AC-2024-LON-004013 - [2025] EWHC 2194 (Admin)

Under Ground 1, the Claimant submitted that the First Defendant proceeded on the basis that, although Southern Water’s WRMP 24 for the supply of water was itself subject to regulation 63 of the Habitats Regulations, the WRMP 24 might nonetheless continue groundwater abstraction at Hardham at a level that could not be excluded from resulting in harm to protected habitats, by reliance on IROPI under regulation 64(1) of the Habitats Regulations.

The Claimant submitted that finding was erroneous in law and/or irrational. Under regulation 64(1) of the Habitats Regulations, IROPI was only available if the competent authority is satisfied that there are no “alternative solutions” to carrying out the project, notwithstanding a negative assessment of the implications for the protected site. Here, the Inspector found, at IR/10.89, there was “some capacity in supply that the Secretary of State can take confidence in should groundwater abstraction at Hardham need to cease in the future”. That finding was sufficient to rule out any prospect of IROPI, regardless of the Inspector’s lack of certainty as to which solutions might be deployed, or when they might be deployed.

Furthermore, the amount of groundwater that can be abstracted at Hardham is governed by the terms of the abstraction licence granted by the EA, not by WRMP 2024. Southern Water’s actual operation will be bound by the outcome of the EA’s Sustainability Study. There is no scope for the WRMP 24 to rely upon IROPI to depart from that. (I observe here that the Sustainability Study is being produced by Southern Water, at the request of the EA, not by the EA itself).

Put another way, the First Defendant could not rationally conclude that no alternatives to the cessation of groundwater abstraction at Hardham existed. Therefore it was not open to the Inspector to approach the WRMP on the basis that IROPI was a possibility.

The Inspector correctly directed himself in law on regulation 64 of the Habitats Regulations and the IROPI test, at IR/10.9 – 10.11:

“10.9

Two overarching legal points of relevance to the Secretary State’s decision making relate to imperative reasons of overriding public interest (IROPI) and the precautionary principle and the question of proportionality. As both are questions of law, my view is based on the submissions made by the parties.

10.10

The duty under Regulation 63(5) of the Habitats Regulations is subject to Regulation 64, which makes provision for a project to be agreed notwithstanding a negative assessment of the implications for the European Site if the competent authority is satisfied that, there being no alternative solutions, the plan or project must be carried out for imperative reasons of overriding public interest. The legal tests relating to this is referred to as ‘IROPI’ and are as follows:

• There are no feasible alternative solutions that would be less damaging or avoid damage to the site,

• The proposal needs to be carried out for imperative reasons of overriding public interest, and

• The necessary compensatory measures can be secured. (Footnote: ¹)

10.11

The Appellant’s position on IROPI is that it is not applicable as it only applies in the absence of alternatives [7.16]. Paying regard to the reasons given by the Secretary of State for calling in the appeal [1.7] it is relevant that IROPI offers a route within the Habitats Regulations to balance a negative assessment of effects on the Arun Valley Sites against other factors, which may in principle include housing demand and supply. However, as the substantive evidence does not make the case and there appears to be feasible alternative solutions if conditions are used as suggested below, I would not recommend that the Secretary of State reaches a decision on the basis that IROPI applies.”

It is apparent from IR/10.11 that the Inspector understood that the Claimant’s position on regulation 64 of the Habitats Regulations and IROPI was that it did not apply to the planning application for reserved matters approval because there were alternative solutions. The Inspector had correctly set out the Claimant’s position earlier in the Report, at IR/7.17.

Also in IR/10.11, the Inspector made a clear recommendation to the First Defendant that she should not apply IROPI when making her decision on the application for reserved matters approval because (1) the substantive evidence did not make the case for IROPI, and (2) there appeared to be “feasible alternative solutions” if conditions were used (e.g. Condition 6).

At DL/14, the First Defendant agreed with the Inspector’s approach on IROPI, as set out at IR/10 – 11. Thus, the appeal on the reserved matters approval was not decided on the basis of IROPI.

Ground 1 relates to IROPI in respect of the WRMP 2024 under preparation by Southern Water. The challenge is based on IR/10.64 which stated:

“10.64

The Appellant is incorrect to say that the WRMP 2024 could not be published if it included an unfavourable appropriate assessment [7.67, 7.69]. Regulation 64 of the Habitats Regulations and the associated IROPI tests provide a legislative route to do just that and whether any such decision would be made in response to evidence that, is at present, is unknown [8.23].”

The Inspector cross-referred to the Claimant’s submissions which were summarised at IR/7.67 and IR/7.69, and to the Council’s response at 8.23:

“8.23

It is also relevant that the competent authority (which for the WRMP will be Southern Water) may nevertheless approve a plan which fails the appropriate assessment. The process allows for exceptions, if three legal tests are met that are abbreviated to IROPI. That is another reason why the legal basis of the Appellant’s contention that WRMP 2024 must necessarily be ‘zero Hardham’ is wrong.”

The Inspector’s conclusion at IR/10.64 has to be read in the context of the Inspector’s analysis of the WRMP 2024, set out as follows:

“The WRMP 2024 [7.63-7.70, 8.32-8.46]

10.58

For information, an uncontested description of the preparation and function of WRMPs is described in the proof of evidence of the Appellant’s water supply witness. The overarching objective of the WRMP is to look ahead over 25 years and describe how the water company aims to secure a sustainable supply/demand balance. The Government’s Water Resources Planning Guideline [CD8 1.08] assists companies with preparing WRMPs and, at paragraph 6.3, says that water demand growth projections should be based on those in local plans and the resulting supply must not constrain planned growth [7.17,7.18].

