Conclusions and recommendations
Implementation of the Pitt Review's recommendations
1. The
draft Bill addresses 16 of the Pitt review's recommendations that
require legislation but falls short of providing a Bill which
also consolidates our principal water Acts. We recommend that
Defra continue working to produce the comprehensive legislation
that the Government has agreed is highly desirable, even if this
delays the Bill until the next Parliament. (Paragraph 9)
Water management and climate change predictions
2. The
Bill has been drafted against the background that climate change
will have an effect on both the availability of water and likelihood
of more extreme weather events. We recommend that Defra work with
the Environment Agency and the relevant bodies to ensure that
the Bill's provisions properly reflect the recently updated climate
change scenarios. (Paragraph 12)
Potential further clauses on flood and water measures
3. The
Department's pick and mix approach over what ultimately might
be in the Bill means that the process of pre-legislative scrutiny
is inevitably undermined. We recommend that if the Government
proceed to develop a truly comprehensive piece of water legislation
that the Committee be given a further opportunity to scrutinise
those parts of the Bill which are still very much work in progress.
(Paragraph 16)
4. With the Queen's
speech now scheduled for 18 November, a comprehensive flood and
water management Bill is unlikely to be enacted before the next
general election, due to the lack of Parliamentary time. Despite
many flood and water issues being inter-related and requiring
coordinated action, Defra may have no alternative but to consider
introducing a slimmed-down bill that covers only the most important
issues. If Defra pursues a slimmed-down bill it will lose this
once in a Parliament opportunity to comprehensively and thoroughly
address current water and flooding issues. We recommend the Government
adhere to Sir Michael Pitt's recommendation for a proper consolidating
Bill. However, if Defra finds it has no alternative but to introduce
a slimmed-down bill, it should consult stakeholders as soon as
possible on which provisions should be included. (Paragraph 17)
5. The inevitable
uncertainty caused by a 'work in progress' draft Bill could have
an impact on Ofwat's final price review 2009 price determinations.
We recommend that at the earliest opportunity (even during the
remaining part of the Summer recess) Defra make clear its intentions.
If it opts for a slimmed down Bill we recommend that rapid consultation
with the Environment Agency and the industry about what must be
in and what could be left out of the legislation. Our view remains
that such an approach inevitably means that the 'left out' sections
may have to wait years for a further legislative opportunity to
the detriment of properly addressing Sir Michael Pitt's recommendations.
(Paragraph 18)
Territorial extent
6. The
adoption of a river catchment based planning approach means that
close cooperation will have to be achieved between legislative
bodies both north and south of the boarder and in Wales. We recommend
that, in light of the fact that each legislature has a different
approach to water matters, Defra urgently assess how harmonisation
of the measures can be achieved. Given the Welsh Assembly's involvement
in developing this draft Bill we believe that there is merit in
the Welsh Affairs select committee examining their position on
this matter at the earliest opportunity. (Paragraph 20)
Key concepts and definitions
7. We
recommend that Defra redraft Clause 12 to clarify the roles of
the different tiers of local authorities and their responsibilities,
while allowing the flexibility for pragmatic local solutions and
partnerships. We further recommend that the Bill include an order
making power, under which the Secretary of State may alter the
tasks to be undertaken by local authorities, following full consultation
with interested bodies. (Paragraph 24)
National flood and coastal erosion risk management
strategy
8. Clarity
on the form of the National Flood and Coastal Erosion Risk Management
Strategy should be clearly provided on the face of the Bill; or
through an order making power subject to the affirmative Parliamentary
procedure. We further recommend that the Bill provides for the
strategy being reported to Parliament. (Paragraph 27)
9. We recommend that
Defra publish now details of how the strategy will be prepared,
scrutinised and how, and over what cycle, it will be reviewed.
