Biodiversity Net Gain (BNG) has significant implications, and genuine opportunities, for landowners and organisations that occupy large areas of land over extended periods. For NHS bodies - whether acute hospital trusts, integrated care boards or community and mental health organisations - the instinctive response to a new planning obligation may be to focus on burden. That approach risks missing a considerable opportunity.

We have considered the basics of BNG in an NHS context here.

BNG requires at least a 10% uplift in biodiversity value over the pre-development baseline and is now a statutory requirement for most new planning permissions in England. That obligation can be met through: 

a. onsite habitat enhancement, 

b. offsite biodiversity units (which must be registered and allocated to a development/planning permission), and 

c. biodiversity credits.

For those with significant landholdings, this multi-pathway structure creates genuine flexibility: generate and sell offsite biodiversity units on the open market, or bank them against future development requirements.

This article considers:

Part 1: The commercial and reputational opportunity that using NHS estate land to create offsite biodiversity units presents; and

Part 2: The legal obligations, practical constraints, and long-term liabilities that must be understood before any commitment to the BNG market is made.

Part 1: The opportunity - a new revenue stream from land already in your estate

'Registered offsite biodiversity gain' is habitat enhancement carried out under a conservation covenant or planning obligation and registered on the biodiversity gain site register. A landowner who creates and legally secures such enhancements can sell or allocate the resulting units to developers needing to satisfy their own BNG obligations.

For NHS organisations, this creates a tangible opportunity. The NHS is one of the largest single landowners in England, managing hospital campuses, community health sites, car parks, access land, buffer zones and parcels of land that - through estate rationalisation, historic acquisition or changing service models - may no longer be required for immediate operational purposes. For operators with legacy landholdings or buffer zones outside the operational footprint, this creates a route to generating income from land that might otherwise represent only a management cost.

A biodiversity unit (habitat bank) created from NHS estate land could be allocated to:

• the NHS organisation's own development projects (reducing compliance costs across a capital programme); or
• third-party developers on the open market (generating income for the organisation).

Both uses can be pursued simultaneously, giving NHS bodies considerable flexibility in how they structure and deploy their biodiversity gain assets.

Why NHS organisations are particularly well placed

1. Scale

The NHS estate is extensive. NHS trusts manage approximately 25 million square metres of estate, including thousands of buildings across acute, community and specialist sites. Many organisations control land considerably beyond their immediate operational footprint - including car parks and surface areas, buffer zones, gardens and landscaped areas, and peripheral agricultural or amenity land - all of which may offer genuine ecological potential.

2. Estate rationalisation and the community shift

The direction of NHS policy - consolidating acute services on fewer, larger sites while expanding community-based care - is generating a significant volume of surplus and transitional land. Former hospital sites, closed community health facilities, redundant operational areas and land released by service reconfiguration all present opportunities for habitat enhancement. In many cases this land is neither in active use nor generating income; properly assessed and legally structured, it could generate biodiversity units for which there is active market demand.

3. Statutory environmental duties

NHS England, NHS trusts and NHS foundation trusts have a statutory duty to have regard to the Government's key ambitions on climate change and the natural environment in everything they do. This includes protecting and enhancing biodiversity across the estate. A registered biodiversity gain site provides a verifiable, publicly recorded mechanism for discharging that duty in a legally robust and measurable way.

4. The Greener NHS programme

The NHS's Greener NHS programme commits to net zero carbon across NHS operations by 2040 and across its supply chain by 2045, and the prospect of NHS bodies establishing BNG mini-banks is an idea well aligned with that agenda. Biodiversity net gain and carbon reduction are complementary rather than competing objectives: well-designed habitat schemes can deliver both, alongside co-benefits for local communities and patients.

5. ESG and 'nature-positive' credentials

A registered biodiversity gain site is a verifiable, legally secured commitment quantified by the statutory biodiversity metric - increasingly attractive to investors, lenders, and supply chain counterparties operating under their own ESG frameworks. For NHS bodies accountable for their sustainability performance to Integrated Care Systems, NHS England, the Department of Health and Social Care and the public, a habitat bank provides a tangible, auditable contribution.

Reducing the cost of your own compliance

NHS organisations with an ongoing capital programme (for example, new hospitals, diagnostic hubs, primary care facilities, community health infrastructure, estate refurbishment) will face BNG obligations across multiple projects. Operators with a continuing development programme can also use offsite biodiversity gain as an internal resource, banking biodiversity value from restoration or legacy land and allocating it against future BNG obligations, materially reducing compliance costs across a portfolio.

For an NHS trust or Integrated Care Board with a multi-year capital programme, establishing a habitat bank on suitable estate land at an early stage could significantly reduce the total cost of BNG compliance across that programme, by avoiding the need to purchase units on the open market for each individual project.

BNG as a material planning benefit

A genuine biodiversity gain that clearly exceeds the minimum 10%, and is properly distinguished from baseline planning obligations, can be a meaningful factor in tipping a finely balanced planning decision in an operator's favour. For NHS organisations promoting major development (for example, new hospitals, campus redevelopments or significant community infrastructure), a well-evidenced BNG strategy supported by an established habitat bank can strengthen the planning case and demonstrate commitment to the local natural environment.