10.59

When the final version is published, the WRMP 2024 would be a statutory plan and must, therefore, be accompanied by its own HRA. As things presently stand the WRMP 2024 and it's HRA are in draft form. The Statement of Responses [CD8 1.04] indicates a range of relevant information and new material that would need to be considered ahead of finalising either document. The likelihood of changes being made brings into question the validity of the draft WRMP 2024 and it’s HRA as a basis for present decision making. The specific details of the documents themselves do not, therefore, provide a credible basis on which to reach a conclusion about reasonable certainty.

10.60

A reasonable planning system parallel to this situation would [sic] an HRA prepared for a Local Plan being used to support a development management decision. Paragraph 008 of the PPG provides some relevant advice [8.22] including reminding decision makers that the HRA would still need to contain complete, precise and definitive findings and conclusions capable of removing all reasonable scientific doubt on the impact of the project. This is a high standard to meet and will need to be assessed on a case by case basis.

10.61

Although not a direct comparison, the guidance helps to support a view that measures in a WRMP are capable in principle of being avoidance/mitigation measures that confirm an absence of likely adverse effects on a European Site. However, the draft stage at which the WMRP 2024 has reached in this case leads me to conclude there is an absence of reasonable certainty. In this respect, I agree with the Council’s view that a positive appropriate assessment at the WRMP level does not mean that projects under that plan can be assumed to have no significant adverse effects.

10.62

In a more general sense, the Secretary of State can expect that the relevant bodies will comply with their duties under the Habitats Regulations when the WRMP 2024 is finally published. This includes carrying out any appropriate assessment of likely adverse effects on the Arun Valley Sites necessary to meet the Regulation 63(5) duty.

10.63

The Appellant’s working assumption that the WRMP 2024 is likely to be published ahead of the Sustainability Review reporting is a fair one, in the absence of evidence to the contrary [7.68]. The Council questions the degree to which the draft WRMP 2024 plans for a ‘zero Hardham’ baseline [8.39-8.46]. While the evidence doesn’t support a firm view that the current draft of the WRMP 2024 does, there is reasonable evidence that water supply scenarios informing the WRMP will need to contemplate excluding ground water extraction from Hardham [7.69]. However, concluding on the specifics would be speculation. Possible reasons for the WRMP 2024 needing to adopt zero Hardham include (1) that the Environment Agency revokes the abstraction licence in response to the Sustainability Review or (2) a favourable appropriate assessment of the WRMP 2024 cannot otherwise be conclude [sic] and an IROPI argument is not, or cannot, be made.

10.64

The Appellant is incorrect to say that the WRMP 2024 could not be published if it included an unfavourable appropriate assessment [7.67, 7.69]. Regulation 64 of the Habitats Regulations and the associated IROPI tests provide a legislative route to do just that and whether any such decision would be made in response to evidence that, is at present, is unknown [8.23].

10.65

The Council’s questioning of whether the WRMP 2024 could, in practice, adopt a zero Hardham baseline based primarily on Southern Water’s available water supply in times of drought does not particularly assist [8.32-8.36]. It comes largely from a disagreement between the parties around how ably water supply coped in response to the 2022 drought [7.79, 8.32-8.36]. For reasons that include the lack of certainty about demand management measures and the availability of alternative sources (discussed below) there isn’t the evidence to conclude on this point one way or another.

10.66

Overall, there is not the certainty in the draft WRMP 2024 or its accompanying HRA to conclude that any of the specific measures within it provide reasonable certainty of no adverse effects on the integrity of the Arun Valley Sites will result from the proposal. Other bodies can be expected fulfil their legal obligations under the Habitats Regulations. This includes Southern Water concluding any necessary favourable appropriate assessment, unless IRPOI applies. However, as the question of ‘how’ and ‘when’ lacks reasonable certainty.

10.67

The Appellant answers a firm ‘no’ to their own question of ‘whether supply sources in the WRMP 2024 include groundwater abstraction at Hardham, at levels that cannot be excluded from the potential of harm to the integrity of the protected site’ [7.63]. For the reasons set out above a response of ‘we don’t know’ is a more accurate answer. I recommend that the Secretary of State takes the same view based on the available evidence.

10.68

In these circumstances the Secretary of State is being asked to do little more than rely on the unspecified future action of parties fulfilling responsibilities under the Habitats Regulations under other regulatory regimes, including the assumption that any necessary favourable HRA must come forward. The Secretary of State is entitled to assume that other regimes will operative effectively. However, without more detail of what will happen and when, in this case it does not provide evidence of reasonable certainty that can be relied upon to confirm that no adverse effects on the integrity of the Arun Valley Sites will result from the proposal.

10.69

It is the Appellant’s case that addition [sic] water demand (including form [sic] the proposal) can be met by a combination of greater utilisation of other sources of supply and/or demand management measures [7.65]. Neither of these are secured mitigation measures for the proposal. Instead, they support the Appellant’s case that the Secretary of State can rely on other regulatory regimes to avoid/mitigate the likely adverse effects on the Arun Valley Sites and have confidence that supply side options for doing so can be utilised without the need for water neutrality. The merits of both are discussed below.”

