Crest Nicholson Operations Limited v Secretary of State for Housing, Communities and Local Government & Anor [2025] EWHC 2194 (Admin)

“No dwelling hereby permitted shall be first occupied until written agreement from the Local Planning Authority has been provided that either: i) A water neutrality mitigation scheme has been secured via Horsham District Council’s adopted Offsetting Scheme (in line with the recommendations of the Sussex North Water Neutrality Study: Part C – Mitigation Strategy, Final Report, December 2022), OR ii) A site-specific water neutrality mitigation scheme has been (a) agreed in writing with the Local Planning Authority as being equivalent to Horsham District Council’s adopted Offsetting Scheme AND (b) implemented in full.”

“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; ….”

“….. 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…”

“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).”

“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.”

“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.”

“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…..”

“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.”

“….. 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.”

“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.”

“Main issues Whether a Habitats Regulations compliant appropriate assessment can be concluded and, if so, on what basis. 14. The Secretary of State has taken into account the legal principles underpinning appropriate assessment summarised by the Inspector at IR10.3-IR10.10, the Inspector’s conclusion in respect of Imperative Reasons of Overriding Public Benefit (IROPI) set out at IR10.11 and his consideration of proportionality in applying the precautionary principle set out at IR10.12-IR10.19 and agrees with the Inspector’s approach. 15. For the reasons set out at IR10.20-IR10.90 the Secretary of State agrees with the Inspector’s conclusions at IR10.85-IR10.90 that it cannot be ascertained (with reasonable certainty) that the proposal will not adversely affect the integrity of the Arun Valley Sites. 16. In relation to likely significant effects, she agrees that as the Water Supply Zone includes supplies from groundwater abstraction it cannot, with certainty, be concluded that there will be no adverse impact on the Arun Valley Sites for the reasons set out at IR10.24-IR10.27. For the reasons set out at IR10.28-IR10.32 she agrees that the concept of Water Neutrality is not of central relevance to the question of whether a favourable appropriate assessment can be concluded. 17. …. 18. The Secretary of State has considered matters arising in relation to reliance of other regulatory regimes (IR10.41-IR10.45); Southern Water Voluntary Minimisation and Environment Agency action following the Sustainability Review (IR10.46-IR10.57); the WRMP 2024 (IR10.58-IR10.69); Alternative Sources of Supply (IR10.70-IR10.75); and Demand Management Savings (IR10.76-IR10.84). For the reasons set out at IR10.40-IR10.91, she agrees with the Inspector’s conclusions at IR10.85-IR10.91, and agrees that based on the Appellant’s evidence of avoidance/mitigation it cannot be ascertained (with reasonable certainty) that the proposal will not adversely affect the integrity of the Arun Valley Sites (IR10.90). 19. In considering whether compliance with conditions or other restrictions enable it to be ascertained that the proposal would not adversely affect the integrity of the site, for the reasons set out at IR10.92-IR10.112 the Secretary of State agrees with the Inspector’s proposed amendments to the Council’s suggested Sussex North Offsetting Water Scheme (SNOWS) condition set out at IR10.111 and his conclusion at IR10.112 that compliance with conditions enables her to ascertain that the proposal would not adversely affect the integrity of the Arun Valley sites. 20. The Secretary of State agrees with the Inspector’s conclusion at IR10.113 that subject to compliance with conditions, she is able to ascertain with reasonable certainty that the proposal would not adversely affect the integrity of the Arun Valley Sites. She further agrees that she is able to conclude a favourable appropriate assessment and discharge her duty under Regulation 63(5) of the Habitat Regulations. The Secretary of State adopts IR10.3-IR10.114 as the necessary Appropriate Assessment in her role as the Competent Authority on this matter. 21. Like the Inspector at IR10.114 in fulfilling her duty, the Secretary of State has had regard to the representations made by Natural England, as the appropriate nature conservation body for the purposes of Regulation 63(3) of the Conservation of Habitats and Species Regulations 2017. ….. Planning conditions 24. The Secretary of State had regard to the Inspector’s analysis at IR10.90-IR10.112 and IR11.1-IR11.4, the recommended conditions set out at the end of the IR and the reasons for them, and to national policy in paragraph 56 of the Framework and the relevant Guidance. She is satisfied that the conditions recommended by the Inspector, including Condition 6, comply with the policy test set out at paragraph 56 of the Framework and that the conditions set out at Annex B should form part of her decision. Planning balance and overall conclusion 25. For the reasons given above, the Secretary of State considers that the appeal scheme is in accordance with the Outline Permission and the relevant policies of the HDPF and of the JAAP and is in accordance with the development plan as it relates to the reserved matters under consideration. She has gone on to consider whether there are material considerations which indicate that the proposal should be determined other than in line with the relevant development plan policies. 26. Weighing in favour of the proposal are housing, affordable housing, employment, economic benefits, provision of open space, remediation of landfill and biodiversity benefits. The Secretary of State gives these benefits significant weight. 27. Overall, the Secretary of State considers that the accordance with the outline planning permission and relevant development plan policies, and the material considerations in this case indicate that the reserved matters should be approved. 28. The Secretary of State therefore concludes that the reserved matters should be approved subject to the conditions set out in Annex B.”

