Memorandum submitted by The Scout Association
(Ofwat 02)
1. BACKGROUND
INFORMATION ON
THE SCOUT
ASSOCIATION
The Scout Association is an international volunteer
led co-educational youth Movement founded in 1907. It seeks to
support development of young people in achieving their full physical,
intellectual, social and spiritual potential, as individuals,
as responsible citizens and as members of their local, national
and international communities. To achieve this, Scout Groups across
the country offer activities each week to 400,000 young people
aged 6-25 years old made possible by the efforts of 100,000 voluntary
adult leaders. Young women make up over 15% of our Movement and
Scouting has groups in every area of the country; from Wrexham
and Whitby to Birmingham and Brick Lane. The diversity of Scouting
broadly reflects contemporary Britain, with 4.5% of our membership
coming from a black and ethnic minority background. Indeed, some
of our fastest growing Groups are those which draw their membership
primarily from these communities.
The young people involved in Scouting come from a
wide variety of backgrounds, including some whose behaviour has
brought them to the attention of public agencies. TSA research
and experience illustrates that for all young people who participate
in Scouting it can be a vital mechanism for intervening to ensure
that they succeed in becoming responsible citizens. Specifically,
TSA research shows that young people who have participated in
a youth or sport club are less likely to drink or smoke, more
likely to exercise, more likely to have a good relationship with
other adults in their community, more likely to have parents who
trust them and more likely to be involved in their schooling.[2]
In partnership with police, social services and youth offending
teams the Scouts have developed a number of projects working with
young people who are at risk of offending or of anti-social behaviour.
It is a growing Movement, with over 15,000 young people joining
in the last year alone. At present there are over 32,000 young
people on waiting lists to join Scouting across the UK and the
number of volunteers working for Scouting is bigger than the combined
workforces of the BBC (24,000) and McDonalds (67,000) put together.
Scouting is delivered through 7,300 community based
Scout Groups, supported by 850 District Scout Councils and 95
County/Area/Region Scout Councils. There are approximately 4,500
buildings used across the country for Scouting, and local Scout
Groups are freeholders for at least 2,500 properties, with a further
1,500 leasehold properties.
2. THE INTRODUCTION
OF SURFACE
AREA WATER
CHARGING AND
ITS IMPACT
ON SCOUT
ASSOCIATION PROPERTIES
IN ENGLAND
AND WALES
In 2003 the Water Services Regulation Authority
(Ofwat) decided to introduce new guidance regarding the charges
to be levied for the disposal of water from Scout properties through
public sewers in England. Historically, Scout Association properties,
along with sports clubs, community groups and religious buildings,
have been given a very low rateable value. Moving to a non-permeable
site area method of charging has in some areas of the country
already increased some Scout Group's bills by £600, which
could translate to £1.5 million for the Movement as a whole.
Ofwat has given the water companies until 2010 to implement this
new charging structure for surface area water drainage services.[3]
To date only a limited number of the ten water companies serving
English regions have already introduced the charge—sometimes
labelled as "surface area" costs, "sewerage costs"
or "grey water disposal" costs on water bills. However,
all are at present required to introduce these costs within the
next year. Furthermore those who have sought to introduce exemptions
for charities and community organisations have been refused permission
by Ofwat.[4]
In correspondence with parliamentarians, Ofwat have
stated that they "understand why community groups are concerned
about rising bills" but point to the fact that "many
charity shops have seen their SWD charges reduced". To gauge
the impact of the introduction of a new charging structure for
surface area water drainage, The Scout Association has gathered
evidence about the costs incurred by a wide range of local community
and voluntary organizations. As part of this, The Association
conducted a survey[5]
of its Groups in England and Wales. This revealed how in areas
where the charges have been introduced they have already impacted
the financial viability of local community organisations including
Scout Groups. The following table gives details of reported costs
in areas where these charges have been introduced to community
groups and local charities including Scout properties:
|
| Venue | Previous Annual Charges
| New annual charges
|
|
| St Luke's, North Thornaby | £70.00
| £600.00 |
| Small Baptist church | £100
| £2,000.00 |
| Penrith RUFC | £671.42
| £4,105.18 |
| Southport Argyle Tennis Club | £740.00
| £2,407.00 |
| Carlisle Subscription Bowling Club | £94.58
| £1,233.00 |
| Hough Village Hall, Cheshire | £53.65
| £2,580.00 by 2011 |
| Alvanley Village Hall, Cheshire | £67.71
| £458.72 in 2008rising to £1,233by 2010
|
| Kelsall Community Centre, Cheshire | £400.00
| £1,600 |
| 1st Weston and Weston Point Scout Group Building, Cheshire
| £40 | £564
|
| 1st Halton Scout Group Building, Cheshire |
£37.80 | £198
|
| Accrington West Scout Group Building | £395.88
| £871.68 |
| 5th St Helens (Rainhill Open) Scout Group |
£259.92 | £459.10 (2-3 yearcharges—final quarterto come)
|
|
To give some idea of the impact that these charges could
have on all the 4,500 Scout buildings in England and Wales, respondents
to the Scout Association survey were asked to detail the size
of their buildings.[6]
Of nearly 400 respondents, around a third had premises 650m2 or
above, meaning they fall into the highest bracket for the rateable
value of surface water drainage. Just over half (54%) of respondents
also had a car park, whilst the vast majority (82%) had some surrounding
space. These facilities could both increase the area that these
Groups are charged for, therefore further increasing costs.