The Inspector went on to find, in his “Conclusions”:

“10.87

The draft WRMP 2024 and the accompanying HRA are subject to change and do not, of themselves provide reasonable certainty of avoidance/mitigation measures. This leaves the Secretary of State relying on the generality of the WRMP process itself and the fact that the WRMP 2024 would either need to conclude a favourable appropriate assessment or make an IROPI case. There is little certainty here, nor about whether the detail, coverage, and spatial scale of the WRMP 2024 could be used as an appropriate basis for decision making on the proposal.

10.88

The evidence does not, with reasonable certainty, support the Appellant’s case that Southern Water’s WRMP 2019 demand management savings provide reliable evidence that additional water demand arising from development can be appropriately met from this source and the claim that the Part C Report confirms the existence of headroom that the proposal can fairly utilise is without merit.

10.89

The question of availability of alternative sources of supply is a complex one, due primarily to fluid nature of contractual arrangements between water companies and the lack of public transparency on the terms of such arrangements. The evidence does not allow a specific source of alternative supply to be identified, nor is there a need for there to be one. However it does, in general, point towards some capacity in supply that the Secretary of State can take confidence in should groundwater abstraction at Hardham need to cease in the future.

10.90

In conclusion, based on the evidence provided, taken separately or as a whole the Appellant’s evidence of avoidance/mitigation does not lead me [sic] conclude that it can be ascertained (with reasonable certainty) that the proposal will not adversely affect the integrity of the Arun Valley Sites.”

In my judgment, there is no basis in these passages of the Report to suggest that the Inspector misdirected himself on regulation 64 of the Habitats Regulations and the IROPI test, having earlier set out the provisions correctly at IR/10.10. An expert decision-maker can be taken to be familiar with the relevant statutory framework and legal principles, in the absence of a “sufficient positive contra-indication” per Holgate J. at [48] in R (Keir) v Natural England [2021] EWHC 2021 (Admin), applying the principle enunciated by Sales LJ in Jones v Mordue [2016] 1 WLR 2682, at [28].

In my view, IR/10.64 is a correct statement of the law. The Claimant’s objection to it was, essentially, that it did not rule out IROPI on the basis that there were “alternative solutions”. However, as the Report demonstrates, the Inspector’s judgment was that the evidence was insufficiently certain to determine whether or not IROPI could apply. The second half of the final sentence in IR/10.64 references the uncertainty, where it states: “whether any such decision would be made in response to evidence that, is at present, is unknown”. See also IR/10.87 and IR/10.88 (at paragraph 75 above).

The Claimant submitted that the Inspector’s finding at IR/10.89 that there was some “capacity in supply” was sufficient to rule out IROPI. However, in the same paragraph the Inspector expressly found that the “evidence does not allow a specific source of alternative supply to be identified”.

Earlier in the Report the Inspector examined the evidence relating to alternative sources and concluded that they were uncertain:

“10.72

How the additional supply from Weir Wood would be used is a different matter. The Statement of Responses references Southern Water’s ‘current pressures from the treatment works outage at Weir Wood’, which is also acknowledged by the Appellant’s witness on Water Supply. There is also evidence of ongoing issues with the Littlehampton Water Treatment Works [8.56-8.58]. As such, the degree to which additional supply from Weir Wood is needed to address existing pressures, rather than serve new growth, is unclear. As is the nature of any contractual agreement with other water companies to export water elsewhere [8.56]. For these reasons, although on the face of it Weir Wood is capable of making up for a loss of supply resulting from cessation of groundwater extraction at Hardham, there is not reasonable certainty in the evidence provided that would be the outcome.

….

10.74

The bulk supply agreements between Southern Water and Portsmouth Water and SES Water respectively are subject to commercial contracts that are not before the Inquiry or otherwise in the public domain. The Council takes issue with the availability of the supplies [8.48-8.53]. In my view the lack of reasonable certainty comes more fundamentally from the absence of transparency around the terms of the contracts. As such, while they may in theory provide supply capable of making up for a cessation of groundwater extraction at Hardham, reasonable certainty of supply in practice cannot be concluded upon.

10.75

In summary, there are alternatives to serving new development other than from additional groundwater abstraction at Hardham. The Secretary of State should give some weight to the options as potentially available alternatives if a decision is taken in the future to cease groundwater abstraction at Hardham. However, the need for them being theoretical and questionable evidence that their availability is secured, places limits on the weight that can be attached.”

The Inspector also rejected the Claimant’s submissions on demand management savings, as follows:

“Demand management savings [7.54-7.62, 8.69, 8.71]

10.76

The Appellant’s arguments on demand management savings are enabled principally by their consideration of the measures in the WRMP 2019 and how they are treated in the Part C Report to generate what is referred to as the Southern Water contribution [7.54-7.57]. It is by utilising the contribution that the Appellant claims that the proposal is already water neutral as it is ‘accounted for’ in Southern Water’s WRM2019. More generally, demand management savings provide further evidence that addition water demand for development can be met from other sources without the need for water neutrality [7.58-7.59].

