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

Kilnwood Vale is a strategic development located on the western edge of Crawley, to the north of the A264. It was identified in the West of Bewbush Joint Area Action Plan (July 2009) as a new neighbourhood of around 2500 homes with associated social, environmental, and transport infrastructure.

Outline permission was decided under the now superseded Horsham District Council Core Strategy (2 February 2007) and General Development Control Policies (21 December 2007). They identified Kilnwood Vale as a key strategic site and a major contributor to Horsham’s planned housing delivery. It was subsequently taken forward in the Horsham District Planning Framework, adopted in 2015.

Outline permission was approved in 2011 (DC/10/1612) and varied in 2016 (DC/15/2813). Of the four parts in the outline permission, Parts C and D are complete (291 homes). In Parts A and B, 1318 homes have detailed consent and are either occupied/complete or under construction. Phase 3 DEFG (the proposal for 280 dwellings which is the subject of this claim), is within Part A of the outline permission. The Claimant’s application for reserved matters approval for the proposal was made on 28 April 2023.

Horsham is within Southern Water’s Sussex North Water Resource Zone (‘WRZ’) and includes supply from groundwater abstraction on the river Arun, close to Pulborough (referred interchangeably throughout the evidence as ‘Hardham’ or ‘Pulborough’).

The abstraction site is located close to the Arun Valley Sites, that are nationally or internationally designated. The sites are the Arun Valley Special Protection Area (‘SPA’), Special Area Conservation (‘SAC’), and Ramsar site. They overlap with the Pulborough Brooks and Amberley Wild Brooks Site of Special Scientific Interest (‘SSSI’).

In September 2021, Natural England (‘NE’) published a ‘Position Statement’ giving advice for all applications falling within the WRZ. It stated:

“The Sussex North Water Supply Zone includes supplies from a groundwater abstraction which cannot, with certainty, conclude no adverse effect on the integrity of;

• Arun Valley Special Area Conservation (SAC)

• Arun Valley Special Protection Area (SPA)

• Arun Valley Ramsar Site.

As it cannot be concluded that the existing abstraction within Sussex North Water Supply Zone is not having an impact on the Arun Valley site, we advise that developments within this zone must not add to this impact. This is required by recent caselaw, Case C-323/17 People over wind and Sweetman. Ruling of CJEU (often referred to as sweetman II) and Coöperatie Mobilisation for the Environment and Vereniging Leefmilieu Case C-293/17 (often referred to as the Dutch Nitrogen cases).

Between them these cases require Plans and Projects affecting sites where an existing adverse effect is known (i.e. the site is failing its conservation objectives), to demonstrate certainty that they will not contribute further to the existing adverse effect or go through to the latter stages of the Regulations (no alternatives IROPI etc).

Developments within Sussex North must therefore must not add to this impact and one way of achieving this is to demonstrate water neutrality.

In addition, the Gatwick Sub regional Water Cycle Study concluded that water neutrality is required for Sussex North to enable sufficient water to be available to the region.

The definition of water neutrality is the use of water in the supply area before the development is the same or lower after the development is in place.

Strategic approach

Natural England has advised that this matter should be resolved in partnership through Local Plans across the affected authorities, where policy and assessment can be agreed and secured to ensure water use is offset for all new developments within Sussex North. To achieve this Natural England is working in partnership with all the relevant authorities to secure water neutrality collectively through a water neutrality strategy.

Whilst the strategy is evolving, Natural England advises that decisions on planning applications should await its completion. However, if there are applications which a planning authority deems critical to proceed in the absence of the strategy, then Natural England advises that any application needs to demonstrate water neutrality. We have provided the following agreed interim approach for demonstrating water neutrality; ….”

In 2022 Southern Water published its draft WRMP 24, accompanied by a Habitat Regulations Assessment. It has not yet been finalised.

NE published an ‘Advice Note’ in February 2022 to expand on its Position Statement which included the following advice:

“….. Natural England believes that the ongoing abstraction is having a detrimental impact on a number of designated sites…”

“Natural England first advised Southern Water in December 2019 that it could not conclude, with certainty, that the existing abstraction within the Sussex North Water Supply Zone was not having an adverse impact on the integrity of the Habitats Sites, through reduced water levels and potential water quality impacts.