ACTIVITY BY
SCOUT GROUPS
TO MITIGATE
SURFACE AREA
DRAINAGE CHARGES
Ofwat have suggested that community groups should reduce
the amount of surface water that drains into the sewers by introducing
measures such as "soakaways" or rainwater recycling
facilities on their properties. To assess the feasibility of these
suggestions, Scout Groups were also asked about measures they
could take to deal with the cause of charges such as soakaways
and rainwater recycling. This identified that over half could
have a soakaway dug. The main reasons given for this not being
possible (39%) were a lack of space and the cost. 88% would consider
rainwater recycling, but many said the cost of putting in such
a system and the space needed was prohibitive. Furthermore, some
Scout buildings are not used for long periods over holidays, meaning
that capacities would have to be very high, or rainwater would
have to overflow, possibly incurring a cost once again.
The plausibility of these measures as a general solution to the
impact of this charges is also questionable. This is because water
companies have advised The Scout Association that unless Groups
can mitigate the entire drainage requirements of their property
they will be charged at the full rateable value of their property
as it is not possible to calculate where on a building the water
has been collected. This means that unless there is space for
a large enough soakaway or recycling water facility to take all
the water generated such measures would be ineffective in overcoming
these costs.
Ofwat also suggest that to reduce bills customers should
check that the water company's estimate of chargeable site area
is correct. This is something that Scout Groups who took part
in the survey state they have struggled with, and would also be
a lengthy process if all properties were to be visited. The Scout
Association are also concerned that such a proposal also leaves
the onus on Groups to challenge bills, rather than the water companies
to charge a fair rate for services.
SCOUT ASSOCIATION
ENGAGEMENT WITH
THE WATER
COMPANIES
The Scout Association has written to each of the Water Companies
responsible for water drainage services raising our concerns and
asking them to outline their stance on these charges. The following
table summarises their approach to introducing these charges.
They reveal the confusion that exists amongst the Water Companies
with some state they charge Scout properties as residential buildings,
whilst others state they will not consider any changes to charges
until 2010.
|
| Water | Response
|
|
| Anglian Water | They have no plans to change their method of charging.
|
| Essex and Northumbrian Water | No response received by The Scout Association to their enquiry.
|
| Severn Trent | Wish to exempt "special cases" including Scout groups but Ofwat have refused them permission to do so and so have started introducing the charge on an incremental basis.
|
| South West Water | Surface water charges are included within the per cubic metre charge for sewerage. They are currently making plans to move to site area charging.
|
| Southern Water | Use either meter size or other flat fee at present. At present determining how to implement surface area water charging.
|
| Thames Water | Currently treat Scout properties as residential for charging purposes and have no plans to change this provision.
|
| United Utilities | Started to introduce charge, but decided to freeze bills for next year until a longer term solution can be agreed for the costs of surface water drainage.
|
| Dwr Cymru Welsh Water | Pledged to resist any pressure from Ofwat to move to site area charging. Charge is currently included elsewhere.
|
| Wessex Water | Charge a fixed amount based on rateable value or metering. Do not wish to change but fear they may be forced to do by Ofwat
|
| Yorkshire Water | Claim to have been charging by site area, since 2001-02.