10.77

Taking a step back, the purpose of the Part C Report is to set out a strategy for achieving water neutrality in the WSZ and provide part of the evidence base to support the adoption of Local Plans in Horsham and the other affected Local Planning Authorities. The strategy has three components, (1) reducing water demand through new build efficiency targets modelled on 110 or 85 l/p/d75, (2) offsetting through the Southern Water contribution, and (3) offsetting the remaining demand by other means using the planning system (through the strategic approach that has become SNOWS or a bespoke solution). The three components are intended to work together to provide the coverage necessary to say that water neutrality in the WSZ is achieved, delivering reasonable scientific and practical certainty of no likely adverse effects on the Arun Valley Sites. The success or failure of one component has an impact on the other two.

10.78

The Southern Water contribution is drawn from the WRMP 2019 and the demand management measures within it aimed at reducing household water consumption and leakage. The Part C Report makes an allowance to account for these measures to determine an assumed Southern Water contribution. It is therefore an estimate intended to inform the strategy in the Part C Report based on the evidence available on that time.

10.79

The Environment Agency/Ofwat/Defra letter to Southern Water of 20 October 2023 refers to concerns that the company has reported a supply-demand balance significantly below what is forecast in the WRMP 2019, driven in large part by leakage. No updates to the Part C Report have been made since its publication assessing the continuing appropriateness of the assumed Southern Water contribution. The evidence available to the Inquiry suggests that, as the underlying figures are open to question, it cannot be relied upon to create the 6345 to 8335 dwelling headroom claimed by the Appellant.

10.80

The Appellant appears to accept that the figures may lack realism and the Council is under no specific duty to bring forward alternative figures in circumstances where the October 2023 letter to Southern Water is enough to cast serious doubt. As such, the extent of assumed reductions from demand management measures is evidentially unclear and the lack of clarity does not support the Appellant’s case that the proposal is ‘accounted for’ in the WRMP 2019. The question of whether water supply from alternative sources can be assumed, even in the absence of savings from demand management measures, is addressed elsewhere in this report [7.61-7.62].

10.81

The ‘conceptual division’ of development needs is a tool of the Appellant’s invention [7.59]. It appears to come from discussion around the remaining demand to be offset explained in section 5.2.4 of the Part C Report. However, categorisation of development ‘needs’ was never the purpose of the Part C Report, nor was it intended to be used directly to support development management decisions or in the manner utilised by the Appellant.

10.82

As a strategic development allocated in the HDLP, Kilnwood Vale quite clearly formed part of the baseline informing the WRMP 2019. In this respect, the proposal is ‘planned for’. However, this is irrelevant when viewed in the context of the NE Position Statement that distinguishes development in only two ways (1) development with full planning permission prior to September 2021 that is exempt from the statement as it cannot act retrospectively, and (2) other development. The Appellant’s claim that there is another category in the middle that the proposal falls into is fictitious and, in any event, is based on figures that (for reasons explained above) are open to question. In this respect, there is no evidentially clear ‘headroom’ to utilise. Even if there were, there is no evidence on how such headroom would be apportioned to support the insistence that this proposal must be entitled to use it.

10.83

It does not appear to be in dispute that the proposal can achieve water efficiency that would meet the target of 110 l/p/d. Indeed, the open market dwellings are calculated as 91.40 l/p/d. Achievement of this could be secured by conditions. However, for the reasons above, that does not assist with confirming that the proposal would fall within any perceived headroom alluded to in the Part C Report.

10.84

In summary, I recommend that the Secretary of State does not agree that the extent of demand management savings programmed by Southern Water provides reasonably certain further evidence that additional water demand for development can be met from other sources without the need for water neutrality. Further, I recommend the Appellant’s arguments that the proposal can fairly utilise ‘headroom’ they believe the Part C Report confirms as available are rejected. Neither of these provide evidence of reasonable certainty that the Secretary of State can rely upon to confirm that no adverse effects on the integrity of the Arun Valley Sites will result from the proposal.”

In conclusion, I accept the First Defendant’s submissions that the Inspector did not misdirect himself in law. Furthermore, his findings, based on the evidence before him, were a lawful exercise of his planning judgment, and cannot be characterised as irrational.

For these reasons, Ground 1 does not succeed.

Under Ground 2, the Claimant challenged the First Defendant’s conclusion that there was insufficient certainty as to what would happen after the publication of the Sustainability Study. At IR/10.55, the Inspector noted the options open to the EA and to Southern Water. At IR/10.56, the Inspector found that the “unspecified future action of these parties does not provide the necessary reasonable certainty to conclude that no adverse effects on the integrity of the Arun Valley Sites will result from the proposal. While they can be expected to fulfil their legal obligations under the Habitats Regulations, the question of ‘how’ and ‘when’ lacks reasonable certainty.”

The Claimant submitted that the Inspector and the First Defendant should have proceeded on the basis that the regulatory regimes under the WIA 1991 and the WRA 1991 would operate effectively and properly. A lack of certainty as to how or when the EA and Southern Water took action was “nothing to the point” (Skeleton argument/85) since whatever they chose to do, they had to comply with the Habitats Regulations so as to ensure the protection of the relevant sites. To require certainty risked the “sclerosis” which Holgate J. referred to in Sizewell C (see paragraph 51 above). The Claimant also relied upon An Taisce (paragraph 50 above); paragraph 194 of the NPPF (paragraph 48 above) and the PPG (paragraph 49 above).

