|
UNCORRECTED TRANSCRIPT OF ORAL EVIDENCE To be published as HC 779-i House of COMMONS MINUTES OF EVIDENCE TAKEN BEFORE ENVIRONMENTAL AUDIT COMMITTEE
SUSTAINABLE HOUSING: A PROGRESS REPORT
Wednesday 14 December 2005 MR PAUL KING SIR JOHN HARMAN and MS PAM GILDER Evidence heard in Public Questions 1 - 88
USE OF THE TRANSCRIPT
Oral Evidence Taken before the Environmental Audit Committee on Wednesday 14 December 2005 Members present Mr Martin Caton Colin Challen Mr David Chaytor Mr Tobias Ellwood David Howarth Mark Pritchard Dr Desmond Turner Joan Walley
In the absence of the Chairman, Joan Walley was called to the Chair ________________ Memorandum submitted by WWF-UK
Examination of Witness
Witness: Mr Paul King, Campaign Director, One Million Sustainable Homes, and Director, One Planet Living, WWF-UK, gave evidence. Q1 Joan Walley: Mr King, I would like to welcome you and thank you for coming along and giving evidence to what is in fact the first session of our inquiry. I think it is very important to get on record how important this inquiry is in relation to the whole issue of sustainability. Given the work that you and WWF have been doing, would you like to make a very brief statement by way of introduction? One of the issues that we are really concerned about is your lack of membership of the Government's Senior Steering Group on the Code for Sustainable Homes. Mr King: Thank you very much for inviting me along to give evidence. I have been leading WWF's One Million Sustainable Homes campaign which we launched at the World Summit on Sustainable Development in the summer of 2002. Although it is called One Million Sustainable Homes, we are less transfixed by a particular number and the campaign is really all about mainstreaming sustainable homes. To that end we spent quite a lot of time at the outset trying to understand what people perceived to be the barriers to mainstreaming sustainability in UK housing. That led us to an understanding that I think is quite widely shared of what the key barriers are perceived to be. These range from perceptions that the current building regulations and planning regulations sometimes hinder rather than help sustainability, perceptions that there are insufficient fiscal incentives either for developers or consumers, the perception that sustainable homes cost too much to build, the idea that there was no common standard; people would not necessarily agree on what a sustainable home would be, the idea that financial institutions who made the investment in housebuilding were not particularly interested in sustainability, and finally, a view held by a number of house builders, that consumers were not interested in sustainable homes and did not want them, and if they did they would be building them. What we have been doing over almost the last four years is working with a wide variety of partners in various positions of power and influence over different aspects of that debate to try and tackle these barriers and change people's perceptions. In all of that our dialogue with Government and ODPM in particular has been critical as the main regulating department responsible for planning and building regulations and we were invited to join the Sustainable Buildings Task Group that was set up as a result of the Better Buildings Summit a couple of years ago. Members of the committee will know that the report from the Sustainable Buildings Task Group recommended a number of things but one of the key recommendations was the establishment of a single national code for sustainable buildings. That recommendation was welcomed by Government last summer and a Senior Steering Group was established in December and WWF was invited in the form of Robert Napier, my Chief Executive, to be represented on that group. We have been a member of that group from that point up until 30 November when Robert decided to resign. There were essentially two reasons for that resignation. One was to do with process and one was to do with content of the draft code. Our feeling is that the process of drafting the code and the way that the steering group was managed and consulted and used left an awful lot to be desired in basic logistical ways but also in more meaningful ways in terms of the way that advice was being taken on board or not. The final straw in the process aspect of our resignation was that, despite assurances and promises to the contrary, we learnt that we were not going to be given the opportunity to comment on or review the draft before it was published. That was despite explicit assurances to the contrary at earlier steering group meetings. Furthermore, when we finally saw the draft code at the point when it was too late for us to comment as members of the Senior Steering Group, we realised that this was a draft code that we could not possibly defend in the public domain. Q2 Joan Walley: In terms of its content, what could you not subscribe to? Mr King: There was an awful lot of rhetoric around what the code should be and we supported that. We supported the idea of a very strong, single, national code. The idea was that it should set a stretching standard, a realistic and achievable but stretching standard nonetheless, that would signpost the future direction of building regulations and the future trend of sustainable building in the UK, and that it should also be a requirement of the public sector, the agencies, such as English Partnerships and the Housing Corporation, who effectively use public money to fund housing in this country and indeed dispose of public land and so on. What we ended up with was a draft code for sustainable buildings which was less than existing Government commitments. Q3 Joan Walley: How was it less than existing Government commitments? Mr King: For some time public agencies have been committed to the BRE EcoHomes standard for housing. For some considerable time English Partnerships have been committed to that standard at a minimum of EcoHomes "Very Good" level. The EcoHomes standard has "Pass", "Good", "Very Good" and "Excellent" levels. They committed at the "Very Good" level on all of their land and in fact, for the Millennium Communities Programme, at the EcoHomes "Excellent" level. The Housing Corporation has been committed to the EcoHomes standard for some time, and publicly committed to move to the EcoHomes "Very Good" level as at April 2006. In doing that the public sector was committed to a standard that was significantly beyond building regulations and the minimum requirements. EcoHomes as a standard is constitutionally committed to being beyond regulation, so by signing up to that standard Government was sending a very clear signal that it was going to lead the way and that these kinds of standards were significantly beyond the regulatory minimum. What we saw in the draft code was five levels. Level three would be the entry point for the public sector agencies and at that level, in perhaps the most critical area of energy (although there are a number of important areas), the requirement is no more than the statutory minimum building regulations. Q4 Joan Walley: Can I be quite clear that what you are saying is that the content of the code is of a lesser quality than the BRE EcoHomes standard? There is no doubt about that? Mr King: That is right. Obviously, the EcoHomes has different standard levels but if we are comparing the draft code to the EcoHomes "Very Good" standard the draft code is less than that standard. Q5 Joan Walley: Just so that I am clear in my mind, did you put all of this to ODPM, this procedure that you have qualms about, before the content of the draft code was published? Was there an opportunity for ODPM to comment on what you were saying to them? Did you raise this with them? Mr King: The issue was raised repeatedly throughout the life of the Senior Steering Group by WWF and other members of the steering group. Q6 Joan Walley: What was ODPM's response? Mr King: The specific point that was made throughout the process was that whatever it produced had to be seen to be going further than existing commitments; otherwise all the rhetoric surrounding the code would be pointless, and the assurance was repeatedly given that, of course, it must reach that level and in fact that we would be given the evidence before any public consultation that would demonstrate very clearly that the new draft code would be more than the previous commitment. Q7 Joan Walley: And you say that that is not the case? Mr King: That is not the case. Q8 Joan Walley: Who else on the steering group shares your view on this? Do you know? Mr King: I would say that that discussion was had several times in the Senior Steering Group meetings and numerous members of the committee endorsed that view. Everybody felt that if we were to go out and be representatives of the Senior Steering Group and ambassadors and advocates for this new code, we had