Their policy is potentially unlawful. This is copied from the gov.uk guide on implementing the Equality Act 2020 for transgender people:
Separate and single-sex services
In general, if you are an organisation that provides
separate or single-sex services for women and
men, or you provide your services differently to
women and men, you should treat transsexual
people according to the gender role in which they
present. However, in limited circumstances, treating
transsexual people differently may be lawful. You
will only be able to do this where you are fulfilling
a legitimate objective in a fair and reasonable way.
You will need to show that a less discriminatory
way to achieve your objective was not available. You
should therefore consider the type of service being
provided, the facilities available, the views of the
transsexual person, the stage of their transition and
the effect on other service users.
Example - A women’s sexual abuse crisis centre receives a request for support from
Alice, a transsexual woman. The centre
usually provides group support sessions,
but Alice is still in the early stages of
gender reassignment and the centre is
concerned that other female service
users might feel that her presence
affects the benefit of the group sessions
for them. The centre decides to offer
one-to-one support to Alice at home.
This different treatment is likely to
be lawful because it enables the crisis
centre to fulfil its legitimate objective
of providing all service users with a safe
and supportive counselling environment
in a fair and reasonable way.
Ironic that that is the example given, given Sarah's case in Brighton!