Examination of Witnesses (Questions 80-88)
ENVIRONMENT AGENCY
14 DECEMBER 2005
Q80 Joan Walley: You said there seemed
to be an arrangement that was fit for purpose but with these new
developments it is going to put more pressure on the forward and
the long term planning that is needed for the water resources.
Do you think OFWAT is sufficiently on board for all of this? Have
they understood the sustainable development issues? This committee
certainly in previous reports has been very focused on trying
to instil in OFWAT the need to put the environmental and sustainable
development issues into the long term planning framework. Are
they on board with this sufficiently?
Sir John Harman: I think they
would say they are.
Q81 Joan Walley: I am asking you.
Sir John Harman: I do not think
it has been as evident as it should have been. That is demonstrated
by the fact that they are getting a sustainable development duty
under the Water Act. That would only be necessary if it was necessary
to make the point, I suppose. I do not want to be over-critical
of OFWAT on this occasion because a lot of what they have done
could be evidenced as taking account of some of these issues.
Their five-year rhythm is not well adapted to some of the longer
term issues. I do not think it is a criticism of the organisation
or the individual, because it is a single person who is the regulator
at the moment, but more the structure within which they are working.
Q82 Joan Walley: Your advice to us,
if I read you correctly, is that we should be pressing OFWAT to
see how they are going to be interpreting that new duty under
the water legislation?
Sir John Harman: There are two
things. That is one of them. Interpreting that has a big impact
on how water companies will deal with water efficiency. The other
thing is, where it is a new infrastructure, that could be either
a new reservoir or the Thames interceptor sewer which we have
argued over long and hard in different arenas. Only the Government
can resolve this but I would hope there could be a national infrastructure
plan which said, "We anticipate as a country that in the
next two generations we will have to supply this, that and the
other." Of course, the Thames flood defences would come into
such a plan, I would guess. If that was clear, it would make the
job of the water companies and OFWAT in calculating the timescale
for their assets much easier. They are bringing forward proposals
for reservoirs but since the beginning of the current asset management
plan and price fixing regime there has been no major water infrastructure
built.
Q83 Joan Walley: Presumably on that
whole issue of the asset management plan, you would be urging
the points made by the previous witness about the water efficiency
that is needed? It is not just about building new reservoirs.
That is something that should be looked at through the OFWAT duties
in this new legislation as well?
Sir John Harman: Yes. There is
a group now set up by and with Defra called the Water Savings
Group, on which OFWAT is represented, which is looking precisely
at the evidence base for this whole issue of what water companies
can do about water use and water efficiency at the domestic level.
Q84 Colin Challen: I wanted to ask
a little about the work you have been doing with the Government's
Water Efficiency Group.
Ms Gilder: It is a fairly new
gathering together of people who have a common interest in water
efficiency. My understanding is that that group has now identified
a range of issues that need more thorough analysis so that they
can reconvene and agree around the table what actions need to
be taken to drive water efficiency as the other part of their
demand management side as opposed to the supply side. That covers
issues to do with metering, public campaigns, tariffs, white goods,
some of the issues you raised earlier about some of the facilities
that you can put into your homes. Clearly there is a big link
to the other piece of work we have talked about today, which is
retrofitting homes that other bits of Government are running.
The group has a life expectancy of several years and it is intended
that each member of that group will take forward particularly
allocated tasks to identify what can be done across that water
efficiency work.
Q85 Colin Challen: You say it has
a lifespan of several years. Does that mean we will have to wait
several years for a report or is it going to make interim reports
and recommendations?
Ms Gilder: No. My understanding
is that there is an action plan being drawn up by that group which
will identify who is going to do what to drive forward water efficiency
and, once accepted, that action plan will form the basis of those
individual group members taking the action that has been apportioned
to them. It is a collective effort but with specific actions allocated
against the members.
Q86 Colin Challen: Will it include
in its remit the possibility of compulsion or is it simply looking
at technical solutions which may be market based or voluntary?
Sir John Harman: Yes, the element
of compulsion has to be an option. I do not sit on this group
and it has had one meeting so far. It is a bit early to talk about
its conclusions. If you look at the current arrangements for water
metering, the Folkestone and Dover Water Company have an application
in front of the Secretary of State at the moment, I believe. I
have forgotten the exact name of the instrument but it allows
them to install metering compulsorily in all domestic dwellings.
There is an element of compulsion already allowed for. The trouble
is it is such a performance to get to that stage that water companies
have not wanted to do that unless they had to. We need for companies
in areas of water stress within the south east of England particularly
to have at their disposal a range of initiatives of which more
vigorous metering is one. I do not think you need compulsion on
that. The pace at which metering is set to advance in water companies
varies from company to company but for some the progress is stately
in the extreme. Something which would increase the level of penetration
of metering and perhaps get two or three particular areas where
metering was more or less universal would allow companies to demonstrate
what could or could not be done by way of inventive tariffs. The
point of metering, although we have some evidence to demonstrate
that metering of itself leads to some behavioural changes which
cut water consumption by a certain proportion, maybe 10%, is to
get yourself into a position where you can start to tariff water
in the way that some continental economies do, which will permit
basic rights on water but will also make it increasingly expensive
to be profligate with it. That is the position we need to get
to. I would hope that the Water Savings Group would give us the
ability to have evidence based on a few pilots of that nature
which could inform the industry as a whole, because at the moment
nobody really wants to take the first step. To be honest, you
are not rewarded by the regulator or by your shareholders for
being brave on water efficiency.
Q87 Colin Challen: You have been
involved in a number of public awareness campaigns. How do you
measure the effectiveness and the effect of those campaigns?
Sir John Harman: On water efficiency
particularly?
Q88 Colin Challen: Across the board.
We are entering into a new campaign with Defra, with the mass
communication strategy on climate change. There may be some lessons
for them from the Environment Agency.
Sir John Harman: The one for which
we are responsible is the flood awareness public campaign which
is a 10 year effort. It spends about two million pounds a year
and has progressed—we are now in year six—from awareness
raising to much more specific information targeted at people in
flood risk areas and what they can do to mitigate their own flood
risk. There were national television advertisements at one stage.
We have measured the effectiveness of that campaign. It has been
very good at awareness raising and less good at changing people's
behaviour. That is probably par for the course. If you look at
successful public information campaigns in the past, drink driving,
seatbelts and so forth, they have been successful because they
have been well invested in and have given a consistent set of
messages over a period of time. I only draw the lessons that any
other lay person can draw from that observation. We would say
the same on flood risk. If you remember the much loved but now
defunct going for green campaign on changing environmental behaviour,
it observed the same rules. It has to be well invested in and
consistent over a period of time.
Joan Walley: On that note, may I thank
both of you. As this is the last formal session before Christmas,
can I take the opportunity to wish everybody a very happy Christmas
and all the recycling in the world? Thank you very much indeed.
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