Many Norfolk builders could be on the verge of going out of business because of the uncertainty caused by an ongoing ban on new housebuilding, senior officials have warned.
Phil Courtier, the lead planning manager at two local councils, said there was a "significant risk" of firms going bust, without a swift resolution to the problems which have seen Natural England impose a halt on new homes being built in large parts of the region.
The government body imposed the restrictions 10 months ago because of concerns that new homes were contributing to pollution in the River Wensum and parts of the Norfolk Broads, through nutrients in wastewater produced by households.
It says work cannot start again until builders and local authorities have come up with ways to address the issue, by achieving so-called 'nutrient neutrality'.
Mr Courtier made his comments in a report for South Norfolk and Broadland councils.
He wrote: "There is a significant risk that many of these small and medium-sized enterprises (SMEs) will go out of business if the granting of new planning permissions in these catchments does not get moving soon."
Separate concerns have also been raised about how the housebuilding ban is having an impact on employment opportunities for people in the construction industry.
Plans for thousands of new homes across Norfolk have been held up by the restrictions.
While larger developers may, in the future, be able to provide the mitigation required - for example by constructing new wetlands near housing to help 'neutralise' nutrients - Mr Courtier warned this was not possible for small-scale builders.
He said this could create a significant problem, with around 40pc of developers in Norfolk being classed as small or medium.
In a bid to resolve the issue, South Norfolk Council (SNC) has agreed to enter into a new joint venture, worked up with Norwich, Broadland, North Norfolk and Breckland councils, as well as Anglian Water.
It would see the introduction of 'environmental credits', that builders can buy, similar to the system used for carbon emissions, where businesses can buy the right to emit a set amount of CO2, to fund offsetting measures.
Mr Courtier argued these credits would help small builders to overcome the problems.
At a meeting on Monday, SNC council leader John Fuller said the credit system could "unleash" development which has been "hobbled" by the ban.
Officials from Natural England are still looking at the proposed solution.
South Norfolk MP Richard Bacon said he was “not surprised” to hear that businesses were at risk, with housebuilders contacting him about it frequently.
He said: “I have been in regular contact both with South Norfolk Council - who unfortunately are completely stymied by rules laid upon them by central government - and also pressing ministers about this for nearly a year. Houses are not pollution. They are places to live."
He added: “The question is whether anyone in government cares enough about SME housebuilding businesses going to the wall to get this fixed. At the moment I have no evidence that they do."
Barry Berry, chief executive of the Federation of Master Builders (FMB) - an association representing small and medium building firms - said members were being hampered by the ban.
"The announcement of the new nutrient credit system to offset impact mustn’t be too arduous for small and micro house builders."
IMPACT ON WORKFORCE
Separate concerns have also been raised that the lack of housebuilding has left young apprentices in limbo, unable to complete their portfolios.
Alison Thomas, an SNC cabinet member, said the ban has meant that there is not enough work for people employed by small building companies.
Speaking at Monday's cabinet meeting, she said: "It is the medium-sized builders who employ our local plumbers, electricians, bricklayers, the lads that go City College and do their apprenticeship with a local building company.
"These are the people that potentially have been laid off because of this [building] pause, which I think is very regrettable.
"I know of many apprentices who are yet to complete their apprenticeships because there is not enough activity in the business for their portfolio to be signed off.”
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