to have pretty clear evidence that what we were promoting was better than what already existed. Q9 Joan Walley: Can I ask whether or not that message was conveyed to ministers or whether or not it was dealt with at official or officer level? Mr King: It was dealt with at official level. There was one occasion where WWF wrote to the Deputy Prime Minister expressing concern about the lack of progress with the process of developing the draft code, but most of the dialogue was at official level. Q10 Joan Walley: Are you now completely out of the loop on this or do you see yourselves going back into the fold? Mr King: Our aim is quite simply that we want to see a strong code. Q11 Joan Walley: Are you intending to discuss this with ministers now that you have resigned? Mr King: Yes. On the day that we resigned from the group we had numerous conversations with officials at ODPM. They expressed great disappointment that we felt the need to leave the group and they expressed the hope that we would rejoin the effort to establish a good code down the line and we remain open to that. We want to engage constructively in this process in whatever way we can, so we will respond to the consultation publicly but we are also quite happy, obviously, to re-enter discussions about how, during the consultation period, this code can now be improved. Q12 Joan Walley: Just before I bring in Mr Pritchard can I ask if there is a very clear list that you have of issues that you would want to be addressed by this code? It would be very helpful if we could have a copy of that on the committee, further to the evidence that you have already given us. Mr King: Absolutely. Q13 Mark Pritchard: You say that you have had conversations with ODPM and various meetings. Have they written to you formally responding to the concerns that you have raised and the reasons for your withdrawal from their committee? Mr King: No, we have not had anything in writing. One thing that I should emphasise is that a critical part of the process was the stage at which ODPM would form a working relationship with the BRE because, going back to the original recommendation from the Sustainable Buildings Task Group, which said that the new code should build clearly on the EcoHomes standard because it would be nonsensical to re-invent the wheel in that respect, everybody agreed that it was critical that an agreement be reached with BRE. That agreement was only reached extremely late in the day and that is why the final draft code was so radically different from earlier drafts and the papers that the Senior Steering Group had been able to discuss. Q14 Mark Pritchard: What do you think they need to do to attract you back into the process? What objective, hard measures need to be put in place to bring you back on board? Mr King: Quite simply a statement that, whatever results from the consultation period, the final code will be demonstrably stronger and go further than existing Government commitments. Q15 Joan Walley: And you will be setting out what it would take for that to happen? Mr King: Yes. Q16 Colin Challen: I am wondering if this episode with your departure from the steering committee is just a one-off episode or would you say that it might be a more systemic characterisation of the way that ODPM treats these issues? Mr King: What I would say is that WWF thinks long and hard before taking a step like this. We prefer to be at the negotiating table having a structured discussion rather than throwing our toys out of the pram and we thought carefully about our decision to resign and therefore it was really a case of the final straw in this particular process. Q17 Colin Challen: Only on this particular occasion? In your general dealings with ODPM, which must be extensive over a long period of time, have you found them to be more helpful in other regards? Is this just a one-off? Mr King: No, it is not just a one-off. It has been frustrating on a number of points. Q18 Colin Challen: Before I get to the main meat of my questions I want to ask whether you think a voluntary code is sufficient anyway or should it not all be built into regulations on a statutory footing? Mr King: The question of a voluntary code versus regulation is one that goes back a very long way. The Sustainable Buildings Task Group took the view that it was the right approach to recommend a voluntary standard, albeit that to make any kind of voluntary standard stick or have any kind of impact it would need to be accompanied by some pretty powerful incentives and also some considerable marketing so that this became something that the end consumer would understand and recognise that it was something that added value in the same way that perhaps energy labelling of white goods has transformed that market, but also, to kick-start the kind of change that we need to see with the industry, we really needed to see from Government some fiscal incentives to accompany the introduction of the code. Q19 Colin Challen: We will come back to that. Given its voluntary nature and the need for marketing you seem to have suggested that it has not been promoted very well, that many of the key stakeholding groups, the planning and building sectors, for example, simply do not know about it. Is that really the case? Mr King: It is. A lot of stakeholders within the housebuilding industry and outside it have been very frustrated by what they have felt has been a rather opaque process and they have found it difficult to engage in the process of developing the draft code up until now. Obviously, they now have an opportunity with the public consultation period to do so but I think a lot of people do feel frustrated that there has not been more opportunity to engage earlier. Q20 Colin Challen: How do you think that the code should be sold to the key stakeholders? Has it all been left a bit late? Mr King: It has been left a bit late. I do not think it is irretrievable. I still think there is the opportunity, not least because in terms of the basic methodology an agreement has been reached with BRE to build a strong code within the next three to four months. On the back of a strong code I think a wide range of stakeholders, including ourselves, could get behind it and promote it to the media and the public so that it does become something that figures in the public consciousness when people think of buying a new home. Q21 Colin Challen: It strikes me that WWF's decision to leave the steering group is probably the greatest publicity that the code has so far received, which might make some people rather cynical about the content of it. Indeed, you are yourselves still critical of the content. How would WWF go about promoting the code or would you say, "We do not want to promote it because it does not go far enough"? What position are you now left in with regard to promoting it? Mr King: We want to take an optimistic view, which is that we will end up with a code that we are happy to promote. We are not happy to promote it at the moment but we think it can be improved upon significantly. In fact, it would not take very much at all if the will were there to improve it significantly because a code based very clearly on an EcoHomes methodology could easily adopt the very best of the EcoHomes methodology and improve upon it and that could be done quite quickly. One of the things that WWF has been doing over the last few years is having conversations with other actors in the market place to see what could be done in terms of creating market-based incentives for take-up of the code in addition to the public finances by way of fiscal incentives. For example, we work very closely with the Halifax/Bank of Scotland talking about the opportunities to introduce things like preferential mortgages and insurance products that could be linked to the code so that the code would become a benchmark to trigger preferential rates in terms of those sorts of products, so that the end user is faced with a suite of benefits that come along with the label of a better home. Q22 Colin Challen: You obviously discussed fiscal incentives in the steering group. Do you think that the code that we have now contains any serious fiscal incentives? Mr King: It does not at present, no. There does not seem to have been very much progress on the introduction of fiscal incentives to support the code at this time. That is pretty critical because Government itself has been quite critical of the take-up to date of the EcoHomes standard which has been largely driven by compliance. That is to say that the take-up of the EcoHomes standard is largely attributable to the public sector agencies which have required it of development partners, so you have to ask: what is going to make this code any different if the only people required to moot it again are going to be those same public sector agencies? That, of course, is compounded by our concern