The Claimant submitted that the Inspector erred in his approach at IR/10.52 - 10.53 in two ways. First, the Inspector found that the EA’s letter of 26 April 2022 “indicates a perceived greater freedom on the Environment Agency’s part to balance a wider range of factors and still accord with their obligations under the Habitats Regulations”. The Claimant read this to mean that the Inspector did not disagree with the view expressed by the EA and that he considered that the EA had a greater freedom of action under regulation 9(3) of the Habitats Regulations than under regulation 63. The subsequent letter from the EA dated 11 July 2023 (paragraph 20 above) clarified its position in the light of the Harris judgment which was handed down on 6 September 2022, but the Inspector did not refer to that.

Second, when the Inspector stated that the EA’s duty under regulation 9(3) of the Habitats Regulations was “more general than” the duty under regulation 63, he failed to take into account the judgment of Johnson J. in R (Harris) v Environment Agency [2022] EWHC 2264 (Admin), at [86] - [87], which found that the EA was effectively the sole body responsible for deciding whether abstraction licences should be granted, varied or revoked, and therefore the scope for departure from the duty to have regard to the requirements of the Habitats Directive was considerable narrowed. The Claimant, in his skeleton argument at [82] – [83], submitted:

“82.

In those circumstances, as Harris makes clear, the reg 9(3) requirement is not a mere “have regard to” duty; it has substance in that it requires the EA to ensure that the requirements of the Habitats Directives are complied with….

83.

The substance of the EA’s reg 9(3) duty is thus, in the circumstances, equivalent in substance to … the reg 63 duty. The First Defendant erred in law, therefore, in proceeding on the basis that there was scope for the EA to treat the requirements of the Habitats Directive as simply one consideration amongst several – such approach would be contrary to Harris.”

The challenged paragraphs (IR/10.52 - 10.53) need to be read in their proper context, in the section of the IR titled “Southern Water voluntary minimisation and Environment Agency action following the Sustainability Review”which states as follows:

“10.46

Until the Sustainability Review concludes in 2025, and subsequently reports on its findings, there is no known ‘safe’ level of groundwater abstraction from Hardham that can be excluded from having a significant effect on the Arun Valley Sites. The review will inform the Environment Agency’s decision making about whether to take action to impose changes on the existing Hardham licence using powers in S.52 of the Water Resources Act 1990 (Footnote: ²).

10.47

Southern Water’s voluntary minimisation of a target rolling average of 5 ml/d is a temporary measure they have committed to keeping in place at least until the Sustainability Review concludes (Footnote: ³). Minimisation in this context means Southern Water using their best endeavours to keep abstraction as low as possible whilst also meeting customer demand (Footnote: ⁴). It is taken as a rolling average and has been exceeded, notably in the 2022 drought [8.30].

10.48

Voluntary minimisation was agreed between the Environment Agency and Southern Water in the short term as appropriate action for keeping ground water abstraction at Hardham from increasing appreciably above September 2021 levels. This timing is significant as it relates to the point at which the NE Position Statement was issued. It allows parties to say, at least until the Sustainability Review reports, that the likely adverse effects on the Arun Valley Sites are unlikely to worsen. It does not, as made clear by their letter of 11 July 2023 (Footnote: ⁵), discharge the Environment Agency’s duties under the Habitats Regulations. That would, instead, follow by making any necessary changes to the abstraction licence.

10.49

It logically follows that reasonable certainty of the appropriateness of the existing level of voluntary minimisation only exists until the Sustainability Review concludes. The purpose of the review is to collect hydrological and ecological data to support future decision making. As the Environment Agency puts it in their letter of 13 January 2023;

‘The protection of the [Arun Valley Site] will be secured by making any necessary changes to the abstraction licence. A voluntary commitment to reduce abstraction does not secure the necessary protection, although it is a welcome step to reducing the risk of deterioration of, and risk of adverse effects to, the site whilst detailed investigations are being carried out in relation to the abstraction’.

10.50

The current temporary minimisation measures, that were only ever intended to be short term, cannot be relied upon as avoidance/mitigation that confirms reasonable certainty of no adverse effects on the Arun Valley Sites.

10.51

Natural England and the Council’s concerns that voluntary minimisation is not secured is secondary to the fact that it is only a short-term measure. Whether a licence change at Hardham is necessary will only be known once the Sustainability Review concludes. At that time, the Environment Agency would have a range of options that includes amendment or revocation of the licence. As part of that decision making, they are under a duty under Regulation 9(3) of the Habitats Regulations to secure compliance with the Habitats Directives, and therefore to consider the effects on the Arun Valley Sites.

10.52

I agree with the Council that the Regulation 9(3) duty is more general than the Regulation 63(5) obligation to only authorise a project having ascertained that no likely adverse effects on integrity will result. The Environment Agency’s response to the Appellant of 26 April 2022 at Appendix 2 of [CD10 1.02a] gives a sense of how they see their obligations ‘in exercising our powers, we have to take account of our legal obligations when undertaking this action – these include our duties and obligations to protect the environment as well as any legal duties regarding the impact of our action on the licence holder and any duties they may have to provide public water supply’.

10.53

The response indicates a perceived greater freedom on the Environment Agency’s part to balance a wider range of factors and still accord with their obligations under the Habitats Regulations. Notwithstanding this and the more general nature of the duty under Regulation 9(3) of the Habitats Regulations, it would be wrong to discount evidence of the Environment Agency’s role out of hand.

