Supplementary memorandum submitted by
Water UK
The following supplementary evidence covers
some specific actions that have arisen since your inquiry commenced
and the two areas where further information was requested, namely
the UKWIR costs report and Water UK's views on the planning process
required for Water Framework Directive implementation.
1. RECENT DEVELOPMENTS
— The increased dialogue between Water
UK and Defra over the WFD, which has in part been precipitated
by your inquiry, has resulted in a number of positive developments.
— Another meeting of the stakeholder
sounding group has been held.
— Water UK has had initial discussions
on a co-ordinated approach to publicising the benefits and requirements
of the Directive with Defra, the EA and other stakeholders. Water
UK is developing a media plan to publicise the Directive which
it will share with others.
— During Spring 2003 Water UK and UKWIR
will be holding a joint event with ADAS to take stock of the current
research on diffuse pollution. We are involving Defra closely
with this initiative and we are intending for the work to contribute
to their diffuse pollution work programme.
— Water UK is considering setting up
a web-portal for local catchment groups. This will act as a database
of information and contacts for groups and individuals wanting
to set up local groups, again we will be involving Defra closely
in this work as it may help with the implementation of Article
14.
— Water UK is gathering information
on structures of catchment management and organisation, mainly
from our contacts in the European water industry. We will be submitting
this information to Defra and where possible arranging meetings
with key European experts to share knowledge with Defra. It is
our understanding that WWF and RSPB are doing similar work and
we will be liaising with them on this issue.
— We are delighted that Defra have,
as a result of your inquiry, announced the Environment Agency
will be undertaking a pilot study on the River Ribble and Water
UK and United Utilities will be offering as much assistance as
possible to aid the progress of this pilot.
— Ofwat has indicated that water companies
will be able to include the monitoring and observation costs associated
with the Water Framework Directive in the next price review.
— Water UK and UKWIR have met economists
from RSPB, Defra and EA, to discuss the details of the UKWIR costing
report. As a consequence we will be making changes to the report
and including a prescript in conjunction with the other stakeholders.
2. COSTS AND
THE UKWIR REPORT
2.1 General points
UK water industry research (UKWIR) is currently
finalising a report on the potential costs associated with achieving
good water status under the water framework directive.
Since the submission of the draft report to
the Select Committee we have held meetings with Defra, Environment
Agency and RSPB economists. These meetings have highlighted a
number of areas for minor revision or clarification, most of these
relate to the underlying assumptions of the economics.
However the key change relates to the context
and title of the report. We will be working with Defra, the Environment
Agency and RSPB to ensure that the report is seen in the correct
context.
The costs indicated in the UKWIR report relate
to the potential costs that water industry customers would face
in order for the water industry to deliver the good status required
in the Water Framework Directive from the current position.
The report assumes the absence of a regulatory
and policy framework to deliver the Directive other than through
the water industry. This assumption was made as we have so far
seen no regulations or policies that will reapportion the costs.
Therefore the report gives a worst case scenario
of the possible cost drivers.
However, if the Government are able to devise
additional policies that reapportion the cost burden the costs
of the Directive will be considerably reduced for the water sector.
There will also be a portion of the costs that
are met within existing Directives. However, these costs were
not included in the initial RIA for these Directives.
Water UK's main concern over the cost of the
Directive is that the costs are reduced and the benefits are maximised.
We have discussed the report with Defra and
whilst there is some debate over the technicalities of the methodologies
we are both agreed that it would not be helpful for the headline
cost figures within the report to be publicised as they would
be reported out of context.
2.2 Key points
A number of key points have emerged that we
would like to bring to the attention of the EFRA committee.
(a) There are a range of drivers, primarily
in the shape of European Directives, that will contribute towards
the overall objective of achieving good water status in rivers
and coastal waters. The UKWIR research aims to capture overall
costs, irrespective of the driver.
(b) The existing investment programme between
2000-05 will improve the quality of the rivers and coastal waters
around the UK. This is taken as the baseline and the UKWIR report
does not attempt to take account of this investment.
(c) UKWIR will be taking into account points
raised by Defra, EA and Ofwat at a meeting to discuss the draft
report. The primary issues were:
— Allocation of costs to different
environmental drivers.
— Assumed timetable for expenditure.
— Assumptions about the quality
standards that sewage treatment works will have to achieve.
— Incremental costs associated
with the Water Framework Directive and incremental benefits.
(d) Water UK believes the report provides
a valuable contribution to the debate about not only the levels
of investment that may need to be made by the water industry,
but also the need to make the appropriate investment. One of the
key elements for efficient and effective investment will be to
identify and quantify all sources of pollution and implement appropriate
measures for control.
(e) The UKWIR report focuses on the water
sector. Investments to control sources of other polluting inputs
to the water environment of pollution such as industrial, agricultural
and urban run-off will need to be costed.