(Paragraph 28)
Local authorities' strategies
10. We
are concerned that the draft Bill establishes a rigid vertical
structure, which potentially precludes pragmatic cross-boundary
area-based approaches that accommodate local people's views and
knowledge. We are concerned that local people do not have a seat
at the table and the Bill's proposals will dilute the ability
of an articulate community to influence decision making. (Paragraph
34)
11. Subject to any
concerns on national security grounds, the national flood risk
management strategy should be published in full to guide the many
organisations and bodies who will need to refer to it. Similarly
we see no reason for local authority plans not to be published.
(Paragraph 37)
12. The provisions
in Clause 22 provide the Environment Agency and local authorities
with a broad power over potentially a wide range of public bodies
and private individuals. We acknowledge the concerns raised by
Ofwat and accept that there could be an impact on customers' bills.
A balance must be struck between providing those with responsibility
for flood and coastal erosion risk management with the necessary
tools to do that job and ensuring that those bodies do not place
undue obligations on the water companies or others. We recommend
that Defra clarifies how this power is expected to be exercised
and in what circumstances it would not be applied. (Paragraph
40)
Conclusions
13. Defra
must explain how the national plan will relate to local spatial
planning. Local authorities are already responsible for the spatial
planning process, and this Bill also gives them a remit for flood
and coastal erosion risk management planning. Authorities will
have to fit the two together and synchronise the cycles for revising
and updating their plans. (Paragraph 42)
Cooperation
14. We
commend the water industry and Environment Agency for initiating
work to improve data sharing. We recommend that Defra consider
whether guidance on data sharing, including the safeguards that
should be in place, should be provided for in secondary legislation.
(Paragraph 45)
Supplemental powers and duties
15. We
do not consider the protections referred to in the consultation
document to be sufficient. We recommend that Defra include provisions
that establish appeal mechanisms against the powers of the Environment
Agency and local authorities set out in Clauses 34 to 49. Such
mechanisms must provide for an independent court or tribunal to
decide appeals. (Paragraph 49)
EU Floods Directive
16. We
recommend that Defra make clear to the European Commission the
benefits of including the provisions of the Directive in comprehensive
legislation and seek assurances that the UK will not be subject
to infraction proceedings before the Bill passes into law. (Paragraph
52)
Regional Flood and Coastal Committees
17. We
consider that the local authority proposal for catchment area
flood management boards, similar to Regional Flood Defence Committees,
has much to recommend it. We recommend that Defra explore this
approach with local authorities and bring forward provisions that
would enable the creation of catchment area flood management boards.
The Bill should require decision making bodies to explain how
they have taken into account any advice from regional advisory
bodies, or their reasons for rejecting it. (Paragraph 55)
Designation of features
18. We
are concerned that bodies that would be able to designate "things"
appear unsure about their scope or scale. The purpose of the provisions
is not in question but there needs to be greater clarity about
what could be designated, how the designating authorities would
coordinate with one another and how differences of opinion between
designating authorities would be resolved. (Paragraph 59)
19. Provisions providing
safeguards and appeals should be included in the Bill. The lack
of such provisions in the draft Bill is a serious deficiency.
The legislation would confer substantial powers on designating
authorities and the checks and balances should have been available
for this Committee to scrutinise and for stakeholders to comment
upon. We recommend that Clause 95 be amended to exclude the Minister
from the list of bodies that could consider appeals in relation
to Part 2. (Paragraph 62)
Reservoirs
20. Defra
should examine including a provision to establish a low-cost initial
assessment of smaller reservoirs. Reservoirs adjudged to be low
risk under such a system could be exempted from the panoply of
inspections and procedures currently set out in Part 3 of the
draft Bill. (Paragraph 66)
21. Defra should consider
whether the existing COMAH regulations might be extended to include
reservoirs. (Paragraph 68)
22. Defra should examine
with the insurance industry the scope for synergies between the
needs of insurance companies and the risk management aims of the
draft Bill, to minimise any additional cost for reservoir owners.
