Memorandum submitted by The Wildlife Trusts
INTRODUCTION
1. Thank you for the opportunity to comment
on this important topic. As you may be aware The Wildlife Trusts
are a unique partnership of 47 local Wildlife Trusts covering
the whole of the UK and the Isle of Man. The partnership campaigns
for the protection of wildlife and invests in the future by helping
people of all ages to gain a greater appreciation and understanding
of nature.
2. Collectively The Wildlife Trusts have
approximately 420,000 members and manage almost 2,500 nature reserves,
covering more than 76,000 hectares of land, ranging from inner
city urban sites to the UK's finest wildlife areas. We also offer
advice and encouragement to other landowners to help them manage
the wider countryside for the benefit of wildlife and people.
3. We have a long history of working in
partnership with the Water Industry and their investment decisions
are of keen interest because of their impact on our landholdings
biodiversity and throughout the catchments in which they operate.
AMP AND THE
ENVIRONMENT
4. The AMP process was devised to control
the costs of a newly privatised water industry as it was asked
to deliver a massive investment programme to achieve mandatory
domestic and European quality targets and indeed recent water
quality statistics released by DEFRA show that there has been
a real success in tackling the gross point sources of pollution.
5. However our fresh and coastal waters
still suffer significant pollution from nitrates and phosphates.
These excessive nutrients reduce the diversity of plant life and,
at their most disastrous, cause algal blooms that choke plant
life and strip water of oxygen, killing invertebrates and fish.
6. The UK now faces a new challenge to restore
the ecological balance of rivers, lakes and coastal waters by
fully implementing the Water Framework Directive (WFD).
This will require action to tackle nutrient pollution from all
sources including nitrates and phosphates from sewage treatment
works.
COMMENTS ON
THE PR04 PROCESS
7. The Wildlife Trusts pleased to see that,
for the first time, that the environmental drivers identified
for the spending review included biodiversity. However with some
notable exceptions, such as United Utilities, it seems that the
water companies are reluctant to take such schemes forward in
their preferred plans despite consumer concerns about the environment
identified by the joint MORI research (see below).
8. We are also pleased to participate in
joint customer research into customer views on spending through
our membership of Wildlife & Countryside Link. However we
are concerned that selective reporting of the findings of the
initial report by WaterVoice and elements of the water industry
have distorted the clear message that the environment remains
at the top of the public agenda. To quote from the executive summary:
"The least well rated aspects [of water
company service] are `maintaining the quality of coastal and bathing
waters and of river waters'." (paragraph A1.6.) and "Respondents
tend to be consistent in their views as to 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'".—paragraph
A4.1
9. In light of this support we are increasingly
frustrated that water companies and WaterVoice continue to attack
the environmental investment programme as if it is some kind of
unnecessary and unpopular burden. In many company plans the environmental
programme under Scenario A or B accounts for only a fraction of
the predicted price increase yet all the attention on price rises
seems to fall on what would appear to be the most popular area
for investment.
WATER COMPANY
PLANS
10. Interpretation of the draft plans presented
by the water companies has been complicated by a lack of consistency
both in presentation and detail. We are very concerned that a
number of water companies draft business plans include fewer schemes
under the environmental drivers than Ofwat proposes under its
reference Plan A scenario which we understand to be the minimum
required to achieve statutory compliance. We would single out
Wessex Water, Thames, Portsmouth and Southern as being of particular
concern.
11. We are also concerned about the scale
of the costs reported in the draft plans. There is an inherent
incentive for water companies to exaggerate costs in the AMP process
and thereby generate extra profits through "efficiency savings"
after the price determination. Any inflation of the costs reported
in the draft business plans will act to raise concerns amongst
customers about the predicted price increases. This has the potential
to skew perceptions about the affordability of environmental improvements
both amongst customers and affect the outcome of cost-benefit
analysis and the identification of contentious schemes.
12. Experience has shown that the final
determination of previous AMP rounds by Ofwat has generally reduced
initial cost estimates and, therefore, the increases in water
bill passed onto the customer. In particular the draft plans presented
by Southern Water and United Utlities seem completely out of kilter
with the other water and sewerage companies.
THE ENVIRONMENT
AGENCY, CCW AND
ENGLISH NATURE
13. The Wildlife Trusts support the environmental
programme presented to the public in "A good deal for
water" and the supporting documents. The research suggests
that the benefits to the public could range between £5 and
£8 billion and outweigh the costs of delivery.
AFFORDABILITY AND
NON-PAYMENT
14. The Wildlife Trusts believe that the
recent history of investment in protecting and improving the water
environment has been good for wildlife, the economy and society
as well as representing good value for customers. We want to see
this investment continue but recognise that affordability can
be an issue with vulnerable groups.
15. However we do not believe that issues
around affordability should simply be tackled by minimising the
unit cost of water. This does nothing to reinforce the message
that water is a valuable resource or encourage conservation amongst
those customers for whom the water bill represents a small proportion
of income. It would also fail to capitalise on the benefits which
a clean, healthy environment can bring, improvements that (from
the MORI research) the public seem to support.
16. Instead we would encourage a more imaginative
approach to tackling real water poverty such as rising block tariffs
for metered customers, support for those in real poverty and the
introduction of a water savings trust which could help promote
water efficiency amongst consumers.
THE FUTURE
OF AMP
17. As mentioned above the AMP process was
designed for the control of the post-privatisation water industry.
Whatever merits or problems the system has it is clear that implementation
of the Water Framework Directive brings with it a new set of challenges.
18. Not least the Directive should herald
a new approach that looks at holistic wider catchment approaches
to pollution control, resource management and drinking water protection.
While there is much still to be done to tackle the remaining point
sources of pollution under AMP4 The Wildlife Trusts believe that
this should be the last round of investment in its current format.
We would urge the Government to look at new ways of integrating
the needs of the environment, wider countryside policy, consumer/public
interests and water industry investment. This could bring huge
economic efficiencies benefiting wildlife, people and the rural
economy.
17 October 2003
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