Memorandum submitted by English Nature
SUMMARY
1. AMP4 is particularly important for the
protection of statutory nature conservation sites. Schemes are
needed to address statutory requirements for protection of SSSIs
and the Natura 2000 series of international sites, to achieve
Defra's PSA target for 95% of SSSIs by area to be in favourable
condition by 2010, and the requirements of the EU Habitats
and Birds Directives. Other schemes are needed to meet commitments
under the UK Biodiversity Action Plan (BAP).
2. Variation in the extent to which some
water companies have proposed schemes to address water quality
in designated sites, and in particular failure to address the
risks and impacts of water abstraction, is of great concern.
3. A catchment-based approach has been proposed
for a few schemes in this AMP round. We support these as examples
of a more integrated and sustainable approach that more schemes
should follow in future rounds.
4. Parallel action is necessary to tackle
diffuse sources of pollution affecting nature conservation sites,
in order to ensure that full benefits are realised from the AMP
programme.
5. There is a need for a more reliable approach
than the current logging up process, to secure funding for schemes
identified within AMP periods.
1. INTRODUCTION
English Nature is the statutory body that champions
the conservation and enhancement of the wildlife and geological
features of England. We work for wildlife in partnership with
others, by:
— advising Government, other
agencies, local authorities, interest groups, business, communities,
individuals on nature conservation in England;
— regulating activities affecting
the special nature conservation sites in England;
— enabling others to manage
land for nature conservation, through grants, projects and information;
— enthusing and advocating nature
conservation for all and biodiversity as a key test of sustainable
development.
We have statutory responsibilities for nationally-important
nature conservation sites: Sites of Special Scientific Interest,
the most important of which are managed as National Nature Reserves.
Through the Joint Nature Conservation Committee,
English Nature works with sister organisations in Scotland Wales
and Northern Ireland to advise Government on UK and international
nature conservation issues.
2. ENGLISH NATURE'S
ROLE IN
THE AMP4 PROGRAMME
2.1 English Nature has provided advice to
Government and to the other Regulators on the investment programme
needed to deliver necessary benefits for nature conservation.
We are a member of the Regulators group for the AMP4 process and
so have been involved in the development of advice to water companies
on the preparation of their draft business plans and preparation
of public statements and consultations on the Periodic Review
process. We are part of the working group that has designed and
commissioned surveys of customer opinions in 2003 and 2004.
3. THE IMPORTANCE
FOR NATURE
CONSERVATION OF
THE AMP PROCESS
3.1 The previous Periodic Review was the
first in which substantive consideration had been given to schemes
for the protection of nature conservation sites. Although the
AMP3 investment period (covering 2000-05) is not yet complete,
and the majority of nature conservation schemes are scheduled
for completion towards the end of that period, there have been
successes already which are illustrative of the benefits sought
on a larger scale from the AMP4 programme.
3.2 These include schemes to: restore flow
levels to parts of the River Eden, Cumbria, a Site of Special
Scientific Interest (SSSI) and Special Area of Conservation (SAC)
under the EU Habitats Directive, which have enabled fish
to migrate through one of the major tributaries; restoration of
water levels in parts of North Dartmoor SAC and SSSI which have
improved habitats for brown trout and valley mire vegetation;
removal of phosphates for sewage treatment works discharging into
Bure Broads SSSI and SAC in Norfolk, Woodwalton Fen in Cambridgeshire,
and Looe Pool lagoon SSSI in Cornwall.
3.3 Despite these improvements, there is
still need to tackle point source pollution and abstraction affecting
SSSIs and Natura 2000 sites. As at August 2003, approximately
60% of wetland SSSIs were considered to be in unfavourable condition.
In the case of rivers, a high proportion is due to point source
pollution leading to excessive nutrients, principally phosphorus,
whilst around 160 freshwater and wetland sites were identified
during preparation for the PRO4 process as affected by or at risk
from abstraction.
4. SCOPE OF
AMP4 PROGRAMME FOR
NATURE CONSERVATION
4.1 Initial Ministerial Guidance placed
emphasis on the importance of AMP4 for nature conservation. It
identified as key drivers compliance with the Countryside and
Rights of Way Act—in particular enabling achievement of
Defra's PSA target for 95% of SSSIs to have reached favourable
condition by 2010—and achievement or maintenance of favourable
conservation status for sites designated under the EU Habitats
and Birds Directives (SACs for habitats and Special Protection
Areas (SPAs) for birds—collectively known as Natura 2000
sites). Ministerial guidance requires that where such schemes
are identified at a high level of certainty, action must be taken
to cease or modify discharges, and that funding must be made available
where abstraction licences need to be varied or revoked to ensure
favourable conservation status. Because of the PSA target for
achieving favourable condition on SSSIs, and the risks of infraction
proceedings for non-compliance with the Habitats and Birds Directives,
it is essential that the necessary schemes receive funding during
this periodic review. In addition, a small number of nature conservation
schemes which are not linked to statutorily protected sites have
been included where they are required to contribute to meeting
UK Biodiversity Action Plan (BAP) targets for habitats and species
dependent on an aquatic environment.