(Paragraph 70)
23. Offences that
are set out on the face of the Bill should be as clear as possible.
We recommend that Defra review the offences under Part 3 within
a year of the Bill being enacted to ensure that they are appropriate,
enforceable and if necessary amended in the light of experience.
(Paragraph 72)
Sustainable drainage
24. These
Clauses provide a starting point to resolve the long-standing
difficulties associated with the introduction and management of
SUDS. The wide-spread implementation of SUDS is a critical part
of future water management and therefore we welcome Defra's work
in taking SUDS forward. However, the current provisions leave
several questions unanswered on: the capacity of SUDS, the transfer
of approval powers, funding arrangements for the adoption and
maintenance of SUDS, and the potential for retro-fitting SUDS.
(Paragraph 77)
25. The Government
should ensure that the legislative framework provides sufficient
incentives for households and businesses to install rainwater
harvesting and grey water systems; and also prevents further erosion
of permeable surfaces. (Paragraph 78)
Reform of the Internal Drainage Boards
26. The
relationship between IDBs and local authorities remains crucial
to effective local flood risk management. Defra's proposals are
a blunt instrument if the intention is to enhance IDBs' environmental
protection role and give local authorities greater say over the
work of IDBs. While we accept the importance of IDBs working with
local authorities to deliver local flood and coastal erosion risk
management strategies, it is vital that IDBs' experience and expertise
in preserving high quality agricultural land is maintained. Defra
should consult with local authorities to establish whether the
statutory framework governing IDBs provides sufficient flexibility
to enable them to work effectively. (Paragraph 84)
Reducing property owners' and occupiers' impact
upon local flood risk
27. There
is a compelling argument that those who cause flooding should
bear some responsibility for their actions, or failure to act.
We recommend that Defra should include provisions in the Bill
to encompass causing flooding as a statutory nuisance. Those provisions
should provide the necessary protection for householders, while
not creating an overly proscriptive regime for the farming community.
Defra should ensure farmers and landowners have clear guidance
and advice on the practicalities of minimising flood risk from
their land. (Paragraph 87)
28. We recommend that
Defra provide clear guidance on the obligations and responsibilities
of riparian owners and provide practical advice on how they can
meet their responsibilities for the maintenance of watercourses,
rather than leaving these to emerge only through case law. (Paragraph
88)
Resilience
29. Defra
should do more to promote flooding resilience at the most local
level. The Bill should include a requirement on the Environment
Agency and local authorities to include in their flood risk management
plans a duty to promote resilience. (Paragraph 92)
30. The National Flood
Forum is an example of what ordinary people can and will do to
influence and control their flood risks. Those at risk of flooding
need good information about what products and advice are available.
Defra should consult the National Flood Forum and other local
groups about the scope for more comprehensive advice for those
at risk of flooding. The Department should explore the scope for
these groups developing, with Defra funding if necessary, a system
for reviewing and rating the effectiveness of flood defence products.
(Paragraph 93)
Water Administration Regime
31. The
proposals for the water administration regime appear appropriate.
We note the water industry's concerns that the provisions may
affect investor perceptions. However, those concerns are common
to many proposed changes to the regulation or administration of
the industry and should not prevent the inclusion of provisions
intended to protect consumers and preserve water supply. The principal
purpose of the water industry is the supply of potable water and
removal of wastewater. The regulator and the industry have a duty
of care to ensure that those core functions are not jeopardised
by water companies taking on other trading activities. (Paragraph
96)
32. We recommend that
when the Bill is introduced to Parliament it is accompanied by
a statement setting out Ofwat's assessment of the risks to water
industry investors of the Bill's proposed changes to the regulatory
regime. (Paragraph 97)
Licence conditions
33. We
accept the rationale for a process to alter standard licence conditions
without excessive bureaucracy. However, we consider it proportionate
for the provisions of Clause 234 to be balanced by a clear appeal
mechanism that should be set out on the face of the Bill. (Paragraph
102)
Penalities
34. We
agree that the period during which penalties can be imposed by
the regulator should be extended. However, we consider it proportionate
for the provisions of the Clause to be balanced by a clear appeal
mechanism separate from the regulator. We recommend that Ofwat
assess how the imposition of penalties affects companies' cost
of capital and that any increase in the cost of capital at future
price reviews attributed to the imposition of penalties should
not be passed on to the customer in the regulator's final determination.
