Select Committee on Public Accounts Thirtieth Report

Conclusions and recommendations

1.  There is insufficient co-ordination between the bodies responsible for managing connections to the sewer network. Public sewers are owned by 10 water and sewerage companies, but local authorities, housing developers and property owners are responsible for ensuring that connections to sewers do not overload the existing system. At present, water companies are not required by statute to be consultees in the planning process by which new properties are connected to existing sewers.

2.  Water companies should educate consumers and businesses to help reduce sewer blockages. Nearly half of all sewer flooding incidents are caused by blocked sewers, often a result of households and businesses disposing of inappropriate items (for example, nappies or cooking fat) down their drains. Ofwat should work with water companies to investigate the costs and benefits of a national campaign of education, or a series of local campaigns run by each company.

3.  Compensation arrangements are currently inadequate. All consumers pay for an effective sewer system through their water and sewerage bills. About 5,000-7,000 each year suffer from sewer flooding. At present, the victims are guaranteed only a refund of their sewerage charges for the year, and are left to bear the cost of cleaning, repair and redecoration themselves. Consumers can cover these costs under household insurance, but some have been unable to obtain insurance through poverty or because of repeated flooding.

4.  The Department for Environment, Food and Rural Affairs should extend statutory compensation arrangements. The Guaranteed Standards Scheme requires water companies to compensate customers for service failures by refunding part or all of the water bill. This is a reasonable basis for service failures like low water pressure, but it is inadequate for the cost and inconvenience of sewer flooding. The Scheme should be more flexible, on the principle that all consumers who benefit from effective drainage should, through their sewerage charges, contribute to the costs of those who endure sewer flooding.

5.  In the meantime, Ofwat should encourage companies to increase voluntary compensation payments. Water companies can and do make voluntary compensation arrangements above the guaranteed minimum. The system is currently ad hoc. Ofwat should issue guidelines on when companies ought to pay compensation, and how it should be calculated.

6.  Ofwat should secure greater consistency in recording the number of properties at-risk of sewer flooding. Ofwat requires sewerage companies to record properties that are at-risk of future sewer flooding incidents. Companies adopt a range of approaches to identify these properties. This inconsistency means that Ofwat cannot compare the performance of companies in a meaningful way and homebuyers cannot be confident about the risks facing the property they wish to purchase.

7.  Ofwat should require companies to include the same sewers in its regular five-year asset inventory assessments. At present, companies report on a sample basis. This approach means that it is rare for the same sewer to be surveyed from one five-year assessment to the next. Companies have therefore been unable to assess the deterioration of individual sewers over time. Five-yearly samples of the same sewers would provide a clearer understanding of the rate of deterioration.

8.  Ofwat should develop measures which provide an indication of the future condition and performance of sewer networks. Ofwat uses a series of indicators based on past performance. The indicators are inherently backward-looking, and may give neither sufficient warning of imminent problems nor an adequate guide to investment needs. Ofwat should supplement existing measures with new ones which assess the risk of asset failure.

9.  Ofwat should require water companies to prepare long-term sewerage resource plans. At present, Ofwat requires water companies to prepare water resource plans which consider the balance of supply and demand over a 25 year period. There is no parallel requirement for sewer systems. In view of the potential pressures on sewer systems arising from new housing developments in the South East, and climate change, Ofwat should require sewer resource plans.

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Prepared 20 July 2004