Memorandum submitted by the Royal Society
for the Protection of Birds
EXECUTIVE SUMMARY
1. The aquatic environment of England and
Wales is in a poor state, with over 50% of rivers and lakes suffering
from excessively high levels of phosphates and 30% from too much
nitrate. As a result, many plants and animals of previously healthy
waters are in decline.
2. Water company investment in environmental
protection and improvement will need to be an essential part of
the fourth periodic review of water pricing if we are to meet
the "good status" requirements of the EC Water Framework
Directive.
3. Despite having "cleaned up their
act" and removed crude pollution from our rivers and beaches,
water companies still have a major role to play in further improving
the water environment. More than half of the polluting levels
of nutrients present in our waters can be traced back to water
companies' sewerage discharges.
4. The RSPB supports the programme of environmental
protection and improvement put forward as part of the periodic
review by English Nature and the Environment Agency. This contains
nearly 500 actions directed specifically at wildlife and habitats.
5. Investing to protect and improve the
environment also improves people's quality of life, delivering
new opportunities for economic regeneration and leisure activity.
6. Ofwat and WaterVoice have focused to
an excessive degree on the scope and scale of the environment
programme, giving far greater scrutiny to this aspect of the price
review than to other major drivers of price increases.
7. Water company strategies for the review
show a short-sighted approach to environmental investment, with
many doing the minimum statutory requirement, and some not even
achieving that, omitting legally required water quality and water
resources measures.
8. We believe that the scheme costs put
forward by water companies are unnecessarily and unjustifiably
high in many cases. This has created hostility to the environment
programme from customer representatives and some parts of the
press.
9. We support innovative projects proposed
by United Utilities and Northumbrian Water, and hope that their
emphasis on achieving multiple benefits for drinking water, biodiversity
and river water quality through influencing the management of
catchment land becomes a central feature of future price reviews.
Such catchment schemes are in line with the objectives of the
Water Framework Directive.
INTRODUCTION
1. The RSPB works for the conservation of
wild birds and their environment. We are Europe's largest wildlife
conservation charity, with over one million members. We manage
one of the largest conservation estates in the UK, totalling more
than 125,000 hectares, including extensive freshwater and coastal
wetland habitat. Our priority wetland habitats are reedbeds, grazing
marsh and estuaries. We provide advice on the management of wetland
habitats, and input on a range of water policy issues including
water resources, biodiversity, water quality and flood defence.
2. Water and wetlands are fragile ecosystems,
dependent on the way we manage water. Whilst we have seen improvements
in some aspects of water quality, particularly sewage treatment
and industrial effluent discharge, UK wetlands and water are still
not managed sustainably. Many aspects of water and land management
impact negatively on wetlands. Not only have we lost most of our
wetlands through land drainage, but we continue to damage what
remains through drainage, pollution and water abstraction.
State of the Water Environment
3. Many rivers, lakes and streams remain
heavily polluted. The Environment Agency (EA) reports that more
than half of our rivers have high phosphate levels and more than
a third have high nitrate concentrations. This "nutrient
soup" has choked our freshwaters with algal blooms and had
a disastrous effect on plants and invertebrates—for example,
there has been a two-thirds crash in the abundance of insect life
in chalk rivers, with a serious knock-on impact on wild populations
of trout and salmon. Much of this nutrient problem arises from
sewerage discharges into watercourses, although the proportion
varies from catchment to catchment, with diffuse pollution from
intensive agriculture also making a significant contribution.
However, the contribution from sewerage discharges is proportionally
more significant as it is ever-present, and particularly highly
concentrated at times of low flows and during the growing season.
4. Our wetland wildlife is suffering as
the countryside dries out. While much of this is a consequence
of land drainage and flood defence policy and practice, the role
of water abstraction from surface and ground waters must not be
underestimated. The amount licensed for abstraction is a staggering
35 million megalitres per year, most of which is for water company
supply. There are some 500 rivers, wetlands and lakes on the EA's
register of sites at risk of damage from abstraction, and the
availability of water resources is a serious limiting factor in
the achievement of targets for habitat restoration and creation.
Populations of breeding wading birds are a good indicator of "wetness"
in our countryside, and the drastic decline of these birds outside
specially managed nature reserves (60% in snipe, 40% in lapwing
and 20% in redshank in lowland river valleys over the last 20
years) is a warning signal about the state of our water environment.
The environment programme
5. This periodic review is a major opportunity
to deliver much needed improvements to the aquatic environment
and to reverse the legacy of damage from water abstraction and
pollution. The environment programme developed by the EA and English
Nature would ensure that water companies contribute their appropriate
share to the cost of improving the health of our water environment:
for wildlife, people and the economy.