that the code may be less than the previous standard. There is a clear question to be answered, which is: what is going to make this code different from what has gone before? How is it going to be better as a standard and how is Government going to drive take-up? Q23 Colin Challen: I asked a parliamentary question last week to ODPM about whether they could tell us how many homes are currently being built to EcoHomes standards and they said it would be information gained only to proportionate cost. Are we simply unaware how many homes in the country currently each year are built to EcoHomes standards? Is it so difficult to establish that fact? Mr King: No, it is not at all. Q24 Colin Challen: Are the figures in the public domain? Mr King: The figures are in the public domain and they can be obtained from BRE who can give a complete breakdown of homes that have been assessed and built to their different standards. I have to say the numbers are relatively small. Q25 Colin Challen: Can you say how many there are? Do you know off hand? Mr King: I would want to check the precise figures but we are talking of small numbers of per cent. Q26 Colin Challen: Outside of the code, in terms of fiscal incentives, do you get any encouragement from what is coming out of the Treasury? For example, did the Pre-Budget Report in your view contain any serious incentives? Mr King: We hoped that there might be rather more. We hoped that there might be some kind of incentive, some sort of system which would encourage developers not only to take up the code but also to stretch to the higher levels of the code. That does not seem to have appeared. There do not seem to be any new direct fiscal incentives of the kind that have been called for by a number of agencies for quite a long period of time. The ones most often referred to are preferential rates of stamp duty or stamp duty rebate. The Energy Savings Trust amongst others has promoted the concept of council tax rebates for homes which meet a higher level, and obviously that would need to be administered at a local level but with some form of central government support. There has been talk about the introduction of a form of VAT on new-built homes which, of course, does not currently exist, and the idea that you could introduce a reduced rate of VAT for homes which met a code standard to provide an incentive and at the same time be a disincentive for new homes to be built to anything less than the code standards. Q27 Colin Challen: In the consultation paper on the proposals for introducing a code of sustainable homes reference is made to WWF and BRE working together to develop a region-specific sustainability check list for developers. Are you still going to be involved in that despite having left the steering group? Mr King: Absolutely, yes. The project is 50 per cent funded by ODPM so as long as that continues we will continue with the project. The aim of this, which was something that I became interested in when we were involved with the Egan review of skills, was to look for a tool that would aid the dialogue between planners and developers to aid a shared understanding of what sustainable development means at a housebuilding and development level. It is a tool really to help that dialogue in the pre-planning process. As such we see it as something that should be directly complementary to the code in terms of taking a broader view of some of the spatial dimensions, although we are concerned that, of course, the check list in itself would not be, as currently envisaged, any sort of requirement of anybody. It would be a tool that would aid this dialogue for those planners and developers interested in building to code standards but it would not form a requirement of any kind. Q28 Joan Walley: Just before we leave the code, could you perhaps tell us why it took so long for ODPM to reach an agreement with BRE? Mr King: I really do not know. There are clearly two sides to the story. We and other members of the steering group found it quite a frustrating process. There were obviously concerns on the BRE side about intellectual property rights surrounding BRE and EcoHomes but our understanding is that they were very open and willing to co-operate and collaborate and we are not clear what the obstructions were at ODPM. Q29 Joan Walley: Can I check again: you seem very optimistic about getting some kind of good code and getting back on track with it all. If it has taken this long to get to where we are now are you being over-optimistic? Do you think it really is feasible if your pleadings have not been taken on board so far? Is there the will to do it? Mr King: I believe that a very strong code could have been produced in a very much shorter time than we have currently had in this process. I think that from the point at which the SBTG issued its recommendations probably a very strong code could have been developed within a three-month period. I would say now that we have the EcoHomes methodology underpinning the code we could resolve the situation within three months if there is sufficient will. Q30 Joan Walley: Lastly from me on this section, in terms of the other mechanisms that you were talking about that could be used to get higher standards were things like local development frameworks and getting planning guidance embedded in local authorities with the housing market renewal areas looked at? It seems to me that we have got such an opportunity there with all the housing market renewal areas to get this code embedded. Mr King: Through the Senior Steering Group we never really got into those sorts of discussions about how the code would be embedded. Q31 Joan Walley: So we are not looking at how we do it? It is still out there somewhere? Mr King: That was not taken forward by the Senior Steering Group. Separately WWF, with initiatives such as the regional sustainability check list, on which we have been in discussion with regional authorities about embedding it within regional special strategies and so on, is looking at those kinds of mechanism. Q32 Mark Pritchard: Before I come on to Sustainable Communities: Homes for All can I come back to the VAT point that you raised? Do you agree with me that VAT on new homes might make it more difficult for people to enter the property market, in particular first-time buyers? What is the view of WWF on VAT on new homes? Mr King: It is one of a number of measures that we provisionally recommended in a report we produced nearly three years ago now. There are some distributional issues that probably need to be looked at more closely, if I am honest, in terms of the pros and cons of introducing VAT on new homes. One can look at the distributional effects in terms of the social consequences overall but I do think in terms of kick-starting something with the new housebuilders it could have a desirable effect. Q33 Mark Pritchard: In your view does the Five Year Action Plan Sustainable Communities: Homes for All represent a genuine attempt to address the environmental impacts of increased housebuilding or do you think it merely pays lip service to them? Mr King: We believe that many of the aspirations set out from the Sustainable Communities plan onwards have been quite genuine at one level, but I do not think there has been sufficient attention paid to what is required to deliver this. One of the key issues, obviously, is the sustainable infrastructure required to support this housing. There are obviously big questions about the regional distribution of housing proposed as well that other agencies are better qualified than I am to comment on. At the higher level the aspirations are genuine and well-intended but I do not think the consequences have been put in and sufficiently thought through. Q34 Mark Pritchard: You refer to the "watering down" of Part L of the building regulations which, to quote your document, "serves to undermine [the Government's] commitment to reduce carbon emissions from new homes". Why do you think the Government has pulled back from its original position and what do you think the implications will be of this reduction? Mr King: To some extent WWF feels that you have to look at this in the bigger context. We have currently a Government that is patting itself on the back for a positive outcome in Montreal, and we are talking about big picture politics on climate change, and then we have our housing which contributes something rapidly approaching a third of our CO2 emissions in the UK, and you then look at the opportunities that we have had to tackle both existing and new housing stock and it seems to us that opportunities are being given away and squandered. We felt, as many other agencies did, that there was a particular opportunity with the review of Part L to implement measures for consequential improvements, which got a very positive reception in the consultation to Part L, the point being