|
|
SCOUT ASSOCIATION
COMMENT ON
DEFRA GUIDANCE TO
OFWAT REGARDING
ITS ACTIVITIES
The Scout Association believe the question of surface area
water charging raises many issues regarding the provision of water
services as a whole to social and charitable organisations and
the pricing strategies adopted by Ofwat. In particular, it is
unclear how these charges and the activities of Ofwat fit with
the social and environmental guidance they have been given by
DEFRA. This guidance, issued in August 2008, identifies as a "guiding
principle" for Ofwat that its activities should ensure "a
strong, healthy and just society".[7]
These charges will cripple many local community and voluntary
organisations as well as religious institutions who are a vital
part of the fabric of civil society. The Scout Association would
therefore argue that any activity which undermines the capacity
of third sector organisations to act is counter to this guiding
principle. It also sets out that there should be a "renewed
focus on affordability and fairness of charging for water".
The Scout Association would also commend to the Committee the
guidance given in the Water Industry Act 1999 intended to govern
the pricing review process. This states:
"in considering the future distribution of charges among
the customers of each company, the Secretary of State is concerned
to place the supply and regulation of water and sewerage services
within the context of the Government's approach to social issues,
and social exclusion in particular"[8]
Please see the recommendations for action section of this
submission for The Scout Association perspective on how to ensure
fairness in charging for water within this context.
Finally it is of note that the 2008 guidance also sets out
the policy development process that Ofwat is required to undertake.
This sets out that it is expected to use "impact assessment
where relevant" and "stress the need to include social
and environmental costs and benefits in policy analysis".
To date The Scout Association is not aware of any contact from
Ofwat regarding identifying how such a change in water charges
or indeed its pricing strategy as a whole will impact upon Scout
Groups.
3. RECOMMENDATIONS FOR
ACTION: INTRODUCTION
OF A
SOCIAL TARIFF
REGIME FOR
COMMUNITY AND
VOLUNTARY GROUPS
The confusion about the charges and how to implement them
as expressed by the water companies highlights why there is a
need to rethink these charges and the approach of Ofwat to regulating
all water service charges for community and voluntary sector organisations.
In a recent interview, the Government Minister responsible for
overseeing this issue has made clear that the Government considers
the principle of surface area water charging to be the most appropriate
mechanism for determining prices, and that it expects provision
to be made so that community and voluntary groups are charged
at a rate which is proportionate to their ability to pay.[9]
This interview also highlights the belief of DEFRA that there
is already provision within the guidance that has been issued
to both Ofwat and water companies to ensure fairer charging for
services to community and voluntary groups.
The Scout Association believe it is therefore timely for the Environmental,
Food and Rural Affairs Select Committee to consider Ofwat's pricing
review and how to ensure that it is meeting its obligations to
ensure the way in which it regulates the provision of water services
is consistent with the guidance it has been given. The Scout Association
believe that this review should have due regard to the provisions
made in the Water Industry Act 1999 and the guidance associated
with this document. This states:
"The Secretary of State expects the framework of water charging
to be one in which there is a fair distribution of costs between
customers recognising the affordability of the service for different
groups of customers as well as the costs of provision of services.
Costs should be allocated between different groups of customers
on an equitable basis."
To ensure a fair pricing structure that upholds the Government's
commitment to ensuring no group is excluded from water services
by the affordability of such services, The Scout Association believe
voluntary and community groups should be re-categorised and considered
a separate group of customers to businesses and residential properties.
This would then enable their needs and ability to pay for water
services to be considered in a more appropriate format. Indeed
The Scout Association would argue the response by Ofwat to the
concerns regarding surface area water charges reflects a lack
of recognition by Ofwat of the different range of needs within
the voluntary and community sector.
The Scout Association argue that the current difficulties
around water charges call for Ofwat to be instructed to develop
a clear and explicit pricing structure that can support the community
and voluntary sector and the ability of groups within this category
to pay water charges. In seeking such a pricing structure, The
Scout Association believe that there is a strong precedent set
by the provision within current legislative frameworks for tariffs
and capping of charges for vulnerable groups. For example, The
Scout Association would urge Ofwat and DEFRA to extend the principles
set out in their statutory guidance within the Pricing Review
and allow water companies to charge a social or "vulnerable
groups" tariff for organisations as well as individuals.