10.54

The Secretary of State can have confidence that the Environment Agency will appropriately monitor and review a voluntary minimisation agreement with a water company and consider taking formal action if breach of it leads them to think that is necessary. Their letter of 6 June 2022 (Footnote: ⁶) provides evidence of the monitoring process they have in place, as well as confirming that they do not formally enforce voluntary action. So, while voluntary minimisation is not legally secured, discounting it purely on this basis fails to pay regard to the Environment Agency’s powers and obligations, which the Secretary of State can assume will be operated judiciously.

10.55

Looking forward, beyond the Sustainability Review, there are a range of unknown actions that the Environment Agency could take in relation to the ground water abstraction licence at Hardham in the exercise of their powers under S52 of the Water Resources Act 1991. There are also things that Southern Water may volunteer to do or, indeed, they may formally apply to change in the licence under S51 of the 1991 Act.

10.56

The unspecified future action of these parties does not provide the necessary reasonable certainty to conclude that no adverse effects on the integrity of the Arun Valley Sites will result from the proposal. While they can be expected [sic] fulfil their legal obligations under the Habitats Regulations, the question of ‘how’ and ‘when’ lacks reasonable certainty.

10.57

In summary, I recommend that the Secretary of State does not discount voluntary minimisation out of hand on the basis that it is not secured. However, it is only a short-term measure and reasonable certainty of its appropriateness cannot be judged until the Sustainability Review reports. Further, while they can be expected to comply with their legal obligations, the unspecified future action by the Environment Agency and/or Southern Water in response to the Sustainability Review does not provide evidence of reasonable certainty that the Secretary of State can rely upon to confirm that no adverse effects on the integrity of the Arun Valley Sites will result from the proposal.”

The Inspector correctly directed himself in law on the Habitats Regulations at IR/10.3 – 10.16. The passages that are relevant to this Ground are set out below:

“Appropriate assessment

10.4

By Regulation 63(1) of the Habitats Regulations a competent authority (which includes the Secretary of State exercising planning decision making powers) before deciding to give any consent, permission or other authorisation for a project which is likely to have a significant effect on a European site (either alone or in combination with other plans or projects) must make an appropriate assessment of the implications of the project for that site in view of that site’s conservation objectives.

10.5

Under Regulation 63(2) an applicant (the Appellant in this case) must provide such information as the competent authority may reasonably require for the purposes of the assessment or to enable it to determine whether an appropriate assessment is required. Regulation 63(3) says that the competent authority must for the purposes of the assessment consult the appropriate nature conservation body and have regard to any representations made by that body within such reasonable time as the authority specifies. The appropriate nature conservation body is Natural England.

10.6

Regulation 63(5) specifies that, in the light of the conclusions of the appropriate assessment, a competent authority may agree to the project only after having ascertained that it will not adversely affect the integrity of the European site.

10.7

In considering whether a project will adversely affect the integrity of the site, under Regulation 63(6), the competent authority must have regard to the manner in which it is proposed to be carried out or to any conditions or restrictions subject to which it proposes that it should be given subject to.

10.8

Beyond Regulation 63, Regulation 9 of the Habitats Regulations includes general duties on bodies relating to European sites and exercising functions so as to secure compliance with the requirements of the Habitats Directives (Regulation 9(1)). In exercising any of its functions, bodies must have regard to the requirements of the Directives so far as they may be affected by the exercise of those functions (Regulation 9(3)).

10.9

Two overarching legal points of relevance to the Secretary State’s decision making relate to imperative reasons of overriding public interest (IROPI) and the precautionary principle and the question of proportionality…..

……

10.12

Turning to proportionality, to accord with Regulation 63(5) of the Habitats Regulations, a decision maker may only grant approval having ascertained that there is no reasonable scientific doubt as to the absence of adverse effects on the integrity of the protected sites (the test of certainty). Wyatt, at paragraph 9, summarises some of the relevant points that emerge from applicable domestic and European caselaw. This includes that the duty under Regulation 63(5) embodies the precautionary principle, requiring a high standard of investigation.

10.13

In relation to proportionality in applying the precautionary principle, Waddenzee assists in confirming that ‘no reasonable scientific doubt’ is not a requirement for absolute certainty as no such thing exists and that would be disproportionate. Nevertheless, the bar is a high one. This is reflected in Sweetman in the context of compliance with the Habitats Directives, a compliant appropriate assessment ‘cannot have lacunae and must contain complete, precise and definitive findings and conclusions’.

10.14

The Council makes a fair distinction between (1) proportionality in complying with the test of certainty and (2) proportionality of any avoidance or mitigation measures necessary to conclude favourably on whether adverse effects on the Arun Valley sites are likely [8.26]. The former is uncontested between the parties, the test of certainty is not one requiring absolute certainty.

….

10.16

Regulation 63(5) is clear that the Secretary of State can grant approval in this case only after having ascertained that it will not adversely affect the integrity of the Arun Valley sites, considering the conclusions of an appropriate assessment. The scope of the consideration is limited to effects on integrity. Beyond IROPI, there is no mechanism for balancing the Regulation 63(5) duty, and any necessary avoidance or mitigation measures, against impacts that are unrelated to effects on integrity.”

Earlier in his Report, the Inspector summarised the Council’s submissions on the Habitats Regulations materially as follows:

“8.15

The Appellant contends that the Environment Agency, by allowing Southern Water to continue abstracting ground water from Hardham at a minimised rate pending the outcome of the Sustainability Review, is fulfilling its duties under the Habitats Regulations. In the Council’s view, this fails to grapple with the point that those bodies (Southern Water and Environment Agency) have two different duties under the Habitats Regulations of reliance to this appeal, depending on which function they are carrying out.

