Source · Select Committees · Environmental Audit Committee
Recommendation 32
32
Not Addressed
Prevent blanket exemptions for small sites and defer substantial BNG policy changes for three years.
Recommendation
While the Government has completed its consultation on new exemptions to BNG, additional exemptions must not undermine the effectiveness of the policy, ecosystem integrity, or the establishment of the BNG credit market. Entire exemptions from BNG for small sites would undermine the policy. The Government should not exempt all small sites, but consider minor alterations, to ensure that the effectiveness of the policy is maintained. We reiterate our recommendation in paragraph 124 of our report on The Role of Natural Capital in the UK’s Green Economy. The Government should wait at least three years before making any substantial changes to BNG, as this could be viewed as a watering down of ambition. (Recommendation, Paragraph 116)
Government Response Summary
The government's response focuses on the NPPF, VAT on renovations, and tackling empty homes, and does not address the recommendation regarding BNG exemptions for small sites or the timing of policy changes.
Government Response
Not Addressed
HM Government
Not Addressed
95. As set out in our response to recommendation 29, On 16 December 2025 Government published a consultation on a new NPPF which included a proposed requirement for development proposals to take advantage of opportunities to re-use existing structures and materials. 96. The Government recognises the importance of reusing existing buildings and already encourages this through the VAT system. That is why residential renovations are subject to a reduced rate of VAT of 5 per cent if they meet certain conditions, including conversions of buildings from one residential use to another, conversions from commercial to residential use, and the renovation of properties that have been empty for two or more years. 97. VAT is a broad-based tax on consumption, and the 20 per cent standard rate applies to most goods and services. VAT is the UK’s third largest tax, forecast to raise £180 billion in 2025/26. Tax breaks reduce the revenue available for vital public services. Any reduction in VAT rates must represent value for money for the taxpayer. Exceptions to the standard rate have always been limited and balanced against affordability considerations. Ultimately, the Chancellor is responsible for making decisions on tax policy, and these decisions are taken at fiscal events. 98. Local authorities have been given powers and incentives to tackle empty homes, including discretionary powers to charge council tax premiums alongside the use of formal enforcement levers such as Compulsory Purchase Orders to take ownership of a property, and Empty Dwelling Management Orders to take over management of a property for up to 7 years. 99. Delivery against housing targets is taken from the official Net Additional Dwellings statistic published annually. Vacant dwellings returning to use are not counted in this statistic as they would have been counted as a net additional dwelling in a previous year. Skills and Resourcing