The Water Industry (Charges) (Vulnerable Groups) (Amendment) Regulations
2005 sets out as follows:
"The Vulnerable Groups Regulations were designed to limit
the bills of metered households on income related benefits who
need to use a lot of water because they have three or more children,
or because someone in the household has a prescribed medical condition.
These households cannot switch to an unmeasured charge because
many are in new dwellings and there is no rateable value on which
to base the bill. The regulations work by capping the bill at
the average for that water company area, so that however much
water the household uses, the bill cannot go above the average
figure."[10]
This would also reflect the guidance given by the Secretary
of State to Ofwat. The Water Industry Act 1999 guidance[11]
sets out the use of social tariffs as follows:
"The Secretary of State is keen to encourage the development
of innovative tariffs that can assist customers who may face difficulty
paying their water bills. The terms of companies' licenses require
them not to exercise undue discrimination between customers. However,
this does not wholly rule out the principle of social tariffs.
Water companies should be in the best position to design tariffs,
based on their knowledge of their customers and local circumstances.
Against this background, tariff structures should be designed
to mitigate the impact of bills on all low-income customers. Where
companies devise well-considered and workable proposals for social
tariffs, which do not have unacceptable impact on other customers'
bills and do not represent "undue discrimination" the
presumption should be that such tariffs should be allowed in charges
schemes."
The Scout Association argue that both these documents set
out a clear precedent for Ofwat to provide through its revised
pricing structure a tariff regime that recognises the impact of
high charges on local communities and society as a whole. This
could in turn provide for exemptions from charges or for capping
of charges to reflect the ability of some community and voluntary
groups to pay.
The need for explicit guidance on this point has been revealed
by the current difficulties caused by surface area water charges.
The Scout Association argue that the actions of Ofwat with regard
to the attempts by water companies to introduce charges specific
to community groups contradicts this guidance and so highlights
the need for greater clarity on the need to consider the ability
of this group of customers to pay by Ofwat. Creating a social
tariff regime for community groups and charities like Scout Groups,
churches and sports clubs would be the fairest way to charge these
organisations for the services they receive.
The Scout Association recognises the difficulties in defining
the categories of properties which could be covered by such a
tariff and the need to ensure that it is not misused. To overcome
this issue, The Scout Association believes the introduction of
a category for voluntary and community groups and the provision
for a social tariff regime within this category is best administered
at a local level. This could then enable water companies to act
as intended within the Water Industries Act 1999 in using their
local knowledge of community and voluntary groups to identify
those customers within this category who would be at risk of not
being able to afford water services and so act accordingly.
Therefore The Scout Association urge the Committee to commend
to Ofwat an explicit provision in its new pricing structure for
a social tariff regime for community and voluntary groups to be
introduced. The Scout Association believe such a provision should
also include stating that this would not contravene Condition
E of the Ofwat Guidance on Surface Area Water Charging issued
in 2003[12] regarding
"unduly preferential or unduly discriminatory" charges
for specific groups of customers.
The Scout Association
February 2009
2
nfp synergy survey Typical Young People The Scout Association
January 2007. Back
3
These charges will affect groups in England and Wales only as
Scotland and Northern Ireland have their own separate rules regarding
water charges. Back
4
Letter from Severn Trent to Stella Creasy 2 December 2008 For
further details please contact Severn Trent directly on 0121 722
4000. Back
5
Survey undertaken within The Scout Association by The Scout Association
Public Affairs and Campaigns Team 1 November 1 to 1 December 2008.
363 responses received. Back
6
Scout Association Survey ibid. Back
7
Statutory Social and Environmental Guidance to the Water Services
Regulation Authority (OFWAT), August 2008. Back
8
Water Industry Act 1999 Guidance from the Secretary of State to
the Director General of Water Services Department of Environment,
Transport and the Regions June 1999. Back
9
"Minister orders water companies to review huge `rainwater
tax' bills" The Guardian Newspaper 11 February 2009. Back
10
The Water Industry (Charges) (Vulnerable Groups) (Amendment) Regulations
2005
http://www.opsi.gov.uk/si/em2005/uksiem_20050059_en.pdf Back
11
Water Industry Act 1999 Guidance from the Secretary of State to
the Director General of Water Services Department of Environment,
Transport and the Regions June 1999. Back
12
RD 35/03 Ofwat's Guidance On Surface Water Drainage Charging
Issued To The Regulatory Directors Of All Water Only Companies
And All Water And Sewerage Companies 30 September 2003. Back
| 