8.16

There is the general duty under Regulation 9(3) to have regard to the Habitats Directives. This is discussed at Paragraph 85-87 of Harris [2023] [ID7] and applies to the exercise of all their functions. Then there is the duty under Regulation 63(5), which applies only when they are acting as the competent authority deciding whether or not to grant consent for a plan or project. The duties are not interchangeable.

8.17

By allowing Southern Water to continue groundwater abstraction at a minimised rate pending the Sustainability Review, the Environment Agency is fulfilling its general duty under Regulation 9(3). This is not the same as discharging its duties to secure protection of the sites.

8.18

The Environment Agency’s letter to the Appellant [Footnote dated 11 July 2023] makes this clear when it says:

‘As we stated in our letter dated 6 June 2022 and confirmed in our letter dated 13 January 2023, Southern Water’s voluntary reduction in abstraction does not discharge theEnvironment Agency’s duties under the HabitatsRegulations’…’We would discharge our duties securing the protection of the SAC by making any necessary changes to the abstraction licence. This would be done following the outcome of the investigation’. (Underlined is the Council’s emphasis).

8.19

So the Environment Agency’s compliance with its duty under Regulation 9(3) of the Habitats Regulations does not provide the requisite certainty for the Secretary of State’s appropriate assessment under Regulation 63(5).”

This summary was based on the Council’s ‘Closing Statement’ at paragraphs 19 and 20.

In the light of these submissions from the Council, which referred both to the decision in Harris and the EA’s letter of 11 July 2023, I reject the Claimant’s submission that the Inspector overlooked the EA’s letter of 11 July 2023, which referred to the decision in Harris, and erroneously only had regard to the EA’s earlier letter of 26 April 2022. In fact, the Inspector expressly referred to the letter of 11 July 2023 at IR/10.48.

On my reading of IR/10.52, the Inspector was referring to, and agreeing with, the Council’s submissions when he stated:

“I agree with the Council that the Regulation 9(3) duty is more general than the Regulation 63(5) obligation to only authorise a project having ascertained that no likely adverse effects on integrity will result.” (emphasis added)

Furthermore, the Inspector was correct to describe the duty under regulation 9(3) of the Habitats Regulations as “more general” than the duty under regulation 63. The duty under regulation 9(3) is drafted in broad terms, providing that “a competent authority, when exercising any of its functions, must have regard to the requirements of the Directives, so far as they may be affected by the exercise of those functions”. In contrast, regulation 63 imposes a specific and more stringent duty on a competent authority to undertake an appropriate assessment of any proposed plan or project, in accordance with the step-by-step requirements set out in the regulation, in order to determine whether the plan or project will adversely affect the integrity of the site. In Harris, the Court held that the nature and extent of the “have regard” duty in regulation 9(3) may vary according to the duties under consideration, but it did not and could not re-write the regulations so as to remove the obvious distinction between regulation 9(3) and regulation 63 of the Habitats Regulations.

In my judgment, there are material distinctions between this case and Harris. In Harris, the EA was found to be “the sole (and certainly the principal)” public body charged with relevant duties where water was being abstracted for agriculture, and only some of the relevant geographic area was under review. Johnson J. considered that, if the EA did not secure the requirements of Article 6(2) of the Directive, “then no other public body is capable of filling the gap” (at [86]).

In Harris, Johnson J. observed, at [85], that the “have regard” duty in regulation 9(3) of the Habitats Regulations “recognises that the Environment Agency is one part of a complex regulatory structure and, depending on the issue, it may have a greater or lesser role to play” and “in some contexts, different competent authorities may have overlapping roles that are relevant to the discharge of the requirements of the Habitats Directive” (at [84]). That is the position in this case.

In this case, the EA is a competent authority with responsibility, inter alia, for the grant, revocation and variation of abstraction licences. However, the statutory undertaker, Southern Water, is also a competent authority and is reviewing the relevant area in its WRMP 2024 and the Sustainability Review. Each of these “plans” will be accompanied by a Habitats Regulations assessment. Furthermore, the Claimant’s planning application, now at reserved matters stage, also requires a Habitats Regulations assessment from the First Defendant, who is a competent authority in her capacity as a planning decision-maker.

The Inspector was entitled to take into account the EA’s understanding of its powers and duties, as set out in the letter of 26 April 2022 (see paragraph 15 above). On my reading of IR/10.53 - 10.54, the Inspector was not approving or agreeing with the EA’s letter as a correct statement of the law; he was merely recording it. The Inspector correctly observed that the letter indicated that the EA “perceived” that it had a greater freedom to “balance a wider range of factors and still accord with their obligations under the Habitats Regulations”. The Inspector did not say that he also “perceived” this to be the case, and I disagree with the Claimant’s suggestion that he can be assumed to have done so.

Furthermore, the EA’s letter of 11 July 2023 (set out at paragraph 19 above) did not withdraw its earlier statement in the letter of 26 April 2022. Rather, it explained that it was acting in accordance with the Habitats Regulations by currently undertaking an investigation, and once the Sustainability Review was available, by making any changes to the abstraction licence which it considered necessary. It also distinguished the factual position in Harris.

