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On the edge of Buckingham in southern England, the quiet and leafy village of Maids Moreton, dotted with thatched cottages, is at the heart of a dilemma.

There is a plan – already granted permission – to add 153 new homes to the existing community of 350 houses, a medieval church and a pub.

But the local sewage works has been over capacity for years, and there is no sign of it being upgraded soon.

A choice is looming over what to do if the planned new homes are built.

Leave them standing empty, waiting for upgrades to the wastewater treatment system before they are connected?

Or connect them anyway and let people move in – contributing towards Buckinghamshire Council’s target for new homes, but increasing the sewage pollution of the nearby river, the Great Ouse?

“You wouldn’t dream of building a house that you couldn’t connect to electricity, or that was never going to connect to a road. But for some reason we’re building houses that have nowhere to treat the sewage,” says Kate Pryke, one of the local residents campaigning to prevent the development being built.

Maids Moreton’s dilemma is an increasingly common one across England – as ageing sewage works, water industry under-investment and chronic pollution in many areas appear to threaten the government’s ambitious plans to build 1.5 million homes this parliament.

About 30 miles away in Oxford, concerns over sewage capacity led to the Environment Agency objecting to all new development, placing up to 18,000 new homes in limbo. It led a group of developers, including some of Oxford University’s colleges, to describe the city as “uninvestable”.

Overdue upgrades to Oxford Sewage Treatment Works have now been agreed allowing new homes to be built and occupied from 2027.

“We think the problem is rife across England and Wales,” says Justin Neal, solicitor at Wildfish, an environmental charity that campaigns against river pollution.

The charity has been granted permission for a judicial review at the High Court, challenging Buckinghamshire Council’s decision to grant planning permission for the Maids Moreton development.

It says the case goes to the heart of the gap between plans for new housing and the capacity of the existing sewage infrastructure.

The area is “a good example of where too many houses have been put in”, and as a result the local sewage works – Buckingham Water Recycling Centre – “won’t be able to deal with all the sewage that’s going to it,” says Mr Neal.

He says sewage from the Maids Moreton development would likely end up being discharged into the Great Ouse as a result, “a river which is already suffering from pollution”.

“We hope that people start listening, particularly in government, and the ministers start thinking, ‘Well, maybe there is a way around this.’ And it’s to put more pressure on water companies to make sure that they have capacity.”

The water companies – along with the regulator Ofwat and the Environment Agency – decide when and where sewerage investment will be made. While this should take account of future housing need, there is no way for a local council or developer to influence investment decisions directly – or even pay for the extra capacity.

In Maids Moreton, Anglian Water stated in planning documents 10 years ago that Buckingham Water Recycling Centre did not have any capacity for new development.

Since the site was flagged as being at capacity in 2015, planning permission has been granted for about 1,500 homes in and around Buckingham, hundreds of which have already been built and connected to the over-capacity treatment works.

Sewage pollution is listed by the Environment Agency as one of the reasons the Great Ouse is failing to achieve “good ecological status”.

Last year the treatment works released sewage into the river for a total of 2,001 hours – the equivalent of more than two-and-a-half months non-stop – although Anglian Water claims this is not related to site capacity.

“They don’t even have the money to upgrade it for the housing that’s here. The idea that one day it will be upgraded to cope with all the growth is just a pipe dream,” says Mrs Pryke.

It wasn’t supposed to be this way. Environmental policies in the area’s local plan to protect rivers led to a planning condition that developers have to prove that “adequate capacity is available or can be provided” at wastewater treatment works.

But in the Maids Moreton case, no capacity upgrades have been carried out and there are none currently planned. There was provisional funding to upgrade the capacity of the works between 2020-25 but it was reallocated to priority schemes elsewhere in the region.

“We are currently reviewing and prioritising our growth portfolio for delivery over the next five years,” Anglian Water said, but the company did not respond to questions about whether the upgrades to Buckingham sewage works would take place before 2030.

Unable to meet the planning condition about sewage capacity, the developer – David Wilson Homes South Midlands, part of the UK’s largest housebuilder Barratt Redrow – applied to amend it so construction could start and the council agreed.

“Under pressure from the developer, they’ve watered this down, and it means that these houses can now be built without paying attention to whether or not the sewage works has capacity,” says Mr Neal from Wildfish.

“What we need is proper joined-up thinking where there should be no development unless there is capacity.”

Buckinghamshire Council’s cabinet member for planning Peter Strachan said the local authority “follows the planning process rigorously” and it has made the new homes subject to “a condition preventing any part of the development from being occupied unless and until confirmation has been provided to the council that wastewater upgrades have been completed”. He added “it is not appropriate for the council to comment further” because of the legal challenge.

Occupation clauses like the one imposed by the council are known as “Grampian conditions”, after a 1984 court case, and are often used when work is required that is beyond the developer’s control. They are increasingly common as local authorities grapple with the challenge of building new homes in areas where the sewage works are at capacity.

However, once homes with planning permission are built, water companies are obliged to connect them to the sewage network, regardless of its capacity.

“The very idea that they are going to sit empty for months, possibly years without being occupied because there’s a condition that hasn’t been met is an utter nonsense,” says Kate Pryke. “And in any event the council will have no interest in enforcing that condition.”

Neither the council nor the developer answered the BBC’s questions about when they expect Buckingham sewage works to be upgraded and how long they would be prepared for the newly built houses to remain unoccupied.

But the developer said it would “ensure a programme of any wastewater upgrades required to support the development has been agreed with Anglian Water”. On the development site itself, the company said there will be “at least a 10% uplift in biodiversity” with the installation of “bat and bird boxes and hedgehog highways”.

The BBC also asked the Ministry of Housing, Communities and Local Government what should happen in areas where new homes are needed but where there is no available sewage capacity in the foreseeable future – and also whether Buckinghamshire Council had been right to grant planning permission in Maids Moreton.

A government spokesperson said: “Councils must consider sewerage capacity as part of their housebuilding plans and, through our Independent Water Commission, we will clean up our waterways by making sure planning for development and water infrastructure works more efficiently.”

The judicial review could take place later this year. If the charity is successful it could stop the Maids Moreton development going ahead and place future housebuilding in the area in doubt.

It comes at a time when the government says it is “turbocharging growth” and overhauling the planning system – with Chancellor Rachel Reeves promising to reduce “environmental requirements placed on developers when they pay into the nature restoration fund… so they can focus on getting things built, and stop worrying about bats and newts”.

Mr Neal says the charity’s legal case, however, is not about “newt-hugging” or “people caring for fish more than they do for people who are homeless” – but about development being held back by the lack of capacity in sewage works.

“The solution is not to take away the laws that give the environment protection, but to build better sewage works that actually do their job properly.”