“An application under section 288 is not an opportunity for a review of the planning merits…..”

“6. In my judgment at first instance in Bloor Homes East Midlands Ltd. v Secretary of State for Communities and Local Government [2014] EWHC 754 (Admin) (at paragraph 19) I set out the “seven familiar principles” that will guide the court in handling a challenge under section 288. This case, like many others now coming before the Planning Court and this court too, calls for those principles to be stated again – and reinforced. They are: “(1) Decisions of the Secretary of State and his inspectors in appeals against the refusal of planning permission are to be construed in a reasonably flexible way. Decision letters are written principally for parties who know what the issues between them are and what evidence and argument has been deployed on those issues. An inspector does not need to “rehearse every argument relating to each matter in every paragraph” (see the judgment of Forbes J. in Seddon Properties v Secretary of State for the Environment (1981)42 P. & C.R. 26, at p.28). (2) The reasons for an appeal decision must be intelligible and adequate, enabling one to understand why the appeal was decided as it was and what conclusions were reached on the “principal important controversial issues”

“… the courts should respect the expertise of the specialist planning inspectors, and start at least from the presumption that they will have understood the policy framework correctly.”

“I hope I am not over-simplifying unduly by suggesting that the central issue in this case is whether the decision of the Secretary of State leaves room for genuine as opposed to forensic doubt as to what he has decided and why. This is an issue to be resolved as the parties agree on a straightforward down-to-earth reading of his decision letter without excessive legalism or exegetical sophistication.”

“Article 6 1. For special areas of conservation, Member States shall establish the necessary conservation measures involving, if need be, appropriate management plans specifically designed for the sites or integrated into other development plans, and appropriate statutory, administrative or contractual measures which correspond to the ecological requirements of the natural habitat types in Annex I and the species in Annex II present on the sites. 2. Member States shall take appropriate steps to avoid, in the special areas of conservation, the deterioration of natural habitats and the habitats of species as well as disturbance of the species for which the areas have been designated, in so far as such disturbance could be significant in relation to the objectives of this Directive. 3. Any plan or project not directly connected with or necessary to the management of the site but likely to have a significant effect thereon, either individually or in combination with other plans or projects, shall be subject to appropriate assessment of its implications for the site in view of the site's conservation objectives. In the light of the conclusions of the assessment of the implications for the site and subject to the provisions of paragraph 4, the competent national authorities shall agree to the plan or project only after having ascertained that it will not adversely affect the integrity of the site concerned and, if appropriate, after having obtained the opinion of the general public. 4. If, in spite of a negative assessment of the implications for the site and in the absence of alternative solutions, a plan or project must nevertheless be carried out for imperative reasons of overriding public interest, including those of a social or economic nature, the Member State shall take all compensatory measures necessary to ensure that the overall coherence of Natura 2000 is protected. It shall inform the Commission of the compensatory measures adopted.”

