Case Studies

Network Rail (NR), and their principal contractor Buckingham Group Contracting, are building a new Mersey Travel train station and car park sites at Headbolt Lane in Kirkby. NR have internal biodiversity targets so they decided to achieve BNG at this site to help meet these targets and provide Net Positive Biodiversity gain for this project. They commissioned Mersey Rivers Trust (MRT) to scope interventions to reclaim the biodiversity credits associated with the construction of the new station (the project was estimated to be in biodiversity deficit of 23 units) and deliver other environmental, social and economic benefits to the local area. The project is the first of its kind in the area to use the BNG metric and is piloting the methodology of how BNG may work in the future and what the challenges are to implement BNG. This project was started two years ago and is due to complete in March 2024.

Identify and prioritise interventions

A desktop study helped MRT to identify locations close to the new development which could benefit from habitat improvement works. Site walkovers were then undertaken to ground-truth and identify specific interventions. All of the land was owned by the local authority so early engagement work was straightforward and quickly carried out.

MRT selected local authority owned public parks for ease of access (initial walkovers, surveys and delivery work) and ease of permissions (they knew who owns the land, who to contact and they already have good relations with them).

Complete biodiversity calculations

Baseline habitat surveys (UKHab) were completed at each of the six chosen sites and biodiversity credits calculated using the latest version of the DEFRA 3.1 metric. MRT found it helpful working with MEAS at this stage.

MRT found it difficult to find the required biodiversity units when creating new habitats as you are both losing and gaining units, e.g. turning grassland (loss) into a wetland (gain). They decided that it was better to enhance existing habitats, i.e. enhancing and managing the existing ponds was better than creating a new wetland.

Feasibility and surveys

Early discussions with the landowner and other key stakeholders was important to ensure that the project would be feasible. Relevant permits, permissions and agreements were produced (they engaged with EA, United Utilities, NE and local authorities to determine what they needed) and surveys undertaken, including ecology (water vole, great-crested newt, bats, etc), utilities, unexploded ordnance and contaminated land.

MRT found that it is important to survey for key species and do any ground-truthing at the earliest stage possible. Also you need to consider the impacts of your works on the existing ecology – contact the local record centre for data.

Designs

Basic sketches produced by MRT staff were turned into full designs by a specialist consultancy. The designs could then be handed over to a contractor to aid delivery. The design includes a drawing plus documentation around project risks to both people and the environment.

Wider stakeholder engagement

The landowner, Knowsley Council, were involved from the offset. Other stakeholders were then engaged at every step of the process but this was an opportunity to share the full designs with the landowner and members of the public. Community consultations were held as a chance for local residents to learn more about the project and ask questions. In the parks, MRT carried out public engagement activities, drop-in sessions, face-to-face chats but they didn’t engage with the local press nor social media.

Note: Steps 4 and 5 should be carried out simultaneously to allow stakeholders to influence the final design and it helps to have an outline plan to show stakeholders.

Delivery of interventions

A series of interventions are being delivered at 6 parks across Kirkby, including wetlands, ponds, hedges, wildflower meadows and river restoration. All 23 biodiversity units will be delivered within 2.5km of the new station.

Note: The new Headbolt Lane Station is just northwest of Mercer's Dell.

To find enough biodiversity units MRT found it was better to enhance existing habitats than creating new ones.
Ground-truthing the areas was very beneficial. MRT advise that you don’t simply rely on google maps, etc. instead walk the site and carry out detailed surveys and habitat assessments
Species surveys can take a year, or at least a season, so if you think you might want to develop a project then start surveying as soon as possible either with staff or trained volunteers.
Get your timings right – think about timescales and various seasons, e.g. surveying seasons, breeding/spawning seasons, landowner activities and when the land is suitable and available for work to be carried out on it.
Get initial funding for feasibility studies (covering ecology, pipes, water voles, etc, each study cost MRT ~£10K) and stakeholder engagement.
When planning a project do a rough sketch, then ground-truthing surveys, then feasibility and then design. MRT found that an apparently unsuitable area had a thriving water vole population and this threw their initial plans!
Generally a big problem for MRT, and most environmental organisations, is the lack of development finance – the funding to help develop projects and investible propositions.

