The council and the Highways Agency, which owns the land, blame each other for the inaction.
Simon Browne, of Benfield Way, Portslade, which backs on to the site, said: “The council has been hopeless in doing anything about this.
“It’s been passed from department to department and no one seems to want to take responsibility.”
The Argus understands there are two different camps on the site.
One is made up of about four tents and plastic sheets hung from the trees, with bikes, chairs and beds under the shelter. A joke sign outside says “CCTV in operation”.
No one was there yesterday when The Argus visited but locals claim those living on site are central Europeans who work on a farm near Uckfield.
Some neighbours have complained about antisocial behaviour and littering on the open space.
The city council said it cannot take action as it is not the landowner. However the Highways Agency said because it formed part of the local road network, enforcement was the local authority’s responsibility.
After months of correspondence, locals said the Highways Agency wrote to the council in December to say “their file is closed”.
A council spokesman said: “We do not accept the Highways Agency’s view, and have repeatedly contacted them to make this point to them.
“We are now exploring legal action through planning enforcement that will hopefully enable us to compel the Highways Agency to acknowledge their responsibilities.”
He added the city’s rough sleeper outreach team visits regularly to offer advice and support about accessing services.
Hove MP Mike Weatherley, who has been lobbying for action to be taken for 18 months, said he was disappointed at the length of time it had taken.
Councillor Dawn Barnett, who represents the area to the east of the camp, said: “I would rather they were not there and surprised they have been left there as long as they have. But where are they going to move them to?”
The Highways Agency was not available for comment at the time of going to press.
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