“9. — Duties relating to compliance with the Directives (1) The appropriate authority, the nature conservation bodies and, in relation to the marine area, a competent authority must exercise their functions which are relevant to nature conservation, including marine conservation, so as to secure compliance with the requirements of the Directives. (2) ….. (3) Without prejudice to the preceding provisions, a competent authority, in 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.”

“63.— Assessment of implications for European sites and European offshore marine sites (1) A competent authority, before deciding to undertake, or give any consent, permission or other authorisation for, a plan or project which— (a) is likely to have a significant effect on a European site or a European offshore marine site (either alone or in combination with other plans or projects), and (b) is not directly connected with or necessary to the management of that site, must make an appropriate assessment of the implications of the plan or project for that site in view of that site's conservation objectives. (2) A person applying for any such consent, permission or other authorisation 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. (3) 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. (4) It must also, if it considers it appropriate, take the opinion of the general public, and if it does so, it must take such steps for that purpose as it considers appropriate. (5) In the light of the conclusions of the assessment, and subject to regulation 64, the competent authority may agree to the plan or project only after having ascertained that it will not adversely affect the integrity of the European site or the European offshore marine site (as the case may be). (6) In considering whether a plan or project will adversely affect the integrity of the site, 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 the consent, permission or other authorisation should be given. ….. (9) In paragraph (1) the reference to the competent authority deciding to undertake a plan or project includes the competent authority deciding to vary any plan or project undertaken or to be undertaken.”

“64. — Considerations of overriding public interest (1) 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 (which, subject to paragraph (2), may be of a social or economic nature), it may agree to the plan or project notwithstanding a negative assessment of the implications for the European site or the European offshore marine site (as the case may be). (2) Where the site concerned hosts a priority natural habitat type or a priority species, the reasons referred to in paragraph (1) must be either— (a) reasons relating to human health, public safety or beneficial consequences of primary importance to the environment; or (b) any other reasons which the competent authority, having due regard to the opinion of the appropriate authority, considers to be imperative reasons of overriding public interest. (3) Where a competent authority other than the Secretary of State or the Welsh Ministers desires to obtain the opinion of the appropriate authority as to whether reasons are to be considered imperative reasons of overriding public interest, it may submit a written request to the appropriate authority— (a) identifying the matter on which an opinion is sought; and (b) accompanied by any documents or information which may be required. (4) In giving its opinion as to whether the reasons are imperative reasons of overriding public interest, the appropriate authority must have regard to the national interest, and provide its opinion to the competent authority. ……”