In addition to existing pressures, Natural England is also concerned that the Sussex North Water Supply Zone is likely to be subject to significant future development pressures. These will necessitate increased abstraction within the region and are likely to further exacerbate any existing impacts on the Habitats Sites.

Natural England is currently undertaking a full integrated condition assessment of the SSSI sites that make up the Habitats Sites. The present indication (on the basis of water levels) is that the sites’ condition is Unfavourable.…. at this stage existing abstraction cannot be ruled out as contributing to or causing an ongoing adverse impact on the sites.”

“Pursuant to these concerns, on 14 September 2021 Natural England advised the relevant Local Authorities that the existing abstraction within the Sussex North Water Supply Zone could not be ruled out as causing an adverse effect on the Habitats Sites. Furthermore, if further development were to be consented in this region (with the requirement for additional abstraction) such development was likely to have an adverse effect on the Habitats Sites.

Natural England is closely involved with the relevant local authorities, the Environment Agency and Southern Water in developing a longer-term strategy to integrate Water Neutrality into the relevant Local Plans. However, while this broader strategy remains in development, Natural England are seeking to propose mechanisms whereby the concept of Water Neutrality can be integrated into individual planning decisions to ensure that future development can proceed in a manner that does not further adversely affect the Habitats Sites, notwithstanding these pressures…”

The Advice Note explained the concept of water neutrality, as follows:

“Definition of Water Neutrality

Water Neutrality is not currently defined in legislation, but is drawn from the Gatwick Sub regional Water Cycle Study (2020)

“For every new development, total water use in the Sussex North Water Supply Zone after the development must be equal to or less than the total water-use in the region before the new development.”

‘New development’ is considered to be any relevant project requiring a public water supply from Southern Water’s Sussex North Water Supply Zone, but is likely to be dominated by large planning applications.

The decision on whether the 2017 Regulations apply to a specific project will be a matter for the relevant Competent Authority (usually the local planning authority). However, the 2017 Regulations are likely to apply to any development which could materially increase water consumption. This could include dwellings, office, commercial and educational development among others…..”

“Achieving Water Neutrality

….. In summary, the amount of water from new developments using public water supply in the Sussex North Water Supply Zone will be calculated on an individual or cumulative basis to produce a predicted “demand” for water from growth.

Once this per-capita calculation has been made, each new qualifying development will need to demonstrate how that development will achieve no net increase in water consumption. This can be done through a combination of:

- water efficiency measures; and,

- offsetting

….”

“Legal basis for Water Neutrality

In order to avoid an adverse effect on integrity, the conservation status of a habitat must, if favourable, be preserved. If unfavourable, it must not be further harmed or rendered more difficult to retore to a favourable status. It is this which Water Neutrality is seeking to achieve.

The concept of Water Neutrality has been developed to form what is intended to be a legally robust and proportionate route to consenting plans and projects where a site is in Unfavourable Conservation Status or in Favourable Conservation Status but exceeding the relevant thresholds.

However, whilst Natural England encourages the adoption of Water Neutrality by decision makers, this is only a tool to help ensure compliance with the 2017 Regulations, and does not preclude the consideration by local planning authorities of alternative methods to protect the Habitats Sites whilst enabling development, provided the Habitat Regulations Assessment tests are met.

Furthermore, each project will continue to require its own assessment. The Advice Note is not intended to pre-judge the outcome of individual applications, each of which will need to be considered on its individual merits and the findings of its accompanying assessment.”

“….given the existing stresses on the sites and the need to engage with individual planning decisions, the Statement is considered the most effective interim approach to help ensure that any planning applications within the Sussex North Water Supply Zone can be determined in compliance with the 2017 Regulations whilst the Strategy is evolving.

Strategic long-term approach

Given existing pressures, both environmental and developmental, achieving Water Neutrality is likely to remain necessary for as long as the adverse effect risk from water supply abstraction continues, and may be required until the Habitats sites in question are restored to FCS. In practical terms, this is likely to require the delivery of an alternative water supply (estimated around 2030 with significant uncertainty).”