(Paragraph 106)
Hosepipe bans
35. We
welcome the provisions in Clause 254. Much of south and east England
suffer water scarcity, which is set to become more frequent and
widespread. We note the concerns raised by the National Farmers'
Union and recommend that, when using the powers under Clause 254,
Ministers and water companies consider measures to mitigate the
impact on agriculture. (Paragraph 107)
Time limiting abstraction licences and water efficiency
36. Ofwat's
price review mechanism does not provide sufficient incentives
for water efficiency savings. We recommend that Defra include
provisions in the Bill providing for time limiting of abstraction
licences and water efficiency obligations on water supply companies.
Such provisions are essential to achieve the vision set out in
Future Water. In drafting these provisions Defra should consider
their potential impact on the cost of water companies raising
finance which would be borne by their customers. Defra together
with the regulator, companies and financial institutions should
consider how the legislation can be drafted to ensure the least
detrimental affect on the water companies' ability to raise finance.
(Paragraph 113)
Special mergers regime
37. In
a market without competition, Ofwat is right to be cautious about
the impact of mergers on customers' interests. It appears that
the Government and Ofwat are committed to competition in some
form. However, it would be inappropriate for the regulator to
prevent mergers purely to maintain their ability to compare companies'
performance. Defra should review the water industry's merger regime
with the intention of relaxing its conditions when greater competition
is introduced. Defra should ensure that any changes to the merger
regime do not reduce the protection for consumers. (Paragraph
121)
Surface water drainage charges
38. We
do not accept Ofwat's argument that there is sufficient transitional
flexibility in the regulatory regime to accommodate changes in
charging schemes. We recommend that Defra explore including provisions
in the Bill that create a subset of customers that could be excluded
from the new charging method and which recognise the real world
financial situation of not-for-profit organisations such as the
Scouts, Churches and village halls. (Paragraph 123)
Funding
39. The
provisions in this legislation can only be justified if the calculations
in the impact assessments produce an overall net financial benefit.
Despite Defra's assurances, we remain concerned that the impact
assessments are insufficiently precise and provide meagre evidence
to support their cost and benefit calculations. We note that Defra
intends to do further work on the impact assessments—that
is essential. Parliament will expect that, when the Bill is introduced,
its accompanying impact assessments provide a clear, accurate
exposition of the costs and benefits and how the funding will
work, particularly in relation to the new roles and responsibilities
for local authorities. (Paragraph 134)
40. We are not convinced
that local authorities will benefit from the transfer of sewers
to the degree anticipated in the impact assessments. There remains
some uncertainty about the costs of adopting and maintaining SUDS—until
these questions are answered doubts remain about the impact assessments'
robustness. (Paragraph 135)
Skills
41. We
welcome the Government's announcement of funding to improve local
authorities' skills. In its response to this report, Defra should
provide an estimate of how many local authority staff will benefit
from the additional funding; and how long it will take before
local authorities have sufficient numbers of appropriately trained
and qualified staff. (Paragraph 139)
Conclusions
42. Defra
has further work to do on the Bill and time is short. Even if
Defra have a Bill prepared for introduction immediately after
the Queen's Speech there is little realistic chance of it reaching
the statute book before the next general election. As a result
Defra might welcome more time to consider how to improve the current
provisions; as well as the inclusion of provisions to implement
the Cave and Walker reviews' recommendations; and consolidate
existing legislation as recommended by Sir Michael Pitt. (Paragraph
142)
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