that where people extend their homes by adding a large conservatory or something they would look to upgrade or reduce the carbon footprint of their home overall. The fact that that rather rare opportunity to intervene in the owner-occupied market was thrown away we think is a great shame, and to some extent perhaps that triggered the commitment to have another review in the spring of next year of future incentives that could be put in place to address energy efficiency in existing housing. Similarly, in terms of new housing standards Part L, a figure of 25 per cent in terms of a percentage improvement over the 2002 regulations was very widely discussed and was often used as a figure by ministers, and we ended up with a figure more like 18 per cent (and some people would say that even those numbers are slightly optimistic), but you get into very technical detail when you start to unpick them at that sort of level. What seems to have happened is that there seems almost to be an acceptance that the difficulty of enforcing current building regulations has had a sort of dumbing-down effect. There is a view that because it is so difficult to enforce the regulations we have already got let us not push them up too high because we are just being unrealistic about what we are going to achieve here. Of course, we would not think that was the right approach. We would think it was all the more reason to tackle the enforcement issue, not to water down the future direction of building regulations. Q35 David Howarth: Before you leave Part L, is it your view that by not tackling the extensions issue the situation is getting worse because people who do extensions in fact increase the amount of energy their housing is using and the reason for having the energy review of the house was to overcome the increase rather than to try and make things better? Is that the problem? Mr King: Absolutely. It is both a missed opportunity to tackle the existing stock, but it is also exacerbated by the fact that you are increasing the carbon footprint of those homes. Q36 Colin Challen: On that point, I am just wondering if you would be able to shed any light on an article I read in this month's Energy in Buildings and Industry. I do not know if you read this magazine. On Part L it says that ODPM often makes the claim that the overall impact of the change is a 40 per cent improvement in the energy efficiency of new buildings. Do you go along with that 40 per cent figure because it says here that other commentators put the actual improvements from next April 1 at 18 rather than 40 per cent. I would be interested in your reaction to that. Mr King: The discrepancy in those figures is that ODPM has recently started quoting a 40 per cent figure which takes into account the improvement that was made at 2002, so 40 per cent is a composite figure of the improvements made in 2002 and now to be made in 2006. The other figures are to do with whether it was going to be a 25 per cent or an 18 per cent improvement over 2002. Q37 Colin Challen: Do you think that 40 per cent over that period of time is good? Mr King: It has got to be welcomed. The question is whether it goes far enough. Having said that, what I would say, and I think this is quite an important point in relation to the code, is where are we going with all of this? We are quite open to the view of many people in the industry that you can only ever go so far in wringing more and more energy efficiency out of an individual building, and where that means we need to go, particularly in terms of new development, is looking at new development much more holistically. We need to be looking at energy savings at that level because the potential energy savings at a development level are far greater than any further incremental improvements we are going to be able to wring out of Part L. Q38 David Howarth: Can I bring you on to the Barker Review and the Government's response to the Barker Review last week? You did not have a chance in your written statement to comment on that because it came out afterwards. I was hoping you might have some comments on the Government's response. Was there anything in their response that was encouraging or surprising or were there any issues left hanging over from the Barker Review that the Government did not deal with? Mr King: One of the elements of surprise, I have to say, was the housing numbers that were talked about. It is fair to say that quite a lot of people feared that the housing numbers might be an awful lot higher than the numbers that were announced, and that is somewhat curious given one of the key agendas for building more houses, which is the affordability argument. I suppose that just leaves me wondering whether the kind of increase that was talked about in the Pre-Budget Report would have any marked influence on affordability. There were reports published both on the affordability aspects and on the sustainability aspects of Barker that were published on the same day and I am still ploughing through some of the detail of those reports. I slightly wonder where the affordability argument is at. Q39 David Howarth: Have you any comment on the need for planning gain supplements? The CPRE was reported as saying that that would just increase the incentives for planners to choose greenfield sites over brownfield sites. Is that your view as well or do you have no such views? Mr King: I think it is still a little bit unclear about what the effects of the planning gain supplement would be. Obviously, one of the stated purposes and benefits of them would be to help to subsidise or support or fund the infrastructure that is required to accompany new housing. What we would say on that front is that we need to fundamentally rethink our infrastructure. We seem to be slightly stuck in a "business as usual" model in terms of infrastructure funding. The Environment Agency has produced some figures which suggest that ----- Joan Walley: We will come on to the infrastructure in a moment. David Howarth: I think we should come on to it now. Q40 Dr Turner: Do you think that the Government has done all that has been needed to secure sufficient funds for the infrastructure for all this new development? Mr King: No, I do not think it has but, as I say, I think that conversation could be better informed in any case about the most cost effective way of meeting our infrastructure needs. What I mean by that, if I can refer to the Environment Agency's figures estimating roughly somewhere between £35,000 and £65,000 per new home in terms of .provision of infrastructure, is that we worked with BioRegional, who were the catalysts behind the BedZED development, a concept development that has been commercially costed, which was a proposal called the Z-square for 5,000 homes in the Thames Gateway which we hope will become a reality within the next 12 months. What that development does is internalise all the energy generation, water and waste treatment infrastructure. It also requires the homes to be built to a minimum of EcoHomes "Excellent" level and the cost per dwelling of meeting all of that infrastructure internalised in that way and of the higher building standards is about £22,000, so we believe that taking a different approach to infrastructure provision means that you can achieve sustainable communities at a fraction of the cost of building more "business as usual" standard homes with traditional infrastructure provision. Q41 Dr Turner: So clearly the answer is no, but it is not a simple "no" because it is not just a question of providing more water pipes or whatever, but by the internal design of the projects? Mr King: Yes. Q42 Dr Turner: Clearly you are not happy with estimates by the Environment Agency, for instance, of the need for as many as four or five new reservoirs in the South East. Do you think that they are unnecessary? Do you think that those sorts of infrastructure developments could be avoided? Mr King: To some extent they could be avoided. I think it is a chicken and egg question because, of course, it all depends on the standard to which the homes are built. We produced a report called One Planet Living in the Thames Gateway a couple of years ago which showed that homes built to the EcoHomes "Very Good" standard could on average save about 40 per cent of water use. If you are saving that amount of water or more, which can be done extremely cost effectively, clearly the additional pressure on water is going to be reduced. On the other hand I would not want to suggest that we need more water resources because at the moment we do not have the assurances that we are going to achieve those sorts of standards. Q43 Dr Turner: It is, as you say, very difficult to disentangle those points. I take it that you would agree that there needs to be a considerable public awareness campaign to get people to change their habits in order to want