5. PROCESS FOR
SELECTING SCHEMES
5.1 Schemes which are needed to address
problems with water quality or water resources in SSSIs and Natura
2000 sites, were determined in close collaboration with the Environment
Agency. The level of certainty with which schemes were proposed
for specific sites was determined jointly with Environment Agency,
based on jointly agreed criteria for (a) degree of risk to or
impact on a site and (b) strength of association with water company
activity.
6. SCALE OF
NATURE CONSERVATION
PROGRAMME REQUIRED
6.1 A summary of the environmental programme
has been published in "A Good Deal for water".
A list of schemes was submitted to water companies for costing
at the end of May 2003. Annex 1 shows tables of numbers of schemes
submitted by nature conservation driver. 260 schemes to tackle
water quality problems at 64 statutory nature conservation sites,
were identified at higher levels of certainty. Similarly, schemes
are needed at 53 sites to deal with water abstraction problems.
A further 124 site investigations also require funding under the
AMP4 programme. Guidance to water companies required inclusion
under Reference Plan A for those statutory schemes with high levels
of certainty, others (including BAP schemes) under Reference Plan
B. Guidance on what to include under company preferred schemes
steered companies towards including statutory schemes but was
not prescriptive. Costings were also required for investigations
where there was a measure of uncertainty—the results of
these investigations may lead to further schemes being identified
which need completion during the AMP4 period.
6.2 For water resources schemes, it is difficult
to identify schemes without further options appraisal (eg of water
availability or use within a catchment) even though impacts on
or risks to sites (and hence need for action) from water abstraction
were clearly recognised. Hence, where water resources schemes
could not be proposed at this stage, the Environment Agency recommended
to water companies the use of a "sustainability reduction"
approach, to enable an estimate of the scale of compensatory water
provision that would need to be made in order to protect sites.
Estimates based on sustainability reductions should also have
been included within draft business plans for schemes with high
levels of certainty.
7. DIFFUSE POLLUTION
7.1 The Environment Agency and English Nature
wish to see measures introduced by Government to reduce impacts
by other sectors in parallel with action on the discharges and
abstractions made by water companies. Nutrient pollution, especially
from phosphates, causes changes in aquatic plant communities and
eventually can lead to algal blooms. Both point and diffuse sources
contribute in different ways to this problem and both sources
must be tackled together. Diffuse water pollution from agriculture
(DWPA) is a major source of nutrient enrichment in many freshwater
SSSIs and Natura 2000 sites and English Nature has recently identified
those sites most at risk. We expect Defra to be consulting on
its DWPA proposals this winter, and it is important that swift
action is taken following the consultation. Such action in parallel
with action under the periodic review is important in ensuring
proportionate action by other sectors in tackling water quality
impacts on SSSIs.
8. RESPONSE OF
WATER COMPANIES
8.1 Company Draft Business Plans were produced
in early September and are still being analysed. We expect to
give our advice to Ministers in November, but our initial views
follow.
8.2 Some water companies have included the
full water quality environmental programme in their preferred
strategies, which we applaud. However several have not included
all "essential and clear" water quality schemes affecting
nature conservation sites in their preferred strategies, even
though these fall under statutory drivers. We have particular
concerns that one company has not included 21 schemes to remove
phosphates from a number of nationally and internationally designated
river systems in its preferred strategy. Another has also excluded
six nitrogen or phosphorus removal schemes from its preferred
strategy, and another has excluded six phosphorus removal schemes
from its preferred strategy.
8.3 Many companies have not followed agreed
best practice, and the Agency's and Ministerial guidance, in developing
their plans. We are particularly concerned that many companies
have failed to include schemes to deal with the impact of abstraction
at Habitats Directive sites and SSSI's. A number of companies
have not included these schemes in either their preferred strategy,
or Reference Plan A. Even where they are included, water resources
schemes are programmed in some cases for completion after 2010:
beyond the agreed timescales and raising the potential for infraction
proceedings.