Part 2: The legal obligations and liabilities of entering the BNG market as a supplier

The legal obligations that come with registering land as a biodiversity gain site are significant and long-lasting. NHS organisations should take expert legal advice before making any commitment.

The 30-year binding obligation

Habitat enhancement works must be managed and maintained for at least 30 years after completion, which is a statutory requirement. Land can only be registered as a biodiversity gain site if it is secured by a conservation covenant or a planning obligation (s106 agreement) and registered as a local land charge.

For NHS bodies, this 30-year horizon has particular implications. NHS land may be subject to future strategic review, estate rationalisation, reconfiguration or disposal. These obligations bind the landowner and their successors in title: a future sale will not relieve the commitment. Where NHS land is held on a lease - as is common across the health estate, particularly for community sites - the ability to satisfy a 30-year management obligation, and any tax implications, must be carefully considered before registration is contemplated.

NHS organisations should also consider how a 30-year BNG commitment interacts with NHS property governance, including the requirements for NHS Property Services, community health partnerships and other frameworks that govern the use and disposal of NHS land.

The registration process is a legal requirement

Registration is required before units can be allocated, and local planning authorities will verify this. Applications must include location and boundary information, habitat baseline data, enforceability details, and allocation information. Registration cannot be done informally or retrospectively, and specialist legal and ecological advice is essential both to achieve registration and throughout the 30-year management period. 

Not all sites are suitable: the ecological reality

Not every parcel of NHS estate will generate biodiversity units for which there is market demand, and entering the supply market without proper ecological assessment is a significant risk:

1. Baseline ecological value

Gain is calculated as uplift over the pre-enhancement baseline. High-condition land leaves less room for saleable improvement; low-condition land offers greater potential, provided genuine enhancement is achievable and the resulting habitat type has market demand. Some NHS estate land may already carry relatively high ecological value - for example, mature landscaped hospital grounds - which could limit the room for saleable gain.

2. Habitat type and market demand

Units are calculated by reference to habitat type, and buyers frequently require specific types aligned with local nature recovery priorities. Management costs vary considerably, and can be substantial, depending on the habitat created, and must be modelled carefully before entering binding commitments.

3. Physical and operational constraints

Former NHS sites may carry contamination or infrastructure constraints that interact with BNG maintenance requirements. Where NHS land is co-located with operational healthcare facilities, access, biosecurity and public health considerations must be factored into any habitat management plan. Rules about additionality must be very carefully considered.

4. Long-term management capability

A credible, properly funded management, monitoring and maintenance plan for 30-plus years is essential. Full-lifecycle costs must be modelled realistically before any commitment is made. NHS organisations should consider whether they have in-house capability to manage habitat enhancement land over the long term, or whether specialist management agreements with third parties will be required.

Practical recommendations

1. Commission ecological surveys early. Pre-development biodiversity value is the foundation of both BNG compliance and any commercial assessment and confirms whether a BNG habitat bank is ecologically viable.
2. Take a strategic view of your wider landholding. Identify restoration and post-operational areas with unit-generating potential before making any commitments. For NHS organisations, this should be approached as part of the wider estate strategy rather than on a site-by-site basis.
3. Take specialist legal advice before registering any land. The 30-year obligation, conservation covenant mechanics, registration requirements, and interactions with planning conditions, environmental permits and site licences are all complex and affect future land use and value.
4. Distinguish BNG benefits from pre-existing obligations. Additionality rules require clarity on whether restoration is required by existing conditions or constitutes genuine additional gain.
5. Model the commercial case with full-lifecycle costs. Income from biodiversity units must be weighed against ecological surveys, legal documentation, and 30-plus years of management and monitoring. The case can be compelling, but only if costed realistically.
6. Consider NHS governance and land-use frameworks. Any BNG commitment on NHS land must be considered alongside NHS property governance requirements, including relevant consents, NHS Property Services arrangements and ICB oversight of major estate decisions

Conclusion

BNG is a genuine strategic opportunity for land-intensive organisations: for operators with significant landholdings, particularly those with restoration obligations or legacy post-operational land, it offers a structured route to generating income, reducing compliance costs, and building a verifiable nature-positive narrative. For NHS organisations, these possibilities are augmented by the NHS's statutory environmental duties, the Greener NHS programme, and the direction of travel on estate rationalisation and the shift to community-based healthcare.

The legal obligations are substantial, the ecological suitability of individual sites varies widely, and the 30-year commitment demands specialist legal and ecological advice before any step is taken.

We provide expert BNG advice to landowners, developers and local authorities, and have extensive experience in relation to the setting up of BNG habitat banks and negotiating of conservation covenants. We work closely with NHS and health-sector clients, and are well placed to advise on how BNG can be integrated into your capital programme and NHS estate strategy.

If you have any queries, please do let us know.

This article is intended as general information and does not constitute legal advice. Specific advice should be sought in relation to particular circumstances.