Water Neutrality and Planning: What Changed in Sussex North

 

For several years, water neutrality was one of the biggest planning constraints in parts of West Sussex. Applications in the Sussex North Water Supply Zone could be required to show that the development would not increase overall water demand, often through very high efficiency standards or offsetting.

That position has changed. Natural England withdrew its Sussex North Water Neutrality Position Statement on 31 October 2025. By summer 2026 the affected authorities were publicly describing water neutrality as an ended development constraint, and applicants are no longer generally required to produce their own water-neutrality solution for development in the zone.

This page explains what water neutrality was, why it mattered under the Habitats Regulations, what changed, and what to do with older permissions that still contain water-neutrality conditions or obligations.

 

What is water neutrality?

 

In simple terms, water neutrality means that total water use after development is no higher than it was before the development. That can be achieved through a mixture of reducing demand within the new development and, where necessary, offsetting additional demand elsewhere.

Water neutrality is not a general national planning requirement for every development in England. It became particularly important in Sussex North because public water supply relied in part on groundwater abstraction at Hardham, close to the internationally protected Arun Valley sites.

Natural England advised in 2021 that it could not rule out adverse effects from the existing abstraction on the Arun Valley Special Protection Area, Special Area of Conservation and Ramsar site. Because new development could increase water demand, the issue became part of the Habitats Regulations Assessment process.

 

Why did planning applications have to demonstrate neutrality?

 

Under regulation 63 of the Conservation of Habitats and Species Regulations 2017, a competent authority may only agree to a plan or project after the necessary assessment where it has ascertained that the proposal will not adversely affect the integrity of the protected site, subject to the exceptional derogation route.

Natural England’s 2021 position was that development drawing from the Sussex North zone should not add to the abstraction problem. Demonstrating water neutrality became the principal practical route for obtaining the necessary certainty.

Applicants therefore found themselves dealing with water-use calculations, very low litres-per-person-per-day targets, offsetting and planning conditions or obligations which could prevent occupation until a solution had been secured.

 

Crest Nicholson and the problem of relying on another regulator

 

Crest Nicholson Operations Limited v Secretary of State for Housing, Communities and Local Government [2025] EWHC 2194 (Admin) arose from this period.

The case concerned reserved matters for 280 homes at Kilnwood Vale. The Secretary of State approved the reserved matters but imposed a condition preventing occupation until water neutrality had been secured through the council’s offsetting scheme or an equivalent site-specific solution.

The developer argued, amongst other things, that the planning decision-maker could proceed on the basis that the Environment Agency and Southern Water would fulfil their own legal obligations. The High Court rejected the challenge. The scientific work was unfinished and the future action of those bodies was not sufficiently certain as to what would happen and when.

The wider legal point remains useful even though the Sussex North facts have since moved on. A planning decision-maker can often assume another regulatory regime will operate properly, but that is a rebuttable assumption rather than a legal command to ignore contrary evidence. Where regulation 63 itself requires sufficient certainty, a vague expectation that another regulator will fix the problem later may not be enough.

 

What changed on 31 October 2025?

 

Natural England withdrew its 2021 Water Neutrality Position Statement on 31 October 2025. The change followed agreement with Southern Water and the Environment Agency on a cap to groundwater abstraction intended to provide sufficient certainty that development-related demand would not adversely affect the Arun Valley protected habitats.

The affected councils then changed their development-management approach. Crawley, Chichester and West Sussex now state that development in the Sussex North Water Supply Zone is no longer required to demonstrate water neutrality. Horsham also moved away from applicants having to produce bespoke water-neutrality solutions and by June and July 2026 publicly referred to the ending of the water-neutrality constraint.

Official local updates include:

• West Sussex County Council – water neutrality
• Crawley Borough Council – water neutrality
• Chichester District Council – water neutrality
• Horsham District Council – water neutrality

 

Does that mean HRA has disappeared?

 

No. The ending of the Sussex North water-neutrality requirement is not the repeal of the Habitats Regulations and it does not remove HRA from planning.

The legal question under regulation 63 still applies where a plan or project is likely to have a significant effect on a protected site. What has changed in Sussex North is the evidence about the abstraction pathway and the need for development-specific water-neutrality mitigation.

Other impact pathways can still trigger screening or appropriate assessment, including nutrient pollution, recreational pressure, air pollution, hydrology or effects on functionally linked land. See our full HRA guide.

 

What about an old permission with a water-neutrality condition?

 

This is where the change remains commercially important. Older permissions may still contain a condition preventing occupation until water-neutrality mitigation is secured, or a Section 106 obligation tied to a bespoke offsetting arrangement.

Do not simply ignore the condition because the policy background has changed. A planning condition remains part of the permission unless it is removed or varied through the proper route. Depending on the wording and the permission, a section 73 application may be appropriate to vary or remove a condition.

Likewise, an existing planning obligation does not disappear automatically. The deed needs to be read and the appropriate mechanism identified. Our Section 106 Agreement page explains modification and discharge.

 

Do new developments still need good water efficiency?

 

Yes. Ending the special Sussex North neutrality constraint does not make water efficiency irrelevant. Building Regulations, local plan policy where lawful and current, drainage and water-supply considerations can still affect a scheme. Our guide to water scarcity and planning explains the wider water-resource issue.

The key is not to confuse ordinary water-efficiency requirements with the former bespoke HRA-driven water-neutrality regime.

 

Practical checklist

 

• Check whether the site is actually within the Sussex North Water Supply Zone
• Use current council and Natural England information, not a 2021 or 2022 validation note copied from an old application
• Do not prepare a bespoke water-neutrality scheme automatically for a new application in Sussex North
• Still carry out HRA screening where another protected-site impact pathway may exist
• For an old permission, read the exact condition and Section 106 wording before assuming it has fallen away
• Use section 73 or the appropriate planning-obligation route where a legacy restriction needs removing

 

Relevant law and case

 

• Conservation of Habitats and Species Regulations 2017
• Crest Nicholson Operations Limited [2025] EWHC 2194 (Admin)

Conservation, Heritage & Protected Sites

 

Water Neutrality Page Created: 27th August 2026