Housing Development Planning: Water Companies

David Reed Excerpts

Wednesday 12th March 2025 Westminster Hall

[David Reed (Exmouth and Exeter East) (Con)]

It is a pleasure to serve under your chairship, Mrs Lewell-Buck. I thank the hon. Member for North Shropshire (Helen Morgan) for securing this important debate. This is an issue on which I hope we can find cross-party consensus and bring about the meaningful and effective change that we and our constituents badly want to see in the water industry.

I start with a case study from my constituency that illustrates the problematic nature of how the current planning framework operates in relation to water companies. Cranbrook is a rapidly growing new town in east Devon: the 2021 census recorded just 6,700 people, but the local council is proposing to grow the town to 8,000 homes, which will accommodate around 20,000 people. During the planning phase for the town, our local water company, South West Water, promised a dedicated sewage pumping station to treat waste locally and prevent the overloading of existing infrastructure.

However, South West Water has since scrapped the proposed pumping station, and instead redirects Cranbrook’s waste six miles away to the Countess Wear sewage treatment works in Exeter. Countess Wear is already under pressure and suffers regular sewage spills into our beautiful River Exe. It does not take big brains to work out that, at Cranbrook’s projected growth rates, the current plan is unsustainable at best and dangerous at worst. If local politicians and pressure groups had known at the time that South West Water would not make good on its promise or be held accountable, I should imagine that objections to the town being built would have been louder and more persistent.

As we all know, this Labour Government have committed to building 1.5 million new homes in this Parliament, yet they have not adequately explained how they will ensure that infrastructure will keep pace with development. With multiple proposals for new housing in my constituency, as well as proposals for a new town—in addition to Cranbrook—I fear that the same avoidable mistake will happen to my home twice. For the record, I am not against house building, but I am against house building that is delivered without the corresponding infrastructure.

The issue of water infrastructure planning has long been overlooked, yet it is crucial to ensuring that new housing developments do not lead to avoidable environmental and public health disasters. As we have heard, water companies are not statutory consultees in the planning process. Their role is limited to local plan development, meaning that they often engage far too late, once planning applications are well under way. This lack of early involvement leads to delays, unco-ordinated infrastructure and, ultimately, a failure of accountability when things go wrong.

To offset that flaw in planning law, local councils are resorting to other mechanisms to force compliant behaviour from water companies. We have heard about Grampian conditions, which are designed to prevent development from proceeding until certain infrastructure requirements are met. However, they do not force water companies to deliver the necessary infrastructure. If a water company delays investment, a development can be stalled indefinitely —or, worse, proceed without proper infrastructure, leading to sewage overflows and environmental damage.

We have heard about section 106 agreements, which are legally binding and require developers to fund infrastructure projects. However, water companies are not legally required to use these funds for local improvements, meaning that money intended for vital infrastructure could be diverted elsewhere.

[Mr Bayo Alaba (Southend East and Rochford) (Lab)]

Water companies have a responsibility to the community they are in and the developments that they play a part in. I am keen to hear from the Minister what the Government’s reforms will do to encourage water companies to be front and centre on plan-making and infrastructure building.

[David Reed]

I too want to hear from the Minister what plans he has to make sure that infrastructure keeps pace with development.

The community infrastructure levy is another funding mechanism, but CIL revenue is stretched across multiple infrastructure needs, and not all funds go towards water and the sewerage system. The local plans allow local councils such as mine, East Devon district council, to set policies to ensure sustainable development. However, the policies depend on voluntary co-operation from water companies and developers. If a water company refuses to engage early, the council lacks the full picture when making planning decisions. Developers can also challenge infrastructure requirements if they increase costs, which leads to weak enforcement.

Given these issues, I argue, as other Members have, that water companies must become statutory consultees in planning applications. That would mean that developments could not proceed unless water companies confirm that infrastructure is in place to support them. The case of Cranbrook in my home area demonstrates the consequences of failing to integrate water infrastructure planning with house building. If we do nothing, we will see similar issues arise across the country, with more communities left to suffer the consequences of inadequate water and sewerage systems.

--- Later in debate ---

[The Minister for Housing and Planning (Matthew Pennycook)]

It is a pleasure to serve with you in the Chair, Mrs Lewell-Buck.

I begin by congratulating the hon. Member for North Shropshire (Helen Morgan) on securing this important and informative debate, and on not only clearly articulating a number of legitimate concerns about the role of water companies in planning for new residential development but eloquently outlining the plight of her constituents in the cases that she mentioned. In addition, I thank the other hon. Members who have participated in the debate and shared valuable insights and experiences from their own constituencies.

I know and appreciate the various concerns that have been raised about the issue, and I also recognise the strength of feeling. I hope that in my remarks I will convey both that the Government have already acted in numerous respects and that we are alive to the need to do more to address the fact that in many parts of the country the system is clearly not delivering the outcomes that we want to see.

A number of distinct issues were raised during the debate and I will seek to address as many of them as possible in the time that I have available. As ever, if I overlook any specific issues that hon. Members raised, I would be more than happy to find time to discuss them outside the Chamber, and to speak more widely to the group of hon. Members who are here today and others who have concerns about this issue.

