Memorandum submitted by Martin Dales (Ofwat
22)
EXECUTIVE SUMMARY
1. This submission is made by Mr Martin
Dales, Member of General Synod, whose Private Member's Motion
on Church Water Bills was debated in Synod on 11 February 2009.
2. Mr Dales raised the matter due to many churches
and other charitable bodies receiving sudden and unexpected increases
in their water bills of many hundred per cent due to the introduction
of surface water drainage charges.
3. The problem seems to be caused by a misinterpretation
by Ofwat of the Secretary of State's charging guidance of 2000,
exacerbated by Ofwat's more detailed 2003 guidance to the water
companies in charging all non-domestic customers on the same basis.
4. Mr Dales is also spokesman for DontDrainUs.org,
a loosely-affiliated umbrella grouping of those faith communities,
amateur sports clubs, scout huts, village halls (and those who
use their premises) who are trying to find shelter from these
rain taxes.
5. This submission addresses issues on two
particular points the committee is considering in relation to
Ofwat's Pricing Review 2009:
(i) how long-term planning for climate change
and environmental improvements should be paid for; and
(ii) affordability of water services.
INTRODUCTION
6. My attention was drawn to this issue
when Mr David Boddy, Churchwarden of St.Luke's Church, Thornaby
on Teesside in my own Diocese of York received a bill for his
church from Northumbrian Water which increased from £70 a
year to £910 a year, a massive rise for a large, inner city
church with a tiny congregation.
7. By way of response, in April 2008 he set up
an e-Petition on the Prime Minister's website which has so far
attracted over 42,000 signatures and, by far and away, is the
most supported one on the site.
8. It became clear, that the issue was not
purely one from Northumbrian Water area, but that there were problems
in United Utilities, Yorkshire, and Severn Trent areas too.
9. I thought of taking a Motion through
York Diocesan Synod but came to the conclusion that it would take
too long to then reach the General Synod's agenda.
10. In the end, I opted for a Private Member's
Motion which attracted 150 signatures at the July 2008 Group of
Sessions of the General Synod at York.
PRIVATE MEMBERS
MOTION
11. The text of the motion was:
"That this Synod, concerned about the effect
on many parishes of sudden, massive rises in water charges for
churches, requests HM Government to remind Ofwat of its obligations
to ensure that water companies adhere to the clear guidance given
by the Secretary of State for the Environment in 2000, which states
that "there are many non-household users who are not businesses
... including places of worship ... and it would be inappropriate
to charge all non-household as if they were businesses."
JULY 2008 TO
FEBRUARY 2009
12. In the period following the July 2008
General Synod, it became increasingly clear that problems with
surface water drainage charges were affecting a far wider constituency
than just Church of England churches.
13. It was affecting other denominations and
faiths' premises, community amateur sports clubs, scout huts,
village halls and the local groups who use them.
14. In December 2008, the Business Committee
of the Church of England General Synod agreed that my Motion would
go onto the Agenda for debate at the February 2009 Group of Sessions
in London.
15. By January 2009, it became clear that
other groups were looking to the Church of England to lead on
this matter and that the forthcoming debate would be the ideal
opportunity.
16. I did consider amending the Motion to
include all those affected but decided I could do this in my opening
speech.
17. On 11 February 2009, the General Synod
debated my Motion.
18. There voted 282 For, nil Against and
three Recorded Abstentions.
WATER COMPANIES,
OFWAT AND
GOVERNMENT
19. One of the greatest concerns customers
have had is with the response of the water companies to their
problems. Churches report that their treasurers, churchwardens
and clergy are in receipt of heavy-handed treatment from customer
service departments with the new charging starting immediately
even whilst being appealed, threats of debt-collectors and imminent
court action. In some cases, it has led to resignations of church
officers and even requests to the Bishop for closure of churches.
20. Ofwat says it thinks it is fair that everyone
in the non-domestic sector—businesses and charities alike—should
pay the same according to the surface area of their operation.