In a letter dated 26 April 2022, the EA replied to questions posted by Mr Aitken, the Claimant’s consultants, as set out below:

“1 Does the Environment Agency accept Natural England's allegation that "it cannot be concluded that the existing abstraction within Sussex North Water Supply Zone is not having an impact on the Arun Valley (European site)"

The Environment Agency does agree with Natural England that “it cannot be concluded that the existing groundwater abstraction at Hardham is not having an impact on the Arun Valley site.” I have set out the reason for this below.

The abstraction licence held by Southern Water for abstraction from groundwater at Hardham in Sussex was originally issued as a Licence of Right in January 1966. The Environment Agency reviewed the impact of all relevant permissions, including this abstraction licence, on the Arun Valley Special Protection Area (SPA). At that time, it was concluded that the abstraction licence could be affirmed as it was concluded that there was no adverse effect on site integrity.

In 2016 the Arun Valley was designated as a Special Area of Conservation (SAC) and further new information came to light which suggested that there could be a pathway for the groundwater abstraction at Hardham to impact on the designated site. It is for this reason that we agree with Natural England's view.

2 Does the Environment Agency accept that the Hardham groundwater licenses authorise a level of abstraction that cannot be excluded from having adverse effect on the European sites? We note that the current levels of abstraction are significantly lower than the licensed maximum levels.

The Hardham groundwater licence is not time limited. Where there are concerns about the sustainability of a permanent abstraction licence there are two options for changing the licence. Under Section 51 of the Water Resources Act 1991 a licence holder can apply to change their abstraction licence or under Section 52 of the Water Resources Act we can take action to impose licence changes.

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.

Where new information suggests that a permanent Water Company abstraction licence may be having an impact on a designated site, and before taking action to change an abstraction licence we would usually require an investigation to be carried out. This would provide evidence of the nature of the impact and determine what measures may be necessary to protect or restore the site. We use the results of the investigation to determine any changes to the licence which may be necessary. When doing so we would look to Natural England for their views before we come to any decisions on what, if anything, we would do about the abstraction.

In line with this procedure, I can inform you that Southern Water is carrying out an investigation into the impact of the Hardham groundwater abstraction licence which will conclude in 2025 after collection of a range of hydrological and ecological data. Whilst this work is being carried out, Southern Water has made commitments to minimise use of the Hardham groundwater abstraction.”

In December 2022, the ‘Final Report’ of the ‘Sussex North Water Neutrality Study: Part C - Mitigation Strategy’ was published by the Council and other Councils in the WRZ. It was summarised in the Inspector’s Report at paragraph 6.6 (‘IR/6.6’):

“6.6

The strategic approach of relevance to Horsham includes the mitigation strategy described in detail in the Sussex North Water Neutrality Study: Part C – Mitigation Strategy (Part C report) [CD8 1.14c]. It is endorsed by Natural England [CD8 1.22]. The proposals in the mitigation strategy are threefold;

(1)

reducing water demand through defined water efficiency requirements for new development, (2) water company demand management delivery, and (3) a Local Planning Authority led offsetting scheme. The offsetting scheme known as SNOWS will, according to the Council, become operational later in 2024.”

The Final Report described the operation of the local authority offsetting scheme at section 2.4, explaining that a developer who submits a planning application will be required to pay a fee to the offsetting operating body, based on the assessed water consumption of the proposed development. The offsetting will then be delivered by a range of measures, summarised in section 5.3.

The anticipated time frame of the water neutrality strategy was set out at paragraphs 28 - 29:

“28.

Water neutrality is required as long as there is potential for an adverse effect on the sensitive habitats in the Arun Valley. In practice this means it is required until Southern Water can provide an alternative water source to replace groundwater abstraction at Pulborough. Time is required to allow SW to identify, design, obtain funding and construct an alternative source through their business plan and Water Resource Management Plan (WRMP) and business planning processes. It is therefore unlikely that a new source could be available before 2030. This strategy will therefore take the approach that neutrality will be required throughout the time frame covered by the Local Plans of CBC, CDC and HDC; a period up until 2038/2039. This will be referred to in the rest of the report as the “Local Plan period”.