to have homes of those standards and demand them. Have you made any efforts in that direction? Mr King: There are issues to do with behaviour change inevitably. We can all change our behaviour and live far more sustainably. We could use less energy, less water and so on. Also, there are very simple things that could be done. For example, by replacing conventional toilets with dual flush toilets, by inserting sprays into taps and shower fittings, making them more water efficient, it is possible to save roughly 30 per cent of your water use at no additional cost and therefore these things should clearly be regulated for. I understand there is an ongoing debate in Government about whether it is necessary to regulate for these sorts of measures, whereas to my mind it would seem an obvious and simple step to take. Q44 Dr Turner: So it all leads back logically to having an exacting code in the first place and making it statutory? Mr King: Yes, an exacting code accompanied by a public awareness campaign, so that you are giving people the wherewithal to reduce their consumption in an optimal way. Q45 Dr Turner: Are you satisfied that the water companies are playing their part in this process? Mr King: To be honest, I am not an expert in that area so I would not seek to comment. Q46 Joan Walley: Just to go back to what you were saying about the tighter regulations in respect of toilets and taps and water use and so on, have you been involved in talks with manufacturers or any of the manufacturers' associations because clearly, if you are looking towards incorporating new design and innovation into the whole building process, that is something whereby everybody needs to be on board in order to be able to plan ahead with the certainty that manufacturers need for that? Have they been part of the discussions that you have been having about these scarce resources and how to deal with them? Mr King: WWF specifically has not had those discussions with water fittings manufacturers. However, what we do know is that already there are these products in the market place and they are now cost comparable with less efficient products. It is a classic case, it seems to us, where a simple regulation would drive the market that way. We know the technology is there. It can be done cost effectively already. All it needs is a cleared switch either through the Water Fittings Directive or through the building regulations to make that happen. Joan Walley: On that point may I thank you so much for coming along. It has been very interesting and illuminating. It is the first of our sessions, so thank you very much indeed and we look forward to receiving the list that we referred to earlier. Memorandum submitted by the Environment Agency Examination of Witnesses
Witnesses: Sir John Harman, Chairman, and Ms Pam Gilder, Head of Policy Development and Promotion, Environment Agency, gave evidence. Q47 Joan Walley: May I welcome you, Sir John, and Ms Gilder. It is always good for the Select Committee to have the Environment Agency here. I think it has been quite useful and helpful too that you were in for our first session just now. By way of introduction, given that we are just kicking off on this inquiry, if you have any comments in the light of what you have just heard or on the general position of the Environment Agency, we would be very pleased to hear them. Perhaps you would introduce your colleague as well, Sir John. Sir John Harman: Thank you very much, Chairman. I am accompanied by Pam Gilder, who is the Head of Sustainable Development Policy in the Environment Agency. I am very grateful for her presence today because, as you can tell from my voice, I cannot guarantee that it will last out. By way of a brief introduction because I think it will be the direction in which members wish to take the questions, first of all, the Agency's locus in this simply arises from the observation that the built environment, of which housing is an important part, has a big environmental impact. I do not need to rehearse the figures. All of you on the committee know about the carbon impact of housing, the water impact and so forth. It is a very straightforward conclusion from that that we would take an interest in three major features of housing development: first of all, its location for obvious reasons, which include flood risk; secondly, its standards, and that was the discussion you were having with Paul just now; and, thirdly, infrastructure. They all seem to me to be relevant to you. The only thing in addition I would say is that I listened with interest to about the first 20 minutes of your previous session on the code. I would claim to be joint godparent of the code. If we get on to that, Chairman, all I want to say is that I am quite happy to answer on my own behalf and on behalf of the code and the Sustainable Buildings Task Group. You will get perhaps different answers (though I hope not too different) from the Agency. My locus with the code is not the same as my locus with the Agency. Q48 Joan Walley: Am I right in thinking that the Environment Agency was not a member of the Senior Steering Group for the code but that Sir John Harman in a personal capacity was? Sir John Harman: No. I co-chaired the Sustainable Building Task Group report which delivered its recommendations in May 2004. Since then I have had no formal role with the code. As a godparent I have watched it very carefully but I have had no formal role in that. My role with the SBTG was not on behalf of the Agency. It was in a personal capacity. Q49 Joan Walley: Just skipping to the Agency, has the Agency sought to influence the outcome of the code and where it is at at the moment in any way, or have you just been witnesses from afar? Sir John Harman: Not being a member of the Senior Steering Group, our ability to influence has been rather from a distance. We have kept in touch with officials from time to time but it has been more of a distant relationship. The Agency, of course, is quite keen to ensure that there is a satisfactory code, for obvious reasons. Q50 Mr Caton: Now that your godchild has gone out for consultation and in the light of the reasons that you have just heard WWF give for its resignation from the Senior Steering Group, what chance do you think there is that the code will make any real beneficial impact? Sir John Harman: I think we have to be very optimistic. It certainly should make an impact. I go back, if you will permit me, to the original report which I took the precaution of bringing with me but I could almost recite it, I believe. The recommendations were not just for a code, and it is important to recognise that and I think we can talk about the code to the exclusion of the other parts of the recommendations which were a substantial increase in the regulatory base for housing performance; they were also to provide a structure whereby clients and developers could do better with a series of incentives and information measures ("information" sounds a bit woolly) and the use of the code levels, whatever they are to be called (and we are now talking stars, are we not, so let us talk stars), as a means of communicating to the public, to ordinary house purchasers, what it was they were buying. We were offering the code partly as a ladder by which clients could show above-regulatory performance in environmental terms but also as a means of getting public demand going. One of the difficulties about both regulation and code is that they are both supply side mechanisms and you really do need somebody on the demand side to drive demand for better quality housing in environmental terms. To come back to your question, yes, I do hope the code can be effective. To be effective it will need to do what the task group originally required, which was to start from a good regulatory basis, particularly on energy and water efficiency, I might say, and to ensure that the advancing levels of the code signalled advancing levels of efficiency in energy and water so that you could not, as Paul King was saying was one of the weaknesses of the present proposal, get perhaps to level three without having gone beyond the regulatory base on energy, for instance. It needs to be progressive. Otherwise how will people know that a three-star is better than a two-star or a five-star is better than a four-star? If we can get that kind of progression I do think it will help to drive, together with regulatory improvements, the sort of vast improvement in the performance of housing stock that we require. Q51 Mr Caton: I hear what you say about regulation, but the fear is that most builders will not comply with a voluntary code and even those that do will go for the minimum requirement and not for the higher standard. Sir John Harman: That is certainly the fear, and the problem that the task group felt it had to try and resolve was that clearly you would want in