitats are created to boost biodiversity and generate biodiversity units that meet the requirements of developers subject to the new law.

BNG became mandatory in the U.K. in early 2024. The policy requires housing developers to improve nature by at least 10% either inside or outside of their developments. As a last resort, developers can purchase statutory BNG credits from the government.

The system was enacted by the Conservative-led British government. Just over a year later, in May 2025, the current Labour government launched a consultation that is considering reducing BNG requirements for small- and medium-sized developers. The developments that could be subject to the revision include small residential and commercial schemes, small agricultural buildings, and small energy infrastructure or retail developments, according to the consultation.

“[The change of Government has] been a major, major catastrophe [for BNG implementation],” said Hill. “If you put an exemption in place in a market such as residential housing [or] development and it’s for small scale schemes, [then] the larger housing developers are going to say, ‘hang on a minute, you just manipulated the market, now we can’t compete with these small operators, so you’re going to need to reduce or remove BNG from us as well’. We know that the developers are already lined up to do that,” he suggested.

“It’s definitely creating a two-tier system and also it will destroy any market, because if you’re only going to do it with the big developments—[which] are relatively few and far between, even though we might think they’re developing everywhere – that means that there’ll be far less demand for off-site BNG areas,” he continued.

“So you’ll end up with hundreds of millions of pounds of stranded assets, meaning people [are] putting money into land restoration, nature restoration that can’t actually sell their units because they’re too far away from a development or there is just too much supply,” the Environment Bank founder said.

The consultation, which closed on July 24, has also attracted strong criticism from environmental charities and businesses concerned about the effect a relaxation of BNG could have on nature restoration and financial investment.

Earlier this month U.K. environmental charity the Wildlife Trusts published an open letter addressed to British prime minister Sir Keir Starmer calling for the protection of Biodiversity Net Gain. The signatories also included leaders from major environmental charities, habitat banks and financial institutions, including Triodos Bank, Knight Frank and Schroders Wealth Management.

The signatories said that “our collective voice sends a clear message: weakening BNG would come at a high cost, setting back this fast-developing economy and more widely threatening business confidence in nature policy.”

Nature Restoration Fund as an “Alternative Approach”

The government has proposed a Nature Restoration Fund as part of its Planning and Infrastructure Bill, which it argues will couple the building of 1.5 million houses across the country over the next five years with nature protection.

The proposed legislation would provide “an alternative approach” for developers, who will simply contribute to the Nature Restoration Fund and forgo their own environmental impact assessments, according to the government. Natural England, a non-departmental body under the umbrella of the Department for Environment, Food and Rural Affairs (Defra), would then be tasked with developing it.

Professor Hill, who was previously a founding board member and deputy chair of Natural England, told OPIS: “I think the Nature Restoration Fund is a totally ridiculous idea, which will fail. [It will] suck out any private sector nature finance, so we’ll be back down to giving grants to people. The developers won’t pay over a levy.”

“There’s evidence worldwide that levies don’t work…the Planning and Infrastructure Bill says that if the developer considers that the levy could impact on the viability of the development, then the developer doesn’t have to pay or pays at a much reduced level. Well, that’s a car crash because having worked for 30-odd years in the development sector, I can guarantee their first position statement will be, ‘Oh, this is going to cost us too much. We can’t afford it, so we’ll give you this instead or not at all’.”

“What they [the U.K. government] need to do is to leave BNG entirely as a market-led policy, as it was always designed to be, and leave protected species compliance – which could be expanded into a whole range of other species – to the private sector to deal with. There’s no point in the government getting bogged down in this because they’ll fail.”

The government announced that the Nature Restoration Fund will work in practice through Environmental Delivery Plans (EDP)—step‑by‑step action plans, tailored to either a single project or a group of developments to make sure that biodiversity is not just protected but actually improved, it claims.

“Not one of those EDPs has created anything of material value for biodiversity,” Hill suggested. “So I have no faith whatsoever that an EDP will be actually written, let alone work… This will come to bite the government when they fail – which they will. When they fail, there will be all hell let loose for why have they wrecked the natural capital nature markets.”

“I think what’s been embarrassing is the fact that the Environment Bank for example, and I personally, and others, have been trying to meet [government] ministers and the secretaries of state. They don’t want to know. They don’t want to listen. It’s the [deputy prime minister] Angela Rayner road show, and frankly, the level of ignorance is beyond measure, because they have no idea about the environment, no idea about farming, no idea about how nature markets can actually transform [us to] where we need to be,” Hill told OPIS.

Earlier this month, the Foundation for Nature, a non-profit Community Interest Company founded by Hill, launched a report analyzing the comparative value of on-site versus off-site BNG for restoring nature.

Professor Hill added: “On-site BNG is an utter waste of time and money… We did a cost viability model and we worked out that a BNG unit delivered on-site of an average residential site costs around £896,000, whereas you can deliver the same thing off-site in a big habitat bank for £28,000. But has anybody in government looked at that? Absolutely not. And it’s utterly shocking really.”