BNG rules face rollback as Labour plans reforms to boost small-scale housebuilding amid backlashes

The Labour government is facing fierce criticism after confirming a review of environmental protections that compel developers to boost biodiversity on housing sites. The controversial move could ease key rules for smaller housing projects in England, raising alarms among conservationists and green campaigners.

At the heart of the storm is the Biodiversity Net Gain (BNG) requirement—a rule made mandatory in February under the 2021 Environment Act. It forces developers to deliver a 10% improvement in biodiversity when building new homes, ensuring habitats are left in better shape than before construction began. Now, the government is rethinking how it applies these rules to projects involving up to nine homes, citing cost pressures on small firms.

Housing Secretary and Deputy Prime Minister Angela Rayner said the changes are aimed at restoring balance to a planning system that has sidelined smaller builders since the 1980s. “For decades the status quo has failed them and it’s time to level the playing field,” she said. “We’re taking urgent action to make the system simpler, fairer and more cost-effective.”

Plans revealed ahead of a wider housing reform package include not only easing BNG rules for minor developments but also removing councilors from the approval process. Under the proposals, trained planning officers would take charge of approvals for smaller sites, bypassing local politicians entirely. In addition, sites with 10 to 49 homes may be exempted from a cladding remediation levy.

The reaction has been swift. The Conservative Party accused Labour of undermining democratic planning controls and disregarding environmental safeguards. Shadow local government secretary Kevin Hollinrake condemned the proposals, saying Rayner is “stripping councillors of the right to vote on local planning applications, concreting over green belt, and withdrawing support for first-time buyers.”

But ministers argue that reform is necessary to tackle England’s chronic housing shortage. Just over 30,000 housing projects were approved last year—a record low. With a target of building 1.5 million new homes by 2030, officials insist the system must change.

“Small firms used to deliver 40% of the country’s homes,” said a government spokesperson. “Today, they’re squeezed out by red tape and rising costs. If we want to build, we need them back in the game.”

The Home Builders Federation welcomed the review, calling BNG a “disproportionate burden” on small and medium-sized developers. Its chief executive, Neil Jefferson, stressed that the industry supports the principle of protecting nature but faces “emerging barriers” such as a shortage of trained ecologists and patchy local authority resources.

Yet conservation groups have reacted with fury. Richard Benwell, chief executive of Wildlife and Countryside Link, warned that exempting small sites would render the entire BNG framework ineffective. “Almost three-quarters of developments would face no requirement to compensate for nature loss—let alone enhance it,” he said. “These changes could leave the Biodiversity Net Gain system dead in the water.”

Labour insists no final decision has been made. A consultation on the BNG rules is now underway, alongside a £100 million loan scheme to support small housebuilders. Ministers say the review will consider how to balance the need for affordable housing with environmental responsibilities.

But as the debate intensifies, it’s clear the government is walking a tightrope. Any rollback on green rules risks alienating environmental voters and undermining Labour’s credibility on climate. Meanwhile, the housing crisis continues to deepen, with prices outpacing wages and new developments slowing to a crawl.

What’s at stake isn’t just bricks and mortar—it’s the future shape of the countryside, and whether economic growth must come at nature’s expense.