Memorandum submitted by the Drinking Water
Inspectorate (DWI) (Ofwat 20)
SUMMARY
1. The drinking water quality improvement
programme supported by DWI for inclusion in final Business Plans
for Periodic Review 2009 has been subjected to detailed assessment.
The programme is considerably smaller in scale by comparison with
the improvement programmes supported for the AMP3 and AMP4 periods.
The programme has particular focus on preventative integrated
management of risks, with due regard to the need for public water
supplies to be safe, clean and compliant with regulatory standards.
We strongly advocate that provision be made for a consistent,
sustainable level of asset maintenance to maintain public confidence
in drinking water quality.
INTRODUCTION
2. The Drinking Water Inspectorate (DWI)
was established in January 1990. We are responsible for the regulation
of drinking water quality in England and Wales. We check that
public water suppliers supply wholesome water, and comply with
the requirements of the Drinking Water Quality Regulations. Our
functions include the audit and inspection of water companies
and enforcement of regulations; investigation of consumers' complaints
and incidents affecting drinking water quality; and provision
of advice and undertaking research on drinking water quality problems.
3. We report annually to the Secretary of State
for the Environment, Food & Rural Affairs, and to the National
Assembly for Wales. DWI operates as an independent Inspectorate,
and decisions on enforcement and prosecution are made by the Chief
Inspector.
4. We welcome the opportunity to submit
evidence to the EFRA Committee inquiry into the current Periodic
Review 2009 of water price limits led by the Water Services Regulation
Authority (Ofwat).
CONDUCT OF
THE REVIEW
For Draft Business Plans:
5. DWI Information Letter 02/2008 set out
our guidance on drinking water quality requirements for the 2009
Periodic Review of price limits. It stated our objective as:
"For PR09, water companies are expected
to address all statutory drinking water quality requirements as
set out in Defra's recently published Statement of Obligations.
In particular, the Inspectorate will look to ensure that water
companies have paid due regard to the need for public water supplies
to be safe, clean and compliant with all regulatory standards,
and that provision be made for a sustainable level of asset maintenance
to maintain public confidence in drinking water quality."
6. This Letter also provided the regulatory context
for the review; the principles to be applied to justify the need
for investment in drinking water quality improvement schemes;
information requirements; and our methodology for assessment of
submissions by water companies.
7. In response, water companies submitted
a total of 266 proposed improvement schemes. Our assessments of
these were summarised in Preliminary Assessment Letters (PALs)
to companies for each submission, indicating that we were minded
to support the scheme for inclusion in draft Business Plans (total
114 schemes); or that we declined to support the scheme (120),
or there was insufficient information provided to decide on the
scheme (32). The PALs were made available to other stakeholders
for consultation purposes.
For Final Business Plans:
8. DWI Information Letter 11/2008 set out
our further guidance on drinking water quality requirements for
the 2009 Periodic Review of Prices. This Letter provided feedback
on the preliminary submissions process; commented on draft Business
Plans; and provided further guidance on specific issues and drivers.
9. Water companies, having considered our feedback,
addressed the caveats on supported preliminary improvement scheme
proposals, and reconsidered areas of uncertainty and information
gaps. They submitted a total of 192 improvement schemes for consideration
for inclusion in final Business Plans. Our assessments, including
consideration of the views of other stakeholders, resulted in
Final Assessment Letters (FALs) to companies for each submission
indicating that we supported 166 schemes for inclusion in final
Business Plans; that we declined to support 16 schemes and that
we commended for inclusion 10 improvement schemes separate from
the drinking water quality improvement programme.
10. The supported improvement programme
is considerably smaller in scale by comparison with the improvement
programmes supported for the AMP3 and AMP4 periods. The programme
has particular focus on preventative integrated management of
risks within the water supply service using the World Health Organisation
water safety plan approach that promotes protection of human health
and application of good water supply practice by seeking to minimise
contamination of source waters, reducing/removing contamination
through appropriate sustainable treatment processes, and preventing
contamination in the distribution network and the domestic distribution
system.
11. The conduct of our input to the Periodic
Review was complicated by a mis-alignment of the timetable for
implementation of amendments to the Drinking Water Quality Regulations
that came into force in December 2007 with that for the Periodic
Review process. A flexible approach by stakeholders, greatly facilitated
by constructive engagement by water companies, helped to minimise
the impact of this issue.
12. This collaborative approach has been
helpful. In addition to the considerable number of one-on-one
stakeholder meetings necessary for the process, we continue to
co-operate with other key stakeholders in various activities,
including in the conduct of consumer consultation; Chief Executive
level meetings; Senior Co-ordinator meetings; and so-called quadripartite
meetings at company level that involve the company, the Consumer
Council for Water, Environment Agency, Natural England and DWI.
Next steps for the drinking water quality improvement
programme:
13. For DWI, to put in place each individual
improvement scheme using appropriate regulatory actions, and to
report on its delivery.
14. For Ofwat and water companies, to include
supported improvement schemes in their final Business Plans and
Determinations.
15. For water companies, to deliver each
individual improvement scheme.
PLANNING AND
AFFORDABILITY
16. The risk assessment and management approach
promoted by the amended Drinking Water Quality Regulations requires
water companies to manage risks to human health by timely interventions
paced over short-, medium- and long-term timeframes as appropriate
to circumstances. The determination of economic solutions is a
matter for water companies: our expectation is that, in their
custodial management of water supply assets, they will establish
a consistent, sustainable level of maintenance activity that is
sufficient for them to meet their statutory duties.
17. We have contributed with other key stakeholders
over time to the development of various methodologies to help
water companies identify the level of reactive and preventative
maintenance activity required to ensure previous investment is
protected and further investment is well focussed. These approaches
include risk assessment using water safety planning methodology,
distribution operation and maintenance strategies (DOMS), and
the capital maintenance planning/common framework process. We
continue to encourage water companies to integrate the use of
such approaches to inform their strategic planning processes and
their Strategic Direction Statements (SDSs). We believe the consistent
application of this approach will best manage the prioritisation
and pace of maintenance activity, and its consequent impact on
consumers' bills.
18. Whilst the joint stakeholder consumer
research for the PR09 process, and that conducted by individual
water companies, confirm the high priority consumers place on
maintaining drinking water quality, we are acutely aware that
consumers pay for all water company activities. The methodology
we apply to the assessment of all potential statutory drinking
water quality improvement schemes challenges water companies to
demonstrate that the solutions proposed are effective, sustainable
and cost effective. We have also engaged with the other key stakeholders
to ensure best overall outcomes are sought for consumers, for
example, developing catchment management solutions that deliver
multiple longer-term benefits.
CURRENT REVIEWS
AND LEGISLATIVE
PROCESS
19. We have briefed the Cave Review and
Walker Review teams, and the draft Floods and Water Bill team,
on drinking water quality matters that may be relevant to their
on-going considerations. We are committed to facilitating innovation
in all the aspects of drinking water supply covered by these teams,
and in other areas, where developments have due regard to the
protection of health and maintenance of confidence in public water
supplies.
Drinking Water Inspectorate
March 2009
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