those circumstances (and I think that is a reasonably good description of the mindset that the industry has as a whole, although I could find honourable exceptions) to construct a really demanding regulatory base and say, "That is how we do business around here and we are all going to play by those rules", but that in practice you would never advance a regulatory base to reach for the sky, so to speak. There will always be the possibility of people out-performing the regulatory base. If it was so demanding that it brought everybody to BedZED standards, for instance, would it ever be practical to have it as a regulatory base? What we wanted to do, therefore, whatever regulatory base one set, was to fight against this idea that okay, that is what we will all do, by providing first of all some measurements and then some incentives - and that is the key part - by which people would be incentivised to go further. The most powerful incentive, of course, is what your client wants and if your client is the public sector, fine; the public sector can be tasked to set a standard which is above the regulatory floor. If your client is the private house buyer then you need something in the market which will incentivise that person, whether they think it is a good quality house because it has got three stars or because there is some small fiscal incentive in order to move the market that way. The members of our task group as a whole believed that, given the right signals, the industry could move so that a substantial proportion of it could perform above the regulatory floor. One of the issues in that is that there is a perception that to do so is costly and the market will not accept that additional cost. There are only two answers to that. One is to provide the market with the information that can make sure that buyers are properly balancing the short term capital premium against the long term savings they will make. The second is to ensure that by volume, economies of scale, I suppose, the industry could deliver these additional requirements at the lowest possible cost, and our assessment was that this was not going to be a king's ransom. Q52 Mr Caton: So is there any difference between the lower level proposed for the code and existing building regulations? Sir John Harman: The task group envisaged the code taking off above the regulatory floor, so you had the regulatory floor and the first rung of the code was above it. Q53 Joan Walley: That was not contested by our previous witness, was it? Sir John Harman: I think it is a question of semantics, to be honest. If you have a five-stage programme, of which stage one is the regulatory floor, providing everybody understands that one star is the regulatory floor and they are not sold it as something else then I do not think it matters much. What matters is that you have a structure where you can move forward and that has to be progressive, as I have said. I have no particular axe to grind about making one star equal to the regulation providing that we realise that there are no no-star buildings. Q54 Mr Caton: Continuing with comparisons, which is more demanding: the highest level set out in the code or the Building Research Establishment's EcoHomes? Sir John Harman: At the moment the way the code is set out you cannot tell. I cannot tell from the consultation paper. I am sorry; I had the page open when Paul was talking and I have closed it again, but it makes it clear somewhere in the consultation paper that the question of what will define the levels appears to be still out for full consultation. Certainly that is what I am hoping because as it presently stands it would not satisfy the requirements I mentioned a moment ago about progressivity. We would certainly need a code where you could identify a level that was approximately equal to current EcoHomes "Very Good" for the very point that Paul King made, because you need to have a level that you can peg public clients to and it must not be worse than the present commitment of English Partnerships and the Housing Corporation to go for EcoHomes "Very Good". Where do I think the top of the code will get? I really cannot tell until the end of the consultation, but I would be very keen to ensure that it was stretching. We were talking about points. I am looking at the consultation paper and you need 80 per cent of the points to get to the top level. That would be EcoHomes "Excellent", I think, under any circumstances. Again, I am not answering for the Environment Agency here but the task group wanted to cut out the difficulties of creating a new system by using the existing BRE aim, so I am happy with that, and in so doing what we ended up with was something which would give the same sort of reliable measurements of performance as EcoHomes gives but do it on a scale which would be far greater. In answer to an earlier question, Paul said he could not tell you, and neither can I, how many homes are now being built to EcoHomes standards of any sort, but 18 months ago when we completed this work it was 5,000. That is not enough. Q55 Mr Caton: In your submission you talk about the need for local government to extend the code standards to private homes but you indicate that you are not sure how the Government intends to do this. Have you raised this issue with Government? Sir John Harman: We have in our own evidence on a number of things. Pam may be able to give you more detail but yes, we have. An issue which I do not think has yet been resolved in the private housing market, as I have already mentioned, is how you get incentives, perhaps through labelling. Another way that has been demonstrated in, for instance, Merton is to make (and they will not use the code; there was no code to use) an equivalent request part of a planning specification. There has been a lot of debate about whether this is appropriate use of the planning system. It is my view and the Agency's view that it can be and that it ought to be, that we should not be forcing local authorities to use the code in all circumstances but it should be available for them to say, "These are the standards we require in borough X and we will use our planning powers to help achieve them". The code then would give them a measure, a standard, if you like, which would enable that to be an easier thing to do. This is very much a question on which I have a view but no more than that. I have no particular lever on that one. Q56 Joan Walley: Can I press you on that point? I understand entirely about local authorities being free to do whatever is in the best interests of their locality but is there not a danger of reinventing the wheel so that for every planning decision that has been taken a huge amount of work is going to have to be done to incorporate or embed this basic floor level of standards into every single development that is coming about? We have got a tradition of planning guidance, in whatever guise it is adopted. Surely we should be setting a minimum standard? Sir John Harman: I agree with you: we should be using it to set standards. One of the purposes of all this was not to create yet another measurement for the building industry to get confused over. It was to displace the possibility of burgeoning different standards coming up and to have a nationally uniform standard, if you like, which the industry - and I include in that the planning industry - could use and we would all know what we were talking about. We have not got such a tool because we have not got a code yet. We have got proposals. Q57 Joan Walley: But there is agreement that the code should be the highest possible standard? Sir John Harman: The code should certainly get you to the highest possible standard. Five stars should get you to the highest possible standard. Q58 Mr Caton: Many of the memoranda we have received agree with your own submission that the Government needs to put in place fiscal measures to reward and encourage better environmental design. Have you seen any evidence that the Treasury is prepared to go down this route? Sir John Harman: Very little. Q59 Mr Caton: Is there anything in the Pre-Budget Report that leads you to feel encouraged? Sir John Harman: On the fiscal side? No, not particularly. There are other things, yes, but not on the fiscal side. Q60 Mr Ellwood: If I can move over to the Sustainable Communities: Homes for All publication by the Office of the Deputy Prime Minister, the Five Year Action Plan, could you give the committee a general overview of your impression of this document? Sir John Harman: Can I hand over to Ms Gilder at this point, partly because of my throat but partly because she is better placed to answer that? Ms Gilder: We have been tracking the progress of Sustainable Communities as a Government policy for some time so the publication of the Five Year Plan is just one punctuation mark in a policy development area that has