6. The RSPB fully supports the environment
programme. This is the first periodic review which could see substantial
investment made specifically for the benefit of designated sites
and biodiversity. There are 3,200 main actions (compared to 6,000
for PR99/AMP3 in 1998), of which nearly 500 are directed specifically
at wildlife and habitats. About half of the 3,200 actions are
statutory, with the others being government and policy commitments
open to Ministerial discretion. We consider these actions to be
milestones on the way to sustainable water management and the
achievement of EC Water Framework Directive targets.
7. The work outlined in the environment
programme would improve more than 6,500 kilometres of river and
more than 2,000 square kilometres of wetlands, lakes and coastal
waters. This would bring huge benefits for wildlife and improve
everyone's quality of life. Cleaning up and improving our water
environment will boost the economies of city and country alike,
as clean, healthy waters offer many opportunities for regeneration.
The EA has estimated that the benefits of this programme could
amount to between £5 billion and £8 billion, clearly
outweighing its costs.
Water company response to the environment programme
8. Water companies recently published public
versions of their business plans containing their preferred investment
strategies. Any review of these plans is hampered by their lack
of consistency—some water companies have outlined their
investment plans in transparent detail, but others are sketchy,
opaque and difficult to interpret.
9. For the purposes of water company costing
of schemes, the environment programme was split into two plans
or scenarios. Plan A contained all schemes which were deemed by
the EA/English Nature to fall into their "essential and clear
category", ie schemes fulfilling water companies' mandatory
duties. Plan B contained these, plus schemes which fulfilled legal
and policy obligations but were considered to be "choices
to be made". These "plans" were supposed to be
a guide for water companies, and a menu of options from which
they could select. However, most companies have chosen one plan
over the other. This is unsurprising, but unfortunate, as the
total environment programme (plan A and plan B) deserves proper
funding, and much of value is lost if nothing from plan B is included
in companies' preferred strategies.
10. The RSPB is disappointed by the response
of many water companies to the environment programme, and we have
deep misgivings over the content of their preferred strategies.
11. Most companies have included only the
barest statutory minimum (plan A), and many (notably Wessex Water,
Thames, Portsmouth and Southern) have failed even to do that,
omitting a whole raft of legally required water quality and water
resources measures. The examples which follow, quoted from the
business plans, are illustrative but by no means exhaustive. There
is a general reluctance across the water industry to include the
full environment programme in company plans, and widespread denial
of the need for it and the benefits which would accrue. Many of
the plans have unfairly questioned the competence of the environmental
regulators, who have followed a strict and transparent process
of screening and cost-effectiveness analysis to develop the environment
programme.
12. Thames Water's preferred strategy does
not include much of plan A. They have excluded any work requiring
reductions in abstraction from rivers and groundwaters. They say:
We have excluded a number of uncertain investment drivers—such
as water sustainability reductions under the Habitats Directive.
13. Southwest Water have decided that their
preferred strategy should "only carry out the environmental
improvements where we have a clear legal obligation", not
including many parts even of plan A. They cost plan A at £69
million and plan B at £126 million, suggesting that non-implementation
of these plans will result in a lot of good environmental work
going by the wayside. They cite the need to protect customers
from excessive bill increases as the reason for this approach,
but their own figures suggest that plan A would only increase
bills in 2010 by a further £7 and plan B by £15.
14. Wessex Water's waste water improvement
programme excludes up to £54 million of action to protect
Sites of Special Scientific Interest (only £2 million of
action is actually included). Within work to address low flows
they have excluded up to £56 million of action (including
just £6 million in their programme).
15. Southern Water's preferred strategy
does not include substantial parts of the environment programme,
omitting most of the water resources schemes and much of the water
quality programme. They say: The large scale of the overall quality
programme has led us to challenge certain areas where we believe,
as yet, the Environment Agency has not proved the economic benefit
to the environment.
16. Portsmouth Water's preferred strategy
does not include reductions of 5% in abstraction demanded by the
EA for the protection of Habitats Directive sites. They say: In
due course Ministers will have to decide whether the benefits
from these perceived environmental improvements outweigh the costs
and the risks to the public's security of supply.
17. There is a wide variation in the costs
attributed by water companies to the environment programme, and
we are sceptical about the basis for some of their figures. We
believe that the scheme costs put forward by water companies are,
in many cases, unnecessarily and unjustifiably high. This has
had the effect of whipping up hostility to the environment programme
from customer representatives and some parts of the press in a
way which we do not believe is justified by the programme itself.