21. But the Government, in its 2000 Guidance
to Ofwat has said, "... that there are many non-household
users who are not businesses ... including places of worship ...
and it would be inappropriate to charge all non-household customers
as if they were businesses."
22. In the Government's Statutory Social
and Environmental Guidance to Ofwat in August 2008, it says, "Ofwat's
work can have significant social impacts". It's certainly
having that on the charitable sector.
23. In the same document, it also says,
"Surface water drainage charges should be set in a way that
it sensitive to actual use of this service by different types
of premises."
24. In the Government's "Future Water"
strategy report of February 2008 it says to Ofwat, "new consideration
is to be given to the arrangements for surface water drainage."
Is this because Ministers were aware the effect Ofwat's interpretation
of the 2000 Guidance was having on the not-for-profit sector was
unfair and not what Ministers had intended?
GOVERNMENT RESPONSE
25. Up until two days before the General
Synod debate on 11 February, there had been no response from the
Prime Minister, Secretary of State for Defra, or anyone despite
the huge petition on the Downing Street website, letters and representations
from MPs, Lords, Archbishops, Bishops, Diocesan Officials, Clergy
or Laity.
26. On 5 February, I sent a letter to the Secretary
of State for Defra in an attempt to get some sort of a response
before the General Synod debate.
27. On 9 February, I received a letter from
the Secretary of State saying, "Let me assure you that I
am very concerned about the issue you have raised. Our view, which
we have already expressed to United Utilities and Ofwat, is that
something is clearly very wrong if faith buildings, community
amateur sports clubs and scout huts are facing hikes in their
bills of several hundred per cent, and where there are massive
variations between what is being charged in different areas, by
different companies."
28. The Secretary of State continues, "We
have made it very clear that we believe these increases are not
in line with Defra's charging guidance to Ofwat in 2000 or Ofwat's
more recent detailed 2003 guidance to the water companies. I have
taken up these concerns with the company and Ofwat."
29. The Secretary of State seems to think
that this problem has been caused only by Ofwat and United Utilities—Northumbrian
Water was where this all started.
30. In the General Synod debate, there was
much concern to do with the timetable for the roll-out of these
charges across the other water companies' areas
31. There was also concern about whether
these new charges should be made in the first place and, if so,
is it the fairest, proportionate and most equitable way of charging?
32. Also raised was the matter of businesses
being able to claim their water costs and environmental improvements
against tax, whereas churches and others cannot. Who is subsidising
whom?
DONTDRAINUS.ORG
33. DontDrainUs.org was launched in January
2009 by the Dioceses of Manchester, Chester and Liverpool in the
North West to raise awareness of the issue nationally.
34.It exists as a loosely formed alliance of those
affected by the surface water drainage issue.
35. Currently, it includes churches, community
amateur sports clubs, scout huts and village halls.
36. It has two objectives:
(i) a review by the Government of the charging
mechanism with serious consideration given to regulations that
would either introduce a new charity band, or the return to rateable
value charging with exemptions or rebates for churches, clubs
and charities; and
(ii) an investigation into why Ofwat ignored
government guidelines to not charge churches, clubs and charities
as if they were commercial enterprises.
37. I would encourage Members to go to www.DontDrainUs.org
where there is a helpful amount of additional information on the
impact of these charges.
CONCLUSION
38. It is my belief, that the objectives
in paragraph 36 above, if achieved, would be a helpful start at
resolving the problems facing so many churches and charities.
39. If it was "inappropriate to charge all
non-household customers as if they were businesses" in 2000,
why is it happening now?
40. In "Statutory Social and Environmental
Guidance to Ofwat" (August 2008), it says, "Where the
Government wishes to implement specific social or environmental
measures which would have significant financial implications for
customers or for the regulated companies, these will be implemented
by Ministers, rather than Ofwat, by means of specific primary
or secondary legislation. The Government does not seek to do this
through this Guidance." I believe this could be another way
of resolving the issue.
41. I would be pleased to make myself available
for Oral evidence if the Committee felt it would be helpful.
Martin Dales
March 2009
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