29.

Once a long-term solution has been put in place by SW, a water neutrality scheme may no longer be required. For this reason, it is proposed that the Offsetting Scheme outlined in this Strategy runs to 2030, when it is reviewed…..”

By a letter dated 11 July 2023, the EA again responded to questions from Mr Aitken on behalf of the Claimant, as follows:

“Point 1 Does the EA agree with NE that there is currently no known level of groundwater abstraction at Hardham that can be excluded from having significant effects on the European Protected sites?

Subject to the outcome of the sustainability investigation that is underway and due to complete in 2025, we agree with NE that there are no known levels of abstraction that can be excluded from having likely significant effect at this time. This means we need to investigate fully to decide what appropriate action should be taken because, although we agree likely significant effects cannot be ruled out, that does not indicate what action may need to be taken in relation to abstraction up to, and including, the potential revocation of abstraction licences.

Point 2 Does the EA continue to be of the view that what (if any) abstraction whose effect can be so excluded will only be established after the investigations currently being undertaken by Southern Water (scheduled for completion in March 2025)?

As a result of our response on Point 1 set out above, our view continues to be that the investigation will determine what level of abstraction, if any, is sustainable. We will then be able to take appropriate action to address this. We consider this to be a reasonable approach and in line with the Harris judgment.

Point 3 Does the EA continue to be of the view (expressed in its letter of 13 January 2023) that, pending the licence review in the light of Southern Water's investigations, a voluntary reduction by Southern Water to abstraction of 4.2 Ml/day does not discharge the EA's duties under the Habitats Regulations?

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 the Environment Agency’s duties under the Habitats Regulations.

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.

We welcome Southern Water's voluntary action to reduce their abstraction; such a reduction will be providing environmental protection that would otherwise not be occurring. This level of reduced abstraction is determined by Southern Water as part of the operational conditions in which they can meet public water supply demands with the sources of water available to them.

On the second page of your letter dated 21 June 2023 you refer to the Harris judgement. We do not accept that we are in breach of our Habitats Regulations duties in relation to Hardham abstraction. The Harris judgment found that Environment Agency’s approach to dealing with damaging abstraction in north Norfolk was insufficient in that we were only taking action in relation to some SSSIs and not all the SSSIs that made up the Broads SAC. The judgment said we had to do more and our response, which was accepted by the court, and the Harrises who brought the judicial review, was the production of the Broads Sustainable Abstraction Plan in which we detailed what further investigation and modelling we would be doing over the next few years on those other SSSI components and once completed the actions we would take on licences.

This is a different situation to what we are doing in relation to the Hardham abstraction where we are already undertaking the investigation of impacts of licences thus fulfilling our Habitats Regulations duty so long as we then take action depending on the outcome of investigation.

The Harris judgment does not mean we must immediately revoke the Hardham licence but rather, so long as we are addressing the issues of effects on the SAC and have a plan to act once the extent of the effects is known, then we are taking appropriate steps as per the Harris judgment.

Point 4If the answer to (3) is yes, will the EA secure a cessation of abstraction from Hardham, pending the licence review?

For the operational reasons set out above, we continue to welcome Southern Water's voluntary action in reducing their abstraction, at the same time as balancing their operational needs to supply water. The licence review will determine whether the licence should be revoked or not but we cannot prejudge the outcome of that review before we know the extent of effects of abstraction and whether revocation is the only action available to ensure no adverse effects on the SAC.

Point 5 If the answer to (3) is 'no', will the EA secure that, pending the licence review, Southern Water does not increase its abstraction above 4.2 Ml/day?

We will continue to work closely with Southern Water regarding their voluntary action to reduce abstraction taking into account their operational supply and investigation needs until the investigation concludes and the appropriate course of action is taken.”

By a letter of 7 July 2023, Southern Water responded to questions from Mr Aitken in respect of a different development in the same area, as follows:

“…..

The bulk supply agreement with Portsmouth Water provides for a minimum daily water supply capacity to Southern Water …

Please note that in drought conditions it is possible that Portsmouth Water could however seek to reduce the available supply under the bulk supply agreement….