been going on for three or four years now. Our honest interpretation to Government and to this committee is that for all of these things the devil is in the detail - global figures about housing numbers, the extra 200,000 posed in the Sustainable Communities plan, the ones that we saw last week for the Barker response, an extra 50,000 homes by 2016. So much in terms of the environmental dimension depends on where those homes go, the infrastructure that supports them and the standards to which they are built. As we found with your previous questioning, there is that dependency and connectivity between all those things. Our approach since publication of that document and before has been to argue for better recognition of the environmental risks associated with poor location of new homes, making sure the environmental infrastructure, some of which probably is less glamorous than others if you are talking about sewage pipes as much as flood risk and roads and schools, is in place in advance of the houses going in. Thirdly, and what we have already been focusing on in the first part of this discussion, is the standards to which those homes are built. Q61 Mr Ellwood: That is interesting because the response by a number of NGOs, including the organisation we have just heard from, has not been very promising at all. There has been a discrepancy between the Sustainable Communities approach and that of sustainable development. There is a slightly different emphasis on whether you focus on developing from a sustainable position or whether it is involving the community as a whole on the direction in which you go and also the stress on whether it is voluntary or best practice or whether it should be slightly more draconian. The feedback that we have had from a number of non-governmental organisations is that they have not been very impressed with this. You say this particular publication is a benchmark or a line in the sand, but it is actually an indictment of the direction in which we are currently going and the progress we have made. I am getting the impression that you too find that you have reservations as to what has been achieved in this key area so far. Ms Gilder: We have experience of not only the base line of housing growth that is planned for the south and east of England and now the Sustainable Communities level of growth on top of that and potentially more with the Government's response to the Barker Review. What we are finding is that there are gritty issues that have to be tackled. We are an independent adviser to Government and we have made the case when we feel a development will result in environmental problems and deterioration which is probably not acceptable. In most of those cases, and I have to say they are relatively few, we have had fairly thorough and frank and honest discussions with Government and in many of those cases I think we can come away saying that we helped negotiate a better solution as a result. I think it is important to be honest and mature about these things and say that there are going to be gritty issues and we need to tackle them, not pretend that there are not any because that does not get us very far at all. Q62 Mr Ellwood: Can I try and tease out of you whether or not you would advise a more robust approach? In your evidence you have made a comment about the fact that over 30 per cent of homes do not comply with building regulations. Do you see that there is scope for us to have building regulations in force in a much tougher style than we currently have? Ms Gilder: Yes. It is interesting that we do focus on building regulations in terms of upping the standard. If we up the standard without thinking about compliance we may find that we do not deliver necessarily anything that is better on the ground. I know the Government is thinking long and hard about the future of building regulations in the round but one thing is for sure: if there are 30 per cent of homes (and some people think it is more than that) that are currently built which do not comply with building regulations that is a pretty worrying aspect. Our argument is, as well as looking at improving the regulatory floor, particularly in some areas where there is not a good regulatory floor like water efficiency, the code for sustainable homes as it is now called, to really pull up and develop a much more innovative approach by industry and compliance, you start to get a better package. These things have to be looked at as a broad package of measures that have to go forward. Q63 David Howarth: On building regulations compliance, do you think there might be a problem in the way building regulations are enforced? The system which I still think of as the new system where there is competition between various building inspectors to supply the servers of building regulation inspection - do you think that is the right model if we move to a far more environmental regulation model of what building regulations are supposed to do? Sir John Harman: There is an even bigger change. The building regulations are now being asked to do a number of things about how the house performs after it is built. The system was created to mostly control the building process. That shift of emphasis automatically means that there needs to be a good look at exactly what building regulation inspectors are trained and skilled to do. I happen to believe that the system is rather under-resourced but there is a shift of emphasis which is going to have to reflect itself in practice. That is regardless of whether you have the previous system or this competitive system and that is very relevant. Q64 David Howarth: One possible relevance is that, because of the element of competition, the resource that goes into building regulations inspections between local authorities is constantly being put under pressure. I remember when I was leader of a council I was constantly under pressure to reduce costs in that area because otherwise they would not get the business at all. Sir John Harman: That is also true. It is all recovered from fees and therefore you have to be competitive in the market. Q65 Mr Ellwood: You mentioned in your memorandum that the ODPM was conducting a review of the incentives for improving the efficiency of existing stock. That was announced in September. Are you involved in that review? Ms Gilder: We are very interested in the review. We are not one of the original founding members of that group. When it was originally announced, it was an ODPM, Defra and Treasury tripartite arrangement. Since then you will not be surprised that we have made advances to ODPM saying we think we have something to offer that group. They will be looking to us to contribute our input, particularly on retrofitting for water efficiency, where we have quite a considerable level of expertise. We will be looking at some of the broader issues. Q66 Mr Ellwood: You have not been formally invited to participate in the review? Ms Gilder: No. We have seen the terms of reference so we know what scope that group will cover. Q67 Mr Ellwood: Do you know if it includes private housing? Ms Gilder: It does because that is where the bulk of the savings from retrofitting will sit. Q68 Mr Ellwood: Do you know when the review is due back? Ms Gilder: From memory, it is a fairly speedy piece of work. I can ask my colleagues in Defra and the ODPM to make you aware of the timetable for that. Q69 Mr Ellwood: My final question is to do with your comment to us regarding the work the ODPM is doing in relation to flood resilience in building and building regulations. Can you update us on how this is progressing and if there is anything emerging from a concrete perspective? Ms Gilder: The work we are doing with the ODPM is essentially starting to test materials that we could specify through building regulations that are flood resilient. Having done some research in preparation for today, my understanding is that we are building and helping to fund test facilities to look at the resilience of certain materials against certain levels of flooding so that those materials could be specified in building regulations. We are doing the early analysis work. Q70 Mr Ellwood: We will not see anything for a little while? Ms Gilder: It is probably a programme of liaison with the ODPM that goes on over about a two-year period but I will check that and report back. Q71 Joan Walley: It would reassure me to know whether or not that work includes the idea of water efficiency savings and is not just looking at the use of water or the amount of water that is needed, but ways in which water usage can be prevented. Ms Gilder: The work on flood resilience we are doing with the ODPM is for incorporation in building regulations at some point in the future. The Government is already committed to including water efficiency in either building regulations or water fittings regulations. Q72 