Snails and homes: has water neutrality now been solved?

The moratorium and water neutrality

In September 2021, Natural England issued a Position Statement stating that groundwater abstraction by Southern Water at Hardham (near Pulborough) may be harming internationally protected habitats in the Arun Valley and hence impacting adversely on the Special Protection Area, Special Area of Conservation and Ramsar wetland site. These sites support rare species, including the Lesser Whirlpool Ramshorn Snail.

The issue in the WRZ stems from the Habitats Regulations, which state that any plan or project (including housing or commercial development) that may affect internationally protected sites must undergo a Habitats Regulations Assessment (HRA). The ‘precautionary principle’, i.e. that further water abstraction at Hardham could not be ruled out as having an adverse effect, remained a high bar to overcome, and it had proved nearly impossible to do so for four years. 

The situation effectively put an immediate stop on the approval of planning applications for any new development that requires water in Horsham, most of Crawley and parts of Chichester and the South Downs – unless they demonstrated ‘water neutrality’. Natural England defined water neutrality as the total water use after development must be no greater than before. This has had major socio-economic impacts on the areas affected, including not being able to meet the government’s targets for new homes. Horsham District, who before the Position Statement had a strong housing supply position, is now only able to demonstrate a one-year housing land supply and has challenged the Inspector’s initial findings on its emerging local plan on the basis that water neutrality has hampered its ability to allocate more sites for housing.

Mitigation measures

Local planning authorities have sought to address the issue through applying Grampian planning conditions and formulating a mitigation scheme, which together require reduced water usage and introduces a tariff for developments in order to offset their water demand through local projects (called the Sussex North Water Certification Scheme (SNWCS)). However, this has taken time and ultimately the licences that allow water abstraction from the source (in this case at Hardham) are operated by Southern Water and controlled by the Environment Agency under their statutory duties for the provision of sustainable water supply under the Water Industries Act (WIA).

The WIA requires Southern Water to prepare a Water Resources Management Plan (WRMP), the latest being the WRMP 2024, which has to take water neutrality into account and abide by the Habitats Regulations. This is being informed by the Hardham Basin Environmental Study being undertaken by Southern Water and reviewed and verified by the Environment Agency. This study began in 2023 and seeks to establish whether there is a sustainable level of abstraction from the Hardham source without impacting on the protected sites or if abstraction should stop.  

In an appeal and subsequent legal challenge by Crest Nicholson, it was raised that by virtue of the fact that the WIA requires statutory undertakers responsible for water supply to operate under the Habitats Regulations and that the Hardham Basin Environmental Study would establish a sustainable level of abstraction (even if that were zero), that water neutrality should not be applicable to new development. The outcome of the environmental study has been delayed but is now imminent and it is understood that it is perhaps the results of the study that have provided the evidence that has now led to the government’s latest announcement. 

In the meantime, some developers have attempted strategies to prove water neutrality, which has included offsetting schemes (i.e. closing or adapting agricultural uses or re-using previously developed land, for example garden nurseries, or retrofitting existing housing stock). All has inevitably delayed projects and added unnecessary additional cost.

What happens now?

The government has said that 4,000 previously stalled homes can now proceed, and 17,000 additional homes “are unlocked”. It is now anticipated that:

• Southern Water will formally change its abstraction permits with the Environment Agency and fund habitat restoration, with “no cost to consumers” (it remains to be clarified whether there will be any cost or restriction to developers).
• New homes will be built to higher water efficiency standards to reduce environmental impact.
• Natural England will at least amend its Position Statement accordingly, before or by 1 November, and, once measures confirmed are in place, will cancel it entirely as the need for water neutrality will cease to be a requirement.
• Presumably the SNWCS will cease to be a requirement on new development. 

The housing needs in Crawley, Horsham and Chichester are considerable. The reaction of local authorities to this news will be hotly anticipated as Chichester’s Cabinet only agreed to formally launch SNWCS in September and Horsham was due to do the same shortly after.

Presumably, planning applications will no longer have to demonstrate water neutrality, rather demonstrate the required higher water efficiency standards. The reaction of the environmental lobby will also be of interest given the statement that had previously been put forward by Natural England regarding the implications of the Habitats Regulations.

The consequences will likely be felt for years, as the local authorities grapple with an anticipated increase in planning applications and development activity given the extent of pent-up demand and need in an area which has traditionally been a focus for growth and investment.

Further information

Contact Sarah Beuden or Charlie Collins