Anglian Water has admitted to Norfolk County Council that its investment plan was drawn up before the government raised housing targets, leaving a funding gap for the water infrastructure needed to support new developments across the county.

The company told the Infrastructure and Development Select Committee on 10 September that it has set aside £158 million to reduce phosphorus levels at water recycling centres — but that money does not account for the extra demand that additional housing growth will create.

Councillors raised particular concern about the capacity of water recycling centres to cope with planned development, including at Grimston, and the potential impact of increased discharges on local rivers.

Anglian Water said it had taken a more proactive approach to planning applications, seeking appropriate conditions even though it is not a statutory consultee in the planning process. However, the company acknowledged that its business plan had not been updated to reflect the higher housing numbers.

The committee also heard concerns about pollution in the River Ouse at South Lynn during the summer, including discharges from storm drainage and storm overflows and their potential effect on nutrient neutrality and biodiversity. Anglian Water agreed to provide a written response on those incidents and on planned investment in Clenchwarton.

The revelations come as Norfolk faces pressure to deliver more new homes while also improving the quality of its rivers and coastal waters. Nutrient neutrality rules, which restrict development where water quality is at risk, have already stalled planning permissions in parts of the county in recent years.

Anglian Water is currently contributing to the government's consultation on the forthcoming Water Bill, which is expected to introduce significant regulatory reforms to the industry.