“9. There is a wealth of case law relevant to article 6(3) and regulation 63, both in the Court of Justice of the European Union (“the CJEU”) and in the domestic courts. Some basic points emerge: (1) The duty imposed by article 6(3) of the Habitats Directive and regulation 63 of the Habitats Regulations rests with competent authorities, not with the courts. Whether a plan or project will adversely affect the integrity of a European protected site under regulation 63(5) is always a matter of judgment for the competent authority itself (see the judgment of the CJEU in Holohan v An Bord Pleanála (Case C-461/17) [2019] PTSR 1054, at paragraph 44). That is an evaluative judgment, which the court is neither entitled nor equipped to make for itself (see the judgment of Lord Carnwath in R. (on the application of Champion) v North Norfolk District Council [2015] UKSC 52; [2015] 1 W.L.R. 3170, at paragraph 41, and the judgment of Lord Justice Sales, as he then was, in Smyth v Secretary of State for Communities and Local Government [2015] EWCA Civ 174; [2015] PTSR 1417, at paragraph 83). In a legal challenge to a competent authority’s decision, the role of the court is not to undertake its own assessment, but to review the performance by the authority of its duty under regulation 63. The court’s function is supervisory only. This has been emphasised often in the domestic cases (see, for example, the recent first instance judgment in Compton Parish Council v Guildford Borough Council [2020] J.P.L. 661, at paragraph 207). (2) In Coöperatie Mobilisation for the Environment UA, Vereniging Leefmilieu v College van Gedeputeerde Staten van Limburg (Case C-293/17) [2019] Env. L.R. 27 (“Dutch Nitrogen”),the CJEU said that it is “for the national courts to carry out a thorough and in-depth examination of the scientific soundness of the “appropriate assessment”…” (paragraph 101 of the judgment), which “makes it possible to ensure that there is no reasonable scientific doubt as to the absence of adverse effects of each plan or project on the integrity of the site concerned, which it is for the national court to ascertain” (paragraph 104). The force of these statements is that the court, for its part, must be wholly satisfied in the exercise of its supervisory jurisdiction that the competent authority’s performance of its obligations under article 6(3) was lawful. It must satisfy itself of the lawfulness of the authority’s consideration of the scientific soundness of the appropriate assessment. But there is nothing in the CJEU’s judgment to suggest that it intended to transform the respective roles of the competent authorities and the domestic courts by giving the court the job of undertaking an alternative appropriate assessment of its own. (3) When reviewing the performance by a competent authority of its duty under regulation 63, the court will apply ordinary public law principles, conscious of the nature of the subject-matter and the expertise of the competent authority itself. If the competent authority has properly understood its duty under regulation 63, the court will intervene only if there is some Wednesbury error in the performance of that duty (see the judgment of Sales L.J. in Smyth, at paragraph 80, and the judgment of this court in Plan B Earth v Secretary of State for Transport [2020] PTSR 1446, at paragraphs 68 and 75 to 79, which were not doubted by the Supreme Court in the same proceedings ([2021] PTSR 190)). When exercising its supervisory function, the court will apply the normal Wednesbury standard, not a heightened standard such as “anxious scrutiny” (cf. R. v Ministry of Defence, ex parte Smith [1996] Q.B. 517, and R. (on the application of Mahmood) v Secretary of State for the Home Department [2001] 1 W.L.R. 840). It is well-established that such a heightened standard will apply only where fundamental rights or constitutional principles are at stake (see the judgment of Lord Carnwath in Kennedy v Charity Commission [2014] UKSC 20, at paragraph 245, and the first instance decision in R. (on the application of McMorn) v Natural England [2015] EWHC 3297 (Admin), at paragraphs 204 and 205). Given the demanding requirement inherent in regulation 63(5) – for the competent authority to ascertain that the project “will not adversely affect the integrity of the European site” – the court’s examination of the authority’s performance of its duty will be suitably exacting within the bounds of its jurisdiction. But it should be remembered that the autonomous approach of the domestic courts in judging the lawfulness of such action has been explicitly approved by the CJEU (see the judgment of this court in Plan B Earth, at paragraphs 74, 75 and 137, discussing the CJEU’s decision in Craeynest v Brussels Hoofdstedelijk Gewest(Case C-723/17) [2020] Env. L.R. 4). (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 (see the judgment of Sales L.J. in Smyth, at paragraph 84, and the first instance judgment in R. (on the application of Preston) v Cumbria County Council [2019] EWHC 1362 (Admin), at paragraph 69). The authority may lawfully disagree with, and depart from, such advice. But if it does, it must have cogent reasons for doing so (see the judgment of Baroness Hale in R. (on the application of Morge) v Hampshire County Council [2011] 1 W.L.R. 268, at paragraph 45, the judgment of Sales L.J. in Smyth, at paragraph 85, and the first instance judgment in R. (on the application of Prideaux) v Buckinghamshire County Council [2013] Env. L.R. 32, at paragraph 116). And the court for its part will give appropriate deference to the views of expert regulatory bodies (see, for example, the judgment of Lord Justice Beatson in R. (on the application of Mott) v Environment Agency [2016] 1 W.L.R. 4338, at paragraphs 69 to 77). (5) When provided with expert evidence in a claim for judicial review, the court will not substitute its own opinion for that of the expert. As this court emphasised in R. (on the application of BACI Bedfordshire) v Environment Agency [2020] Env L.R. 16, at paragraph 87, “[unless] there is clear evidence revealing a failure of … expertise – for example, some conspicuous factual or scientific error – the court is entitled to conclude there was no such failure”