Southern Water has assumed supply availability may reduce by 50% in an extreme drought event based on a best estimate of resource availability…..

1.

Does Southern Water agree with NE that there is currently no known level of groundwater abstraction at Hardham that can be excluded from having significant effects on the European Protected sites?

In September 2021 Natural England (NE) issued a Position Statement for applicants of new development within Sussex North Water Resource Zone (WRZ) (the NE Position Statement). This confirmed that it cannot be concluded that the existing abstraction within Sussex North Water Supply Zone is not having an impact on the protected sites in the Arun valley. Natural England has advised that new developments within this zone must not add to this impact and making development ‘water neutral’ is one way of preventing any further negative impact. This position has been adopted by the relevant local planning authorities who require that any development in the Sussex North WRZ must demonstrate water neutrality. The Position Statement defines water neutrality as “the use of water in the supply area before the development is the same or lower after the development is in place.”

Currently we are carrying out an environmental investigation (sustainability study) of the potential impacts of our groundwater abstractions at Hardham, with the key objectives to scientifically inform the potential water supply mechanisms to the Arun valley protected sites and determine any hydrogeological linkages to our groundwater abstraction at Hardham. Until the investigation is completed, which is expected at the end of March 2025, and the scientific information is available, we cannot confirm what level of groundwater abstraction (if any) might be having an impact.

2.

Does Southern Water agree that what (if any) abstraction whose effects can so be excluded will only be established after the investigations currently being undertaken by you at the EA’s request (scheduled for completion 2025)?

Yes, that is correct. There is uncertainty over the cause of the wildlife decline at the Arun valley protected sites. NE believe that Southern Water’s groundwater abstraction activity at its Hardham Water Supply Works (WSW) could be contributing to this impact. As mentioned above, we are undertaking a full sustainability study of our Hardham groundwater abstraction and the extent of its impacts on the protected sites to understand any links and to ensure that it is sustainable in the long term. This investigation is due to complete in 2025. Meanwhile we have voluntarily reduced our Hardham groundwater abstraction volumes. We commenced a reduction in autumn 2021, with a target rolling average of 5 MI/day, representing approximately 40% reduction from previous typical levels (average daily abstraction groundwater abstraction from 1/1/19 to 31/7/21 was 12.7 Ml/d; or, since 1/1/02, was 11.7 Ml/d). This commitment extends at least to the completion of the sustainability review of the licence in 2025.

We are investigating NE’s concerns further to ensure that our abstraction is not causing an impact and is sustainable in the long term. This could mean we take less from the Hardham groundwater source in future; however, our position will be informed by the completion of our sustainability study in 2025.

…..

4.

If the answer to (3) is ‘yes’, will Southern Water commit to a cessation of abstraction from Hardham pending the license review, and will utilize alternative sources available to them?

Again, we are not entirely clear what is meant / what you are asking by this question but provide the following comment:

Our position is that in most water resource conditions Southern Water has a sufficient supply available to meet demand in the Sussex North WRZ and that we have some flexibility in where water is sourced from, thereby enabling the commitment to reduced abstraction from the Hardham groundwater source while the sustainability study is ongoing.

However, when dry periods are experienced and these become more severe, the output of several other sources in Sussex North WRZ become constrained by water availability, placing more reliance on the Hardham groundwater source. In the scenario of a severe drought or major operational supply outage we would potentially need to increase our groundwater abstraction to a higher rolling average, including potentially up to the full licensed abstraction limit for short periods, to ensure the expected supply to our existing customers in the Sussex North WRZ. For this reason, we would not be in a position to commit to a cessation of abstraction from Hardham or to a fixed limit of 5 Ml/d (or 4.2 Ml/d as quoted in your letter of June 21st)

5.

If the answer to (3) is ‘no’, will Southern Water commit that, pending the license review, it will not increase its abstraction above 4.2 Ml/day and will utilise alternative sources available to it?

As previously stated, we are committed to continue to abstract a target rolling average of 5 Ml/d from our groundwater source at Hardham, whenever conditions are favourable to do so.

