Labour's house-building plans for Sussex: Why water neutrality is one of the biggest barriers to new homes

While residents have consistently called for more affordable homes for local people and developers have said rules like water neutrality are making it increasingly difficult to build – poor roads, a lack of facilities like schools and doctors' surgeries, and a need to protect the county's spectacular environment and its wildlife will ignite a huge debate about the future of the county.

In a series of special reports, Sussex World senior reporter Sam Morton will examine the various arguments for and against 'concreting over the countryside.' In this feature, he looks at the challenge of water neutrality which has brought much development to a standstill.

In her first speech as Chancellor, Rachel Reeves has committed Labour to facilitating the building of 1.5 million homes across Britain during their first term in office but 'won't give the green light to all housing developments’.

Further announcements will be made in the coming weeks to ‘accelerate the development’ of housing and infrastructure – including launching a ‘landmark consultation’ on an updated, growth-focused National Planning Policy Framework with mandatory housing targets and a requirement to review greenbelt boundaries where necessary to meet them.

But the biggest block on development is not opposition from residents who are often unfairly dubbed as NIMBYs - but rules designed to protect the environment. Overcoming these will not be straightforward.

Developers say 'water neutrality' rules have effectively stopped any housebuilding in the county and a consortium of development companies say some are now facing financial hardship and are forecasting bankruptcy.

Estate agent, Marcel Hoad, based in the South Downs village of Storrington, is a spokesperson for the consortium – known as Houses for Homes. He said: “Those of us in the house building industry don’t decide on how many houses are needed or where they are needed. That is the job of the local council. What we do is find the land that is needed and then get on with building.

“Of course we fully recognise the need to save the countryside and the environment. Our buyers are always surprised at the lengths we go to make sure they will use as little power and as little water as possible. But, we do need more houses and the housing market relies on a steady supply of new houses to make headroom for people, young and old, to become house owners.

"To keep this wheel rolling, we normally build 2,000 houses a year in Sussex. In 2021 Natural England put an effective stop to the planning process by telling us the houses we build mustn’t increase the total amount of water used in the area. There hasn’t been planning approval for a single reasonably sized development in almost three years.”

Mr Hoad said this is ‘already causing difficulty’ for the small and medium sized local builders, who rely on a ‘steady flow of planning approvals’ so they can plan a steady workload.

He added: “The same thing applies to suppliers and we have already seen a local brickworks close down. This is only the beginning and we have yet to see its effect on the commercial side. New businesses will be put off coming here, new jobs won’t become available and what about new hospitals, doctor’s surgeries and other services. How will they cope?

“We always thought the water company had to plan to have all the water that was needed to meet demand, now and for future growth. But this appears not to be so. The latest edict says we will have to buy a water credit for each house and it seems grossly unfair that we will be paying twice for water.

“If the government wants to set some hard targets for housebuilding in north Sussex they will have to tackle Natural England and the way they have tackled what they see as damage to those lovely protected areas in the Arun Valley below Pulborough. Their argument is that taking more water will make matters worse.

“We want to know why Natural England didn’t use it’s powers to just tell Southern Water they mustn’t take more water out of the ground at Hardham

“Who told Natural England that it was essential to take more water out of the ground, when Southern managed to get through the hot, dry Summer of 2022 when it actually reduced how much it took out of the ground and they didn’t need a hose pipe ban?

“If Southern Water can offer water credits which show the water is available without causing further damage to the Arun Valley sites, then there is no reason for us to have to spend millions of pounds and although we will absorb as much of these additional costs as we can, it will inevitably increase the cost of a house.

“The water industry refuses to adopt that part of the EU Water Framework Directive that allows flows of river water into estuaries to be reduced.”

Mr Hoad said this would make available more water ‘than we will ever need’, at ‘very little cost’.

“In one fell swoop, the UK would be in a position to tell overseas investors that unlike our neighbours, there will be no water restrictions,” he continued.

"The water industry is in the throes of completing the next water resources management plans. Ofwat must stop the ridiculous proposal to use massive energy use schemes when all the water we need is simply being allowed to run out to sea.

“We do need additional houses and we need them now. If the government want to have a compulsory house building programme, as far as north West Sussex is concerned, Southern Water must tell the local councils that they have enough water without increasing the amount they take out of the ground at Hardham and the ban can be lifted.”

James Seymour, Natural England’s deputy director for Sussex and Kent, told Sussex World that housing and nature are ‘not competing interests’, adding: “Putting nature at the heart of places to live helps both people and wildlife thrive.

“We continue to work closely with the Environment Agency to help local authorities find a long-term solution in the Southern Water zone known as Sussex North.

“More broadly, we look forward to working with the new government and providing advice, based on clear evidence, on how it can achieve its ambitions and environmental targets through sustainable development.”

Southern Water said Horsham District Council has developed a scheme – on behalf of the councils in Sussex North. This was in response to Natural England's Water Neutrality Position Statement issued in late 2021, ‘which resulted in restrictions on new housing developments’.

A spokesperson for Southern Water added: “The council’s scheme will require developers to buy offsetting credits to neutralise the impact of their developments on the demand for water. We are working closely with the council, but this is not Southern Water's initiative.

"Our own Water Resource Management Plan sets out how we’ll create a resilient water future for customers in the water-stressed area of the South East and keep taps flowing during droughts. We’re currently revising our draft plan for the next 50 years."