I will start by talking about the principle of sustainable development, as set out in paragraph 7 of the national planning policy framework, which states:

“The purpose of the planning system is to contribute to the achievement of sustainable development, including the provision of homes, commercial development and supporting infrastructure in a sustainable manner.”

The framework goes on to state:

“Planning policies and decisions should play an active role in guiding development towards sustainable solutions”.

It also says that sustainable development should be pursued both through the preparation and implementation of local development plans, and the application of policies in the framework. In short, the Government are clear that housing must come with appropriate infrastructure, including appropriate water infrastructure.

A number of Members mentioned sustainable drainage systems, including the hon. Member for North Shropshire. Hon. Members will know that the revised NPPF that we published on 12 December last year makes it clear that developments of all sizes should use sustainable drainage techniques when the development could have drainage impacts and should have appropriate maintenance arrangements in place. These are important changes to the NPPF that will mean that sustainable drainage technologies are taken up more widely in new development. We continue to explore whether more needs to be done, either through planning policy or by commencing schedule 3 to the Flood and Water Management Act 2010, and a decision on the best way forward will be made in the coming months.

On a related matter, I appreciate that there are some instances of existing sewers not being able to cope adequately with new developments; we have heard a number of pretty troubling examples of that this afternoon. To avoid that issue, the planning practice guidance sets out that good design and mitigation measures should be secured during development, both through site-specific and non-site-specific policies on water infrastructure. For example, it suggests using planning conditions and obligations to ensure that development is phased and not occupied until the necessary waterworks have been completed. I would be very interested to hear from hon. Members who said that some local authorities are not using those conditions and obligations as to why that might be the case. However, I will give further thought to the issue in light of the various examples that have been referred to today.

The hon. Member for North Shropshire and other hon. Members rightly mentioned the role of local plans in delivering sustainable development. Planning is principally a local activity and the Government are clear that the plan-led approach is, and must remain, the cornerstone of the planning system. We are determined to progress towards universal local plan coverage. As the Deputy Prime Minister and I have repeatedly made clear, we will not hesitate to use the full range of ministerial intervention powers at our disposal to that end.

A key function of local development plans is to guide development to the most suitable and sustainable locations and to ensure that the associated infrastructure requirements are addressed. As hon. Members are aware, water companies are under a statutory duty to provide new water and sewerage connections to residential properties, as well as planning to meet the needs of growth as part of water resource management plans, and drainage and wastewater management plans. The water resources planning guidance published by the Government set out how those companies should forecast demand for water based on existing customers and planned levels of household and non-household growth, with the number of planned developments being based on published local plans, but I note the comments of the shadow Minister, the hon. Member for Hamble Valley (Paul Holmes), about how the operation of that system might be improved.

Effective co-operation early in the plan-making process is essential to ensuring not only that housing and infrastructure need is appropriately planned for, but that they are aligned with each other. The national planning policy framework makes it clear that local planning authorities should collaborate with each other and with other public bodies, including infrastructure providers, to identify relevant strategic matters to be addressed, including providing for sustainable water supplies. I have heard and noted the concerns of hon. Members that, despite the Government’s very clear expectations in this regard, such collaboration is not always evident and I will reflect on the implications of that for national planning policy.

We are very clear that the statutory consultee system is not operating effectively. We have been told as much not only by house builders, but by local planning authorities from across the country. Hon. Members will be aware that the Chancellor and the Deputy Prime Minister have imposed a moratorium on new statutory consultees. I also draw the House’s attention to my written statement on Monday setting out how the Government intend to reform the statutory consultee system to ensure it operates effectively, including consulting on limiting the scope of statcons to where advice is strictly necessary and removing entirely a limited number of them.

I have heard the calls made today—organised calls, I might infer—from Lib Dem Members to add water companies to the list of statutory consultees. I gently say to hon. Members that I do not think this is the panacea that they imply it is. Indeed, I think that doing so would risk allowing water companies to argue against the delivery of new homes, rather than focusing on their responsibility to ensure the appropriate infrastructure is in place at the outset. That is why it is important that, although water companies are not statutory consultees on individual planning applications, statute requires that they are consulted in the preparation of local plans. That is because strategic issues such as water capacity are best dealt with at a strategic level through the plan-making process, rather than through individual planning applications.

Ensuring that we take a strategic spatial planning approach to the management of water, including tackling pollution and managing pressures on the water environment at a catchment, regional and national scale, is a core objective of the ongoing independent review into the regulatory system of the water sector, launched in October 2024 by the UK and Welsh Governments. As I hope hon. Members are aware, the commission is expected to report by the second quarter of next year and I know hon. Members will engage with it.

The Government are acutely aware that the sustainable supply of water in some areas—for example, Cambridge and north Sussex—is an immediate constraint on growth and we are tackling that in various ways. For example, in those instances, we work closely with local authorities, regulators and water companies to find creative solutions to unlock growth and address environmental pressures. Our work in Cambridge to address water scarcity, for example, has already helped to unlock applications for over 9,000 homes and 500,000 square metres of commercial space, and similar initiatives are possible in other areas.