Joan Walley: The Environment Agency is able to give assurances that the amount of work that might be needed on that score which was referred to in the previous session is being already included in the remit? Ms Gilder: Of the retrofitting group? Q73 Joan Walley: Both groups. Ms Gilder: I can reassure you on the remit of the retrofitting group that water is included, looking at existing homes. We are also quite reassured by the Government's statement last Monday to look at water efficiency in all new homes. Sir John Harman: That means delivering both through building regulations and water fitting regulations. Part of it at least must go through building regulations. In relation to Mr Ellwood's first point on the sustainable communities plan, it so much depends on location. It is very hard for us to comment just on sheer numbers. For instance, Pam referred to specific areas where we have been able to do work. We might have been asked to do it earlier, but Corby is a case in point. Twenty-something thousand houses were proposed but we have had to do at least a year's work to establish what the water cycle requirements are for Corby. It would have been better had that been done ahead of time but it has demonstrated that there was a problem with that particular proposal. It has had to be resolved. It has delayed some of the timescales for development but it has been resolved. Until you see it side by side almost, it is very hard to know what the impacts are going to be. That is not on the houses' performance as houses; it is on their sewerage requirements, their water supply requirements, flood defences and so forth. One thing we did welcome last week was the announcement that we are going to be involved in at least the first screening of locations. That is an advance because up to now we have been kind of catching up. It is really important that we identify where it is going to be so difficult to provide the proper infrastructure that it is really not worth going there. Joan Walley: If there are other issues that relate to the site-specific nature of where you need to be involved at the earlier stage and you think there are other issues which could be raised within the remit of our inquiry, we would be very happy to have that from you because that site-specific nature is very important. Q74 David Howarth: We are talking quite a lot about the Government's response to Barker. I was wondering whether you have been involved in discussions with the Treasury and the ODPM in the run up to the government's response? Ms Gilder: We were involved in several ways. I sat on one of the official sub-groups that looked at the Barker work and we were one of a rather extended number of stakeholders involved in the sustainability study that the government commissioned, which was another document that was published last Monday. Q75 David Howarth: Is there anything else about the response to the Barker Review that you want to mention now that came out of that work or the response itself? Ms Gilder: To reiterate the point that we have already made, the devil will be in the detail of a lot of this. Although the sustainability report looked at the environmental impact and the social impact of extra Barker numbers, they were only looking at the extra on top of an existing, quite pressurised environment in some parts of the country, particularly in the south east. They were not location specific and that will always, for us, be a very important aspect. They did not cover necessarily all of the things that we are finding through our day to day work are important about water quality as much as water resources, sewage as much as flood risk. It is interesting early information that we can use but we have to think about this as something that will go on and on until we see the devil in the detail about where these individual homes will go. Q76 Dr Turner: Your memo is very concerned about infrastructure investment. You say that for secure, sustained investment the government needs to get resources from private and public sources so that environmental infrastructure can overcome the predicted environmental impacts of development. You go on to say that this investment must be planned ahead and even be a precondition of growth. Is the government doing this? Sir John Harman: It is not doing it as well as it might. Yes, it is doing some of it but, to go back to the Corby example, a solution is being found. The problem in Corby is that you want to put nearly 30,000 houses on top of an area with no main river to take away the sewage. In order to find a solution, it requires quite a lot of work with Catalyst Corby, the borough council, the government office, water companies and so forth. Yes, that work is being done. It ought to have been foreseen a bit earlier. It ought to be a bit more systematic, that we are going to sort these things out in advance. That is what I took to be the intent of last Monday's announcement on this, which we welcome. To some extent, these things are being thought about later than they should be. The three areas for us are the sewage and drainage infrastructure, flood defence and water supply. Water supply is very difficult. You can get so much in terms of good standards for housing from water efficiency and management but it is very hard to guess how much you are going to get in the timescale in which you would have to develop new resources. You quoted our evidence where we said we thought that, of the dozen or so proposals in water company plans for new reservoirs, maybe four or five will come to pass but not soon. There is much talk of an upper Thames reservoir. That could take, in any reasonable estimate, until 2020 to have in place. On something like that you need a lot of foresight. We can provide the committee with details of where, in the south east of England, the water supply areas are in good balance and there is a good excess of supply over development and where that is much thinner. I am sure you have seen these maps. In many supply areas there is sufficient headroom for development. Given that the water resource plans for the water companies are 20 year plans anyway, there is in no case an issue where we are going to hit the buffers in the next couple of years. We need to see what is going to be extended, particularly in the Thames region, to extend the supply side or to meet new demand. That was the reason Thames Water brought forward recently a proposal for a desalination plant in the estuary. There are short term fixes and long term fixes. If you are going to require a long term fix, you need to start in good time. The issue of water supply is one where the timescale is most challenging. Q77 Dr Turner: Would it be fair to say that the work should have started at least two years ago if you are going to get the results in time? Sir John Harman: To some extent the work should have started 15 years ago, but I do not know that I would put a particular date on it. There is an issue in that water companies have to make a return on capital. They are not going to make unnecessary investment, quite rightly, and there is an economic regulator that oversees that. The five year price settlements are not the ideal mechanism for planning 20-year infrastructures. I think it would be helpful to have a look at the infrastructure planning up to SR2007, to have a longer term framework of investment intent within which these decisions could be taken. Q78 Dr Turner: The water companies have to agree with you their 25-year water resource plans so there is an opportunity for you to pick up a lot of these issues there. Have you been satisfied with their plans? Sir John Harman: When we are not we say so. The last generation of water resource plans had our approval after a degree of coming and going between ourselves and different water companies. Since then things have moved on. The sustainable communities plan has come along; the Barker numbers have now come along as well. The last approved plans are now shorter. They were adequate at the time but, talking about the whole conglomerate of Environment Agency, water companies, government and so on, if we had foreseen the housing growth that was needed, we would have sought to have approved greater supply requirements. That was then but the next review is going to have to demonstrate how supply is going to be extended or demand management is going to be extended or both in order to meet reasonable supply development plans. It is quite tight. Q79 Dr Turner: This rather suggests that there is an urgent need to draw up a completely new set of resource plans. Is that happening? Sir John Harman: I think the cycle is due to recur in three years' time. I can check that. 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 ten per cent, 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 ten 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. |