November 2025

New development unlocked in Sussex following withdrawal by Natural England of water neutrality requirements

Natural England has withdrawn its 2021 position statement in respect of water neutrality, ending a four-year restriction on new development in the Sussex North Water Resource (Supply) Zone. Development in the region should now become significantly more streamlined.

Background

For the last four years, development across the sub-region south of Gatwick has been largely on hold after a 2021 position statement by Natural England flagged a potential risk of water abstraction at Hardham affecting the Arun Valley SAC, SPA and Ramsar. The concern was that an increase in water demand from new development could lead to increased abstraction and in turn adversely impact the protected designation’s qualifying features, including Little Whirlpool Ramshorn Snail Anisus vorticulus. To avoid the potential for harm to arise and to comply with the Habitats Regulations, all new schemes were required to demonstrate water neutrality, ensuring total water use did not increase. To enable new development, a strategic scheme has been in development by local authorities to improve the water efficiency of local housing stock, so as to provide headroom for new development. This has meant all development in the sub-region effectively remained on hold pending this scheme, delaying local plans and construction of thousands of new homes.

Change of Natural England’s position

To investigate whether the potential concern raised by Natural England in 2021 was justified, a Hardham Basin Environmental Study has been conducted by Southern Water to determine if the aquifer at Hardham, from which abstraction occurs, is linked to Arun Valley SAC. This study has now reported and has enabled Natural England to withdraw its position statement, subject to the following measures in the form of a reduced abstraction licence cap and a separate package of habitat recovery measures to support Pulborough Brooks SSSI (part of the SAC). Natural England highlight that the modification of the Hardham Groundwater abstraction licence is the primary element of interest to local authorities in making decisions as it ‘decouples the abstraction from new development’ and removes any connection between abstraction and growth.

Aspect Ecology’s evidence at public inquiry in 2024

The above solution largely mirrors evidence presented by Aspect Ecology at public inquiry on this matter in 2024, as previously reported in our news article. Aspect Ecology’s Senior Director Alistair Baxter set out that, in this case, the relevant regulator with responsibility for Habitat Regulations matters was in fact the Environment Agency (rather than Natural England). In this regard Alistair highlighted that the Environment Agency had already acted in 2021 to obtain an undertaking from Southern Water to minimise abstraction at Hardham (and water abstraction had been significantly reduced to a level well below the now amended licence level). Therefore, the link between abstraction and growth had already been ‘decoupled’ in 2021. It appears that in 2025 Natural England now concurs with Alistair’s evidence as to the effectiveness of the Environment Agency’s actions (now further secured by a licence amendment) and hence have modified their position statement.

The abstraction licence revision will be issued in 2026. In the meantime, Natural England and Horsham District Council further agree with Alistair’s evidence that Southern Water’s 2024/25 water efficiency savings provide sufficient headroom to allow new development to move forward as water neutral from 1 November 2025 without the need for water neutrality offsetting or associated Section 106 obligations. Furthermore, the previously scheduled Sussex North Water Certification Scheme (SNWCS), developed at a cost of least £250,000 of public funds, will no longer be launched as this is not required. Local authorities will continue to undertake Appropriate Assessments to ensure compliance with the Habitats Regulations until the new licence takes effect. Due to general water stress in the area, local authorities will also likely require new dwellings to comply with Building Regulations Part G Optional Technical Standard (currently 110 l/p/d).

Conclusion

These changes are anticipated to unlock around 4,000 stalled homes and 17,000 additional homes across the region. Planning authorities will now begin issuing decisions on delayed applications and processing updates to existing consents.

While water stress remains a challenge, this marks a major step forward in Sussex with strategic, sustainable water management, supporting both housing delivery and environmental protection.

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