We also require the flexibility of potentially abstracting up to our full licensed amount during extreme events to ensure resilience in our supply of water to existing customers. Our daily abstraction will at times be over the 5 Ml/d and there will be times when abstraction is below this amount. The variation in our ground water abstraction is dependent on factors such as demand, network flexibility and availability of water from other sources. For these reasons, we are not in a position to agree to a fixed daily limit of abstraction less than our licensed daily limit.”

NE did not participate in the Inquiry but in a letter dated 19 April 2024 it responded to the Inspector’s queries (emphasis added) as follows:

“3.

Do you agree:

a.

that the evidence provided enables it to be ascertained that the proposal would not adversely affect the integrity of the Arun Valley Sites without the need for the development to demonstrate water neutrality?

Natural England does not believe that the evidence provided by the appellant is sufficient to conclude that the proposal would not adversely affect the integrity of the Arun Valley designated sites without the need to demonstrate water neutrality.

It is understood that Southern Water and the Environment Agency have an active investigation into the environmental impacts of the Hardham groundwater abstraction (currently forecast for completion in March 2025); and that the findings of this investigation will determine what level of abstraction at Hardham can continue, while ensuring adverse effects on the Arun Valley designated sites can also be ruled out. However, it is Natural England’s opinion that until this investigation has been completed, it remains unknown as to what is an acceptable level of groundwater abstraction (that would be able to rule out an adverse effect on integrity on the Arun Valley designated sites).

As such, given the current uncertainty as to the potential impacts of additional abstraction, it is Natural England’s advice that “for every new development, total water use in the Sussex North Water Supply Zone after the development must be equal to or less than the total water-use in the region before the new development” (Natural England advice note, February 2022) in order to ensure that future development does not contribute to increased levels of abstraction.

Based upon the information submitted by the appellant, it is proposed that there is not a requirement to demonstrate water neutrality, owing to the minimisation currently being undertaken by Southern Water. However, Natural England would reiterate that the minimisation does not consider, nor evidence, the fundamental question of how much water can be abstracted without having an adverse effect on the Arun Valley designated sites.

Given the current uncertainty as to what level of abstraction can occur without having an adverse effect on the Arun Valley designated sites, it is Natural England’s advice that the current minimisation does not provide sufficient certainty nor evidence to conclude that any proposed developments that fail to demonstrate water neutrality will not have an adverse effect on the integrity of the Arun Valley designated sites.

In the absence of evidence to conclude how much water can be abstracted without having an adverse effect, it remains Natural England’s opinion that future development should demonstrate how water neutrality will be achieved in order to ensure it does not result in additional abstraction beyond appropriate levels (with regard to the Arun Valley designated sites).

b.

that an alternative method that would protect the Arun Valley Sites has been put forward (paying regard to page 3 of the Natural England Advice Note: February 2022)?

As outlined within our February 2022 advice note, it is our view that the delivery of an alternative water supply may be required until the Arun Valley designated sites are restored to favourable conservation status.

c.

Does the imposition of the condition at page 28 the Statement of Common Ground [ID11] change your response to questions a or b?

The specific wording and suitability of conditions is a matter outside of Natural England’s remit and area of expertise. However, in this context, it is Natural England’s advice that any conditions that seek to ensure that there is not an adverse effect on the integrity on the Arun Valley designated sites should be suitably worded as to ensure that an adverse effect can be ruled out and be based upon robust evidence. We would advise that any mitigation that a proposed condition seeks to secure, should also consider both the scientific certainty that it would provide, as well as the practicality of its delivery.

4.

Do you agree that the imposition of the two conditions set out on page 27 of the Statement of Common Ground [ID11] enable it to be ascertained that the proposal would not adversely affect the integrity of the Arun Valley Sites? If not, please specify your reasons and provide details of any additional measures you consider are necessary.

…. Natural England would advise that, in order to rule out an adverse effect on the integrity of the Arun Valley designated sites, that appropriate measures should be secured that clearly demonstrate how an adverse effect can be ruled out. We would advise that the demonstration of water neutrality is a suitable means of achieving this.”