Lifted restrictions? Not quite — why Water Neutrality still matters in Sussex North
Over the past few days there has been a wave of excitement in planning and development circles: the government has announced that thousands of new homes in North Sussex can now proceed following what appears to be a lifting of water neutrality restrictions. Local authorities such as Horsham have responded positively, noting that the new Sussex North Water Certification Scheme (SNWCS) is now ready to launch.
But beneath the headline lie important limitations and caveats. The announcement does not mean that all water neutrality requirements are gone. The “lift” applies only to allocated sites in local and neighbourhood plans and, crucially, smaller schemes and individual developments (especially those unallocated or outside the planning framework) will not automatically benefit.
All developments will continue to need a water neutrality statement and access to SNWCS will remain conditional. So for H2Ogeo and our clients, it is effectively business as usual for water neutrality work.
Below, we discuss what the changes do and don’t allow and what that means in practice.
What the government announcement actually says
On 8 October 2025, DEFRA, Natural England, the Environment Agency and MHCLG jointly announced a “managed exit” from the freeze on planning decisions in North Sussex, unlocking around 4,000 previously stalled homes plus enabling another 17,000 to proceed. The press release frames this as resolving a “four-year pause” on development while still “safeguarding local wetlands and wildlife.”
In short: the government has agreed a package whereby Southern Water will alter its abstraction permits to reduce pressure on river and wetland systems, along with habitat restoration funding. The assumption is that this unlocks more capacity within the Sussex North Water Resource Zone and allows a controlled return of development in selected areas.
The Horsham District Council statement makes it clear that the emergence of SNWCS (the successor to SNOWS) is part of that managed exit but it is also clear that they are treating the government announcement with caution, pending formal advice and evidence changes to the Natural England Position Statement.
So it’s not a blanket repeal — it is carefully targeted.
Key restriction: only allocated sites benefit from relief
One of the most significant caveats is that only allocated housing sites in adopted or post-submission local plans (or made neighbourhood plans) appear eligible under this new “lift.” Schemes on smaller, unallocated plots (infill, windfalls, or outside settlement boundaries) are excluded from many of the relaxations. This is confirmed in the eligibility criteria for SNWCS itself.
The SNWCS scheme is specifically designed to certify development water use provided that the development principle is in accordance with:
an adopted or post-submission local plan, or
a made or post-examination neighbourhood plan
If a development proposal falls outside those policy allocations (e.g. unallocated housing, employment on an undesignated site, or development not otherwise accepted in principle), it is explicitly excluded.
Moreover, development permitted via general permitted development rights is also excluded (unless in limited authority-driven cases) under SNWCS rules.
In practice: the “lifted” status will only apply to those large sites that have already been through the strategic planning process and are included in local plans. A small site that is not part of the plan cannot automatically assume a relaxed approach.
Why individual / smaller schemes are still in the firing line
Because the government relief is directed at allocations in adopted plans, small or individual developments outside that framework remain covered by the original water neutrality rules. Those proposals still:
Must submit a robust water neutrality statement at planning application stage (or in reserved matters or condition discharge) to show that the development will not worsen water stress. (Councils such as Horsham already demand this for all water-consumptive development. Horsham District Council)
Still face the requirement to mitigate or offset any residual water demand increases, through certification or bespoke solutions.
If they are not eligible for SNWCS access (because of their unallocated status), they must implement alternative offsetting arrangements.
In short: the “lift” for allocations does not mean a free pass for all development. Many schemes remain fully subject to the neutrality regime.
SNWCS remains central — and sites still need a water neutrality statement
A major pillar of the new approach is that SNWCS remains the primary certification / offsetting route for qualifying developments. It replaces the earlier SNOWS scheme but functions similarly: developers request certification from SNWCS, pay the certification charge, and thereby demonstrate that their development’s water demand is offset within the resource zone.
But SNWCS is not unconditional or unlimited:
Certification is subject to scheme capacity. If the scheme is fully subscribed, an applicant may not be able to access SNWCS and may need an alternative mitigation route; and.
SNWCS is unavailable for developments outside allocated policy sites.
Even under the new announcement, development proposals will need to include:
A Water Neutrality Statement (showing baseline, proposed consumption, mitigation, and enforceable mechanisms)
Evidence of water efficiency measures built into design (e.g. fittings, reuse, recycling)
A guarantee that mitigation / offsetting is secured ahead of occupation or via legally binding agreements
These remain standard expectations in planning submissions and are provided by H2Ogeo.
Despite the government signal that restrictions are being eased for strategic allocations, the procedural and compliance framework around water neutrality (and SNWCS access) remains in force.
What this means practically for developers and H2Ogeo
For H2Ogeo and our clients, the announcement brings both potential opportunity and continued constraints, in other words, the announcement does not obviate the need for water neutrality planning work — it only narrows the scope of which developments may see procedural relief.
Conclusion: a partial unlock, not a free pass
The government’s latest announcement is significant: it suggests a pathway to resume development in North Sussex, and potentially eases constraints for large, allocated strategic sites. But it is not a blanket lifting of water neutrality rules. Many smaller or non-allocated developments remain fully subject to the requirement to demonstrate water neutrality — with or without SNWCS.
Sources:
Thousands of new homes get the go ahead in North Sussex - GOV.UK
Council response to Government's new homes announcement | Horsham District Council
Sussex North Water Certification Scheme (SNWCS) | Horsham District Council