We believe that it is likely that a more comprehensive programme,
incorporating many more of the schemes in plan B, could be funded
if the costs cited in business plans were questioned and reduced.
18. The RSPB recognises that a balance must
be achieved between environmental benefits delivered and overall
rises in customers' bills, but we are concerned that the current
raft of business plans muddies the water and makes it more difficult
to arrive at this balance. It is a matter of concern that this
is not the first time water companies have presented a vision
of enormous price rises to fund so-called "marginal"
environmental improvements. The same happened at the time of the
last periodic review in 1998. However, alarmist predictions about
price rises then were followed by a period in which companies
delivered a full programme of environmental schemes, with no significant
increases in bills. In fact, in some areas bills even fell. Our
concern now is that some water companies may be exaggerating the
scale of the spending needed to fund the environment programme,
and that this approach could jeopardise progress towards delivering
a cleaner, healthier and more wildlife-rich water environment.
Concerns about water company use of customer research
19. Understandably, water companies have
sought to justify their strategies by claiming that they are representing
what customers want. In doing so, they have quoted and drawn conclusions
from a report published by MORI in November 2002, entitled "The
2004 Periodic Review: Research into Customers' Views".
20. Southern Water, for example, choose
to highlight the following in their business plan: The MORI survey
shows that 5% of customers within Southern Water's area are dissatisfied
with the water supply service, and 29% use a water filter or purifier.
16% of customers nationally feel that the "taste and smell"
of tap water needs "quite a lot" or "a great deal"
of improvement. Around 16% of respondents within Southern Water's
area gave a negative rating to the current level of service on
"avoiding the risk of homes and gardens being flooded by
sewage". 17% of customers were critical of the level of service
on "smells from sewage works". A similar proportion
felt that this was a "most urgent" priority for improvement.
21. Thames Water said of the research: Customers
highlighted sewage flooding as a priority along with sufficient
maintenance to ensure reliable supply.
22. Southwest Water claimed that their preferred
strategy focused "on issues which remain of particular concern
to customers. These include reducing discoloured water, taste,
odour and waste water flooding problems. In the Plan we are proposing
to address the issues of greatest concern to our customers".
23. The RSPB was represented on the steering
group of this research project, and we therefore fully understand
the conclusions which could be drawn from the research. The report
showed in its conclusions that most customers place a high value
on the water environment, and are prepared to invest in it through
their bills. The research demonstrated that customers felt that
coastal waters, rivers and wildlife habitats were in most need
of further investment (ahead of 11 other aspects of company service),
were a priority for action, and an aspect of company service for
which they were willing to pay.
24. The executive summary from the MORI
research concluded: Three aspects are considered to be in need
of "quite a lot" or "a great deal" of improvement
by between 21% and 30% of respondents. These are—the "maintenance
of the quality of coastal, and bathing waters" (30%), the
"maintenance of the quality of river waters" (26%),
and the "protection of important areas of wildlife and plants"
(21%).
25. Respondents tend to be consistent in
their views about which aspects are worth spending money on to
improve ("which may result in customers' bills increasing").
The same three "urgent" priorities emerge. Around a
third of the sample say either "more" or "a lot
more" should be spent on "maintaining the quality of
river waters and of coastal and bathing waters' and/or "protecting
important areas of wildlife and plants". 25% say they would
be "very concerned" if the improvements to the aspect
they selected as their top priority "had to be delayed to
keep customers' bills down". 44% would be "fairly concerned".
26. While waiting for the conclusions of
the second joint customer project to be published in December
(fieldwork took place in September and October 2003), we would
like water companies to consider how well their business plans
reflect their customers' clear desire for investment in the quality
of the water environment. It is perfectly legitimate for water
companies to quote the MORI customer research in support of their
proposals, but if they do so they should give a full picture of
what customers actually said. If they do not they are in danger
of being accused of "cherry-picking" those aspects of
the research's findings which most suit their own business priorities.
A model for water company investment
27. The RSPB particularly supports two innovative
projects which have been put forward by United Utilities and Northumbrian
Water, and endorsed by most stakeholders in their local areas.
These projects emphasise how multiple benefits for drinking water
quality, biodiversity and river water quality can be achieved
through influencing the management of catchment land. We hope
that this kind of approach will be a central feature of projects
across England and Wales in future price reviews. Such schemes
may not fall within the category of those judged to be "essential
and clear", but they are in line with the objectives of the
Water Framework Directive—with which the UK will
soon be legally bound to comply—and represent the sort of
bold vision which water companies should be striving to deliver,
in the interests of the environment and their customers alike.
15 October 2003
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