“The council’s conclusion on the crucial question under regulation 63(5) was, ultimately, an evaluative judgment for it to make as “competent authority”

“More generally, it seems to me that the judge adopted the correct approach in his consideration of the council’s appropriate assessment as a whole. He understood that the Wednesbury standard of review had to be deployed with suitable rigour in the legislative context here. He knew that he had to establish whether, in all the circumstances, the council had reached a reasonable and lawful conclusion, as a matter of its own exercise of evaluative judgment, in ascertaining whether the high threshold set by regulation 63(5) had been surmounted. He applied an appropriately intense standard of scrutiny, consistent with the proper application of Wednesbury principles in the light of the jurisprudence to which he had referred.”

“82. Here, the natural and conventional approach to the “have regard” duty is that it means that the Environment Agency is obliged to take account of the requirements of the Habitats Directive but may depart from its requirements if there is good reason to do so. In other words, it must take account of the Habitats Directive but is entitled not itself to discharge all of the requirements of the Directive where that can be justified. 83. It is, however, relevant (when considering whether a departure can be justified) that the object of the “have regard” duty is “requirements” rather than advice or guidance. Advice or guidance is not, ordinarily, mandatory. “Requirements” more usually are mandatory. The “requirements” are set out, in mandatory terms, in a Directive which the Regulations themselves transposed. In this context, there is not the same broad scope for taking something into account, but then deciding for good reason to depart from it, as there is in the case of non-binding guidance. 84. There is an important part of the regulatory context which helps explain the different language as between regulations 9(1) and 9(3). Regulation 9(3) is concerned with a “competent authority”

“The focus of planning policies and decisions should be on whether proposed development is an acceptable use of land, rather than the control of processes or emissions (where these are subject to separate pollution control regimes). Planning decisions should assume that these regimes will operate effectively. Equally, where a planning decision has been made on a particular development, the planning issues should not be revisited through the permitting regimes operated by pollution control authorities.”

“Many major developments, particularly the kind of projects that are listed in Annex I to the EIA Directive, are not designed to the last detail at the environmental impact assessment stage. There will, almost inevitably in any major project, be gaps and uncertainties as to the detail, and the competent authority will have to form a judgment as to whether those gaps and uncertainties mean that there is a likelihood of significant environmental effects, or whether there is no such likelihood because it can be confident that the remaining details will be addressed in the relevant regulatory regime. In paragraph 38 of his judgment in R(Jones) v Mansfield District Council [2024] 2 P & CR 14, Dyson LJ (as he then was) adopted paragraphs 51 and 52 of the judgment of Richards J. (as he then was) which included the following passage: “It is for the authority to judge whether a development would be likely to have significant effects. The authority must make an informed judgment on the basis of the information available to it and having regard to any gaps in that information and any uncertainties that may exist, as to the likelihood of significant environmental effects. Everything depends on the circumstances of the individual case.”” “It is for the authority to judge whether a development would be likely to have significant effects. The authority must make an informed judgment on the basis of the information available to it and having regard to any gaps in that information and any uncertainties that may exist, as to the likelihood of significant environmental effects. Everything depends on the circumstances of the individual case.””

“90. I have already summarised the considerations to which the defendant had regard in deciding that the provision by NWL of additional water sources for Suffolk is not part of the Sizewell C project. There is no basis upon which the defendant’s evaluative judgment can be said to be irrational. 91. .…The need for the supply of utilities such as water is common to many, if not all, forms of development. A utility company’s need to make additional provision so as to be able to supply existing and new customers in the future does not mean that that provision (or its method of delivery) is to be treated as forming part of each new development which will depend upon that supply. The consequence would be that where a new supply has yet to be identified by the relevant utility company, decisions on those development projects would have to be delayed until the company is able to define and decide upon a proposal. That approach would lead to sclerosis in the planning system which it is the objective of the legislation and case law to avoid ….”