On my reading of the Report, I consider that the Inspector had the relevant provisions of the Habitats Regulations (regulations 9(3) and 63) well in mind when considering the position of the EA: see IR/8.16, IR/8.70, IR/10.4-10.8, IR/10.51 – 10.57, IR/10.85. It is also clear from paragraphs IR/10.46, IR/10.49 and IR/10.55 that the Inspector was looking ahead to the EA’s exercise of powers under section 52 WRA 1991, at which point regulation 63 of the Habitats Regulations would be engaged. An expert decision-maker can be taken to be familiar with the relevant statutory framework in the absence of a “sufficient positive contra-indication: per Holgate J. at [48] in R (Keir) v Natural England [2021] EWHC 2021 (Admin), applying the principle enunciated by Sales LJ in Jones v Mordue [2016] 1 WLR 2682, at [28].

In my view, the Claimant’s submission that the Inspector and the First Defendant erred in law in finding that the unspecified future action by the EA and/or Southern Water did not provide evidence of reasonable certainty that no adverse effects on the integrity of the Arun Valley sites would result from the proposed development, is misconceived.

The case law on regulation 63 of the Habitats Regulations confirms that the competent authority must be certain, and that on the evidence there should be no reasonable scientific doubt, in the context of a strict precautionary approach. As stated in Wyatt, at [9(10)]:

“What is required of the competent authority, therefore, is a case-specific assessment in which the applicable science is brought to bear with sufficient rigour on the implications of the project for the protected site concerned. If an appropriate assessment is to comply with article 6(3) of the Habitats Directive, it “cannot have lacunae and must contain complete, precise and definitive findings and conclusions capable of removing all reasonable scientific doubt as to the effects of the works proposed on the protected site concerned” (see the judgment of the CJEU in Sweetman v An Bord Pleanála (Case C-258/11) [2014] PTSR 1092, at paragraph 44, and its judgment in People Over Wind and Sweetman v Coillte Teoranta (Case C-323/17) [2018] PTSR 1668, at paragraph 38).”

In this case, scientific work was ongoing; the evidence base was not “complete, precise and definitive”; and substantial scientific doubt remained as to development’s effect on the protected site, and whether and how and when it would be resolved.

The proposition that a planning decision-maker is entitled to proceed on the basis that other regimes will operate effectively and properly is not a legal requirement to do so. It is a rebuttable presumption that a decision-maker may depart from, if the evidence justifies it. Whether or not to do so is an evaluative public law judgment for the decision-maker, subject only to challenge on Wednesbury grounds: see An Taisce at [48]; Sizewell C at [90]; National Farmers Union at [72] and [81]. Moreover, in Finch, at [106] – [108], the Supreme Court held that the existence of other regulatory controls does not remove the obligation on a planning authority to undertake a full EIA. It is likely that this principle applies, by analogy, to an appropriate assessment under the Habitats Regulations.

In this case, there was specific advice from NE that the ongoing abstraction was having a detrimental impact on the protected sites and therefore further development should be avoided unless it was subject to water neutrality mechanisms to avoid exacerbating the adverse impacts. See the Position Statement, September 2021, (paragraph 11 above); the Advice Note, February 2022, (paragraph 13 above) which stated that Southern Water had been warned of the issue as long ago as December 2019; and NE’s letter of response to the Inspector’s queries, 19 April 2024, (paragraph 21 above).

Applying Wyatt, at [9(4)], a competent authority “is entitled, and can be expected, to give significant weight to the advice of an “expert national agency” with relevant expertise in the sphere of nature conservation, such as Natural England ….”.

At the Inquiry, the evidence from NE was accepted by the EA, Southern Water and the Council. It was subjected to careful consideration by the Inspector. It has not been challenged in the statutory review.

The Inspector properly explored the uncertainty in the evidence base and its consequences before concluding that it could not be ascertained with reasonable certainty that the proposal will not adversely affect the integrity of the Arun Valley sites (IR/10.90). No public law error is disclosed in the carefully reasoned conclusions by the Inspector and the First Defendant that, in their judgment, reliance upon other regulatory regimes lacked the necessary degree of certainty to reach the high standards required of the Habitats Regulations. For example:

“10.68

In these circumstances the Secretary of State is being asked to do little more than rely on the unspecified future action of parties fulfilling responsibilities under the Habitats Regulations under other regulatory regimes, including the assumption that any necessary favourable HRA must come forward. The Secretary of State is entitled to assume that other regimes will operative effectively. However, without more detail of what will happen and when, in this case it does not provide evidence of reasonable certainty that can be relied upon to confirm that no adverse effects on the integrity of the Arun Valley Sites will result from the proposal.”

It was not irrational or otherwise unlawful for the Inspector and the First Defendant to conclude there was insufficient certainty to conclude a positive appropriate assessment without Condition 6. Such a decision was well within the scope of the First Defendant’s planning judgment given the “basic duty of the competent authority under regulation 63 … to grant planning permission only if satisfied that the proposed development will not adversely affect the integrity of the … protected site” (Wyatt, at [52]). The decision did not turn on the precise scope of the EA’s duties under regulation 9 or regulation 63 of the Habitats Regulations. It was based upon the uncertainty, on the evidence, that the relevant bodies could or would take the steps necessary in time to ensure that the proposed development would not adversely affect the integrity of the protected site.

For these reasons, Ground 2 does not succeed.