The Wyre Catchment Natural Flood Management Project is being led by the Rivers Trust, the Wyre Rivers Trust, Triodos Bank UK, the Environment Agency, United Utilities, Flood Re, Co-Op Insurance and the Esmée Fairbairn Foundation. The River Wyre is a 28-mile long river which originates in the Forest of Bowland in North Lancashire and flows down into the Irish Sea at Fleetwood, near Blackpool.

The project will deliver more than 1,000 targeted measures to store, slow and intercept flood water and prevent peak flow in the River Wyre catchment. It is utilising nature-based solutions to reduce flood risk in the river catchment, using a blend of public and private finance. Beneficiaries of the reduced flood risk are paying for these interventions, and the Project’s Community Interest Company (CIC) has successfully raised a nine-year £850k private loan facility to help fund the interventions.

The scheme covers over 70 ha, spread across more than 10 land holdings. It includes 39 hectares of woodland creation, 10 km of new bunded hedgerows, 42 ponds and scrapes and 1,710 leaky dams (holding back water in small water courses). Note: Many of these measures to slow the flow of water would be applicable in a catchment such as the River Alt. Property-level (fine scale) hydrological modelling would be able to identify what measures would deliver certain levels of risk reduction.

The cost of establishing the Wyre scheme (planting, dam creation, etc) is approximately £1.5 million of up-front capital expenditure, and £50,000 a year in running costs, including land manager payments and maintenance costs of the interventions. This has been financed through a mix of public and private sector funding. This included a £850k nine year commercial loan from Triodos Bank UK, where nine investors were involved in the provision of the finance. This repayable finance was secured alongside £627.5k of woodland and hedgerow planting grant funding from the Woodland Trust. The loan and annual management costs will be financed through income from a variety of outcome sources, including payments for improvements in water quality.

Multiple stakeholders are engaged in the transaction structure of this Project:

The land managers are predominantly farmers and they are responsible for delivering and maintaining the nature-based interventions that help to reduce flood risk. Their arrangements cover a nine-year period, with the potential to extend for up to 50 years. The land managers receive an annual payment for their interventions, with the potential for additional payments if certain biodiversity targets are achieved.

To cover the substantial project costs, the project team identified buyers/beneficiaries who would be willing to pay for the ecosystem services that these interventions generate. The five buyers identified were Flood Re, United Utilities, the Environment Agency, Wyre Council and the Northwest Regional Flood and Coastal Committee. From the project outset, these beneficiaries/buyers pay an annual project fee to cover the lease payments to land managers. This payment is conditional on the implementation/maintenance of agreed interventions. From year six, the buyers will pay outcomes-based payments when the performance data, gathered by the Wyre Rivers Trust, verifies the delivery of the ecosystem services.

Natural flood management is the primary ecosystem service being delivered to these buyers. However, the interventions will also deliver other benefits, such as carbon sequestration from woodland planting, water quality improvements from reduced nutrient run-off, and biodiversity improvements from the planting of woodlands and grasslands.

The Special Purpose Vehicle (SPV) – The project required a legal structure that had independence and removed risk from the Rivers Trust and Wyre Rivers Trust. So they established a not-for-profit Special Purpose Vehicle (SPV), The Wyre Catchment Community Interest Company (CIC). This acts as the legal entity through which capital flows for the Wyre NFM Project – including the aggregation of payments across buyers.

There is considerable information on this project available online:

Link to a detailed case study on the Green Finance Insitute (GFI) website - The Wyre Catchment Natural Flood Management Project (greenfinanceinstitute.co.uk)
This online webinar presentation, hosted by the GFI, goes into more detail on how the project team reached a stage of investment readiness - Public Webinar: Showcase of the Wyre River Natural Flood Management Project (greenfinanceinstitute.co.uk)
Investing in nature: Wyre catchment project | The Rivers Trust
The Wyre Catchment Natural Flood Management Project (greenfinanceinstitute.co.uk)

Surrey Wildlife Trust (SWT), in partnership with Finance Earth, explored setting up a subsidiary Natural Capital Investment Company (NCIC) to attract private investment from developers to accelerate habitat restoration and nature recovery. The NCIC will sell biodiversity units to developers using land and habitat banking approaches initially on land owned by the SWT. The NCIC will create habitat bank Special Purpose Vehicles (SPVs) to aggregate environmental project.

Source: Science Search (defra.gov.uk) NEIRF case study – Surrey Wildlife trust