“Other environmental regimes 106 The further reason given by the developer and accepted by the council for confining the assessment to direct GHG emissions from sources within the well site boundary was that the council should not concern itself with emissions that will occur “downstream” when the oil produced from the wells is processed and used because such processes are regulated by other, non-planning regimes and the council “can assume that these regimes will operate effectively to avoid or mitigate the scope for material environmental harm” (see para 36 above). 107 Paragraph 122 of the developer’s environmental statement, which made this argument, quoted from the National Planning Policy Framework (July 2018), paragraph 183, which stated: “The focus of planning policies and decisions should be on whether proposed development is an acceptable use of land, rather than the control of processes or emissions (where these are subject to separate pollution control regimes). Planning decisions should assume that these regimes will operate effectively. …”

“72. Dr Wolfe submits, both from the evidence of Mr Watson and the wider supporting material for the policy, that the spreading of chicken manure is causing environmental harm, or at the very least is causing the risk of environmental harm. That is the case despite the fact that there is a regulatory regime in place to protect water quality. It is not necessary to assume that another regulatory regime works effectively when the evidence clearly establishes that it does not do so. He relies on Thornton J’s summary of the relevant approach in Vanbrugh Court Residents’ Association v London Borough of Lambeth [2022] EWHC 1207 (Admin) at [23]: “[A] local planning authority is entitled to place reliance upon the effective operation of the other regulatory regime(s) in determining an application for planning permission. However, it cannot simply ignore the issues in question. It must assess them sufficiently so as to be able to satisfy itself that the other regulatory regime is capable of regulating the relevant issues. If it is not satisfied, then consent must be refused. The existence of the other regulatory regime is a material planning consideration, to be weighed in the balance. Gateshead MBC v Secretary of State for the Environment 1995 Env. LR 37 at [44] & [49] and R(Bailey) v Secretary of State for Business, Enterprise & Regulatory Reform [2008] EWHC 1257 (Admin) at [13]).” …… 81. …..It is apparent from the Recitals and Article 13 of the WFD that the overall purpose of the WFD is to reduce and prevent environmental harm. The exclusions to the definition of waste in Article 2(1)(f) is made expressly subject to no harm to the environment. An approach which assumed no environmental harm on the basis of a regulatory regime which beyond any doubt had failed to protect the environment from harm would be contrary to the statutory purpose. I note what is said at [194] of the 2023 NPPF, but to the degree that the LPA in adopting W3 are not assuming that the regimes will operate effectively, there is clear evidence to support their approach. There is therefore good reason, as set out copiously in the documentation, to depart from [194] of the 2023 NPPF.” “[A] local planning authority is entitled to place reliance upon the effective operation of the other regulatory regime(s) in determining an application for planning permission. However, it cannot simply ignore the issues in question. It must assess them sufficiently so as to be able to satisfy itself that the other regulatory regime is capable of regulating the relevant issues. If it is not satisfied, then consent must be refused. The existence of the other regulatory regime is a material planning consideration, to be weighed in the balance. Gateshead MBC v Secretary of State for the Environment 1995 Env. LR 37 at [44] & [49] and R(Bailey) v Secretary of State for Business, Enterprise & Regulatory Reform [2008] EWHC 1257 (Admin) at [13]).”

“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. See guidance on derogations at https://www.gov.uk/guidance/habitats-regulations-assessments-protecting-a-european-site 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.”

“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].”

“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 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.”

“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.”

“whether any such decision would be made in response to evidence that, is at present, is unknown”

“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.”

“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.”

“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.”

“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.”

“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.”

“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).”

“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.”