The hon. Member for North Shropshire and a few other hon. Members drew our attention specifically to section 104 agreements outlined in the Water Industry Act 1991. Developers and water companies can enter into these voluntary agreements, which, where they work, ensure that newly constructed sewers, first, are built to an appropriate standard and, secondly, become the responsibility of the local water company for maintenance once they are operational, but I have heard and note the critiques that have been made. If hon. Members will indulge me by putting to me in writing some of the cases that have been specified this afternoon, I would like to look into the matter further to see whether the system needs improvement in various ways.

As I have the time, I will speak briefly about two other issues: first, the Planning and Infrastructure Bill. Alongside targeted local interventions, the Government are taking steps to ensure that we can more quickly and effectively upgrade major economic infrastructure across the whole country, including water supplies. In last year’s Budget, the Government confirmed their commitment to delivering a new 10-year infrastructure strategy, providing more certainty and stability for the supply chain and helping to unlock private investment by setting out the Government’s vision, objectives and priorities for infrastructure over the next decade.

Additionally, hon. Members will know that yesterday we introduced our flagship Planning and Infrastructure Bill. One of the Bill’s five overarching objectives is to deliver a faster and more certain consenting process for critical infrastructure, including vital water infrastructure, through streamlining consultation requirements for nationally significant infrastructure projects, ensuring that national policy statements are kept up to date—hon. Members will know that some of them date back to 2012—and reducing opportunities for judicial review. I encourage and welcome the engagement of hon. Members from across the House as that legislation progresses.

[David Reed]

I hear the points that the Minister has made. Will he confirm that his Department is not going to make water companies statutory consultees in the planning process?

[Matthew Pennycook]

I cannot be clearer than I was in my written statement: the Chancellor and Deputy Prime Minister have imposed a moratorium on new statutory consultees. We do not think that the system is operating effectively—as I said, local authorities and house builders are telling us as much. Water companies have a statutory role in the local planning consultation process, and they can provide their view on any application: not being a statutory consultee does not prevent them from doing so.

I want briefly to comment on water quality and pollution. Beyond the provision of water infrastructure, we are facing challenges in maintaining the quality of our water because of ever-increasing pressures from pollution, climate change and unsustainable practices. This Government are prioritising water quality as a key element of our environmental and public health agenda. Significant steps are being taken to address pollution, enhance infrastructure, and ensure clean and sustainable water sources for future generations. For example, as part of our efforts to create a plan-led system that is underpinned by a genuinely accessible and understandable policy framework, we intend to consult on and produce a set of national policies for decision making later this year. It will include policies on topics such as pollution, plan making, healthy and safe communities, and the delivery of homes, and how all of that interlinks. Further details will be announced in due course.

The Government are also working with farmers to reduce agricultural pollution. The Environment Act 2021, introduced by the previous Government, set a legally binding target to reduce nitrogen, phosphorus and sediment contribution from agriculture by at least 40% by 2038. That is why, alongside developing a new statutory plan to restore nature and meet these targets, we are enforcing key regulations, such as the farming rules for water, and have carried out thousands of inspections through the Environment Agency.

I underline that the Government expect sustainable development to be pursued both through the effective preparation and implementation of local plans and through the application of relevant national planning policy. As a Government, we have already taken, and will continue to take, steps to ensure that new housing developments have adequate water and waste water infrastructure as a matter of course. I have heard the concerns of the hon. Member for North Shropshire and other hon. Members about what more may be required to ensure that that is the case, and I assure all those who have participated in the debate that their concerns will be at the forefront of my mind as we continue to progress our planning reform agenda.

English Devolution and Local Government

David Reed Excerpts

Wednesday 5th February 2025 Commons Chamber

[Angela Rayner]

I totally understand the concerns that my hon. Friend raises on behalf of his constituents in Erewash, and the situation that Derbyshire county council faces. We put £1 billion into SEND, and we have increased funding for local authorities. We recognise the pressure; I think it is fair to say that SEND comes up significantly in this Chamber. We are working, hopefully on a cross-party basis, to deliver for children with special educational needs and disabilities. We heard only this afternoon during Prime Minister’s questions about families who are really concerned about the lack of services and support, and we will continue to deliver for them.

[David Reed (Exmouth and Exeter East) (Con)]

I thank the Secretary of State for finally confirming that elections will go ahead in Devon. However, we had been told that, if we were not selected this time round, devolution would be imposed on us. Will the Secretary of State please give an explanation to my constituents in Exmouth and Exeter East of what that imposition will look like?

[Angela Rayner]

We signed the devolution deal for Devon just this week, and are working to go forward. I welcome the hon. Member’s comments on the certainty that we are delivering. This is the start of a process. We will continue to work with local leaders, including Members of Parliament from across the House who have interests in their local area, to deliver better public services and push power down from Westminster into local areas so that they can unleash the opportunities around transport and skills that we are determined to deliver for the people of Devon.