8.4 The process of estimating "sustainability
reductions" within water resources plans is an important
way of accounting for water abstraction schemes that have been
submitted at high levels of certainty, but where details for schemes
cannot be identified until a fuller options appraisal has been
carried out by the company. At this stage it appears that water
companies have widely failed to adopt "sustainability reductions"
and we refer you to the Environment Agency evidence on this point.
8.5 A few water companies have included
schemes to tackle some water quality issues at catchment level,
by proposing that land management actions, such as reductions
in livestock stocking density and tackling moorland gripping,
be funded through the AMP4 process. We support these proposals
both as schemes or investigations for funding under AMP4, and
as an objective for future AMP rounds, as a more integrated and
sustainable approach to managing inputs.
8.6 The Countryside and Rights of Way (CRoW)
Act requires the Environment Agency, Ofwat and the water companies
to conserve and enhance SSSIs in carrying out their functions.
This duty on all parties must be reflected in their response to
the proposals put forward to protect nature conservation sites
during AMP4.
9. DEALING WITH
UNCERTAINTIES IN
THIS AND
FUTURE AMP ROUNDS
9.1 Some uncertainties will remain over
the schemes necessary to tackle water abstraction impacts on SSSIs
and Natura 2000 sites due to the lack of information at this stage
on alternative resources, and of the options available to allow
for changes in water resourcing. Where possible, water companies
should carry out options appraisals to enable improved costing
of schemes which should then be included in final business plans.
However, it is important that where schemes are known to be necessary
but costs at this stage uncertain, sustainability reduction estimates
are used in final business plan, to ensure that resources are
made available to fund such schemes once the final costs are known.
9.2 A key concern for AMP4 is uncertainties
for water companies in costs and timing of new obligations from
the EU, in particular the Habitats Directive. The Habitats Regulations
require the Environment Agency to demonstrate that permissions,
for example those for discharges and abstractions, do not adversely
affect a site of European importance, alone or in combination.
If this cannot be demonstrated, the permission has to be modified
or revoked unless a case can be made of over-riding public interest,
and there is no viable alternative.
9.3 The Environment Agency and English Nature
have given a priority rating to the action needed to tackle activities
controlled by permits issued by the Environment Agency and which
affect Natura 2000 sites. The condition of the site, the risks
posed by permit conditions, and the complexity of the site determined
the ranking of priorities. The timetable, agreed with Government,
for this review is to complete assessments for high, medium and
low priority sites by 2004, 2006 and 2008 respectively, with any
necessary revocations or variations in permits identified and
planned within two years of these dates, ie by 2006, 2008 and
2010. This timetable does not match that for the price review.
This means that some investigations to determine which discharges
or abstractions are adversely affecting Natura 2000 sites will
not be completed in time for this price review.
9.4 Similarly, a number of investigations
have been identified for funding by the water companies under
AMP4 (see Tables 1 and 2, Annex 1), where it is not certain whether
schemes, or what type of schemes, are needed to achieve favourable
condition of SSSIs. In order to ensure that the PSA target for
SSSIs is achieved, it is likely that investigations funded in
this price review will lead to a need to take remedial action
before the next review.
9.5 Some companies may therefore face changes
to costs (either additional schemes, or removal of schemes from
the programme) between this price review and the next. The licences
by which water companies operate provide for changes in price
limits between reviews, where extra costs arising from new obligations
exceed a particular threshold related to the turnover of the company
(IDOKs arrangements). Where the net additional costs do not exceed
the threshold, the company must carry these costs until new price
limits are set out the next review (logging up arrangements).
9.6 It is likely that a great many of the
additional nature conservation schemes will be insufficient to
trigger the IDOKs threshold for changing price limits. However
the uncertainties associated with the logging up procedure have
led to reluctance on the part of water companies to rely on this
procedure for bringing forward nature conservation schemes in
the past. We think that measures should be put in place to give
companies confidence that funding (including financing costs up
to the next price limit period) will be made available for schemes
that are justified under the CRoW Act and Habitats Directive drivers
outside the timetable for the price review. There is a need for
full assurance to be given to water companies that Government
will support claims for schemes that are shown to be necessary
to meet statutory drivers, and that necessary provision for funding
will be made available
9.7 Part of the problem here is due to the
mismatch in timetabling between the AMP4 process and other policy
processes (such as the Review of Consents) which have implications
for water company spending programmes. A process which is less
dependent on a fixed timetable and more responsive to changes
in policies which have implications for water company funding,
should substitute for the current AMP approach. In order to avoid
mismatches in timetable, the AMP timetable should be reviewed
and a process established that will enable better alignment with
the reporting cycles for other major drivers for water policy
such as the Water Framework Directive.
17 October 2003
| 