(f) The opportunities to reduce the overall
cost of pollution control within the water sector will be optimised
by using a broad range of policy instruments. The water industry
is engaging actively with a range of stakeholders to help explore
opportunities to integrate policies to deliver the most cost-effective
controls and thereby achieve good water status.
(g) It may be politically expedient to allocate
capital expenditure to different drivers such as the Urban Wastewater
Treatment Directive, Habitats Directive or Bathing Waters directive
to help minimise the overall capital costs attributable to the
Water Framework Directive. However, the UKWIR report attempts
to capture all potential capital investment that will contribute
to the overall objective of good water status. Water UK fully
supports this approach and believes it will help engender a transparent
debate on overall costs.
(h) The methodology adopted is more in-line
with a "one size fits all approach" rather than a risk-based
approach as advocated by the Environment Agency. Water UK fully
supports the concept of a risk-based approach but the costs highlight
where we could be pushed if some more extreme interpretations
of the drivers for good water status are put into effect. Our
concern is that the European Commission will continue to interpret
implementation in a way that leads to more rather than less investment.
(i) The costs and framework of analysis presented
in the report is intended to help inform the eventual scope and
timing of measures contributing to WFD objectives.
3. PROJECT PLAN
FOR IMPLEMENTING
THE WATER
FRAMEWORK DIRECTIVE
Member States must implement the Water Framework
Directive (WFD) according to a strict timetable set out in the
Directive. However, the requirements made are very broad and although
the EU is in the process of drafting guidance on actions needed
to implement these, via the Common Implementation Strategy, it
will be up to each Member State to plan in detail the actions
it will undertake. Given that the Directive has a wide ranging
remit covering all aspects of water management, Member States
will need to carefully co-ordinate these actions with those already
underway to implement existing water related directives, including
the Urban Waste Water Treatment Directive and the Integrated Pollution
Prevention and Control Directive.
To achieve full implementation of the directive
in the integrated and co-ordinated way that is intended, it is
essential that the UK has a full understanding of the actions
needed at a practical level, and how these relate to each other
and to actions under other policy initiatives. The tables below
use the broad milestones and timetables set in the Directive as
a template for a more detailed project plan for implementation
in the UK focussing on those actions needed in the next two years.
Table 1 provides Water UK's views on:
— the tasks, and where possible sub-tasks,
that will be needed to meet the Directive's requirements;
— the organisation(s) who should be
responsible for leading these tasks in the UK; and
— the timescales for starting and completing
the tasks in order to meet the milestones of the WFD and taking
into account the size of the task for the UK, and any inter-dependency
between tasks.
Table 2 sets out the timescales for the milestones
and tasks identified in Table 1. In both cases, milestones set
in the Directive are marked in bold text, tasks in normal text
and sub-tasks in italics.
We believe there are a number of areas needing
urgent action as follows:
— it is essential that the UK establishes
appropriate mechanisms to co-ordinate relevant institutions for
river basin management. If plans are to be implemented then the
mechanisms for establishing these need to be agreed by all those
whose powers may be affected. There are still many issues which
are unclear. Will voting systems be appropriate. Will the plans
have a statutory basis? How will the public be involved in making
decisions? Related to this is the issue of the competent authority,
we are still unsure whether the Agency in its current form has
sufficient powers to act as the competent River Basin District
Authority;
— we need to urgently characterise
and classify all water bodies using the best pressure, state and
impact data possible. This is ongoing but 2004 characterisation
is likely to only use existing data and make estimates where data
is not available. It will be difficult to produce accurate assessment
of risk from incomplete data sets. And any estimates needed to
fill data gaps will increase uncertainty and heighten the case
for caution, which may in turn lead to over implementation and
more monitoring in 2006. We need to act swiftly to identify and
fill as many data gaps as possible;
— the pilot river basin study to take
place in the Ribble has just been announced. We welcome this change
but we need to act quickly to plan the details of what the pilot
will involve, to consult on these plans and to implement them.
Every opportunity to maximise our understanding of the practical
implementation of the EU guidance documents should be taken with
the pilot river basin study. Defining the correct approach to
implementation during the pilot study will pay dividends in the
future; and
— we must draft a detailed plan of
implementation clarifying the relationships between the WFD planning
process and other processes. There are numerous other policies
provide the measures which will enable Water Quality Objectives
(WQOs) to be met including, Directives dealing with Bathing Waters,
Birds, Drinking Water, Seveso, Environmental Impact Assessment,
Sewage sludge, UWWT, Plant Products, Nitrates, IPPC, and Habitats,
as well as the EU's Common Agricultural policy, and the Water
Industry's investment programmes. We must make the most of what
is ongoing here rather than duplicate or in the worst case act
in conflict with the actions already ongoing.
Water UK
13 January 2003
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