Abolition of Regional Spatial Strategies

Memorandum from Anglian Water Services Ltd (ARSS 78)

The following submission is Anglian Water’s memorandum to the Communities and Local Government Committee Inquiry into the abolition of Regional Spatial Strategies (RSS).

Summary

1. Anglian Water is geographically the largest water company in the UK serving over 6 million customers in what is the flattest, most low-lying and driest area of the country.

2. Safe and secure water supplies in the future depend on long-term planning.

3. Our business is managed in five-yearly regulatory cycles against the framework of a 25-year Strategic Direction Statement. Both require the approval of our regulators and are strictly scrutinised.

4. Our business plan submissions are subject to extensive consultation and are heavily influenced by strategic engagement with a wide range of bodies, including consumer and community groups, elected representatives and other key stakeholders.

5. Our ability to plan and invest in infrastructure helps to underpin regional growth and tackles the impact of climate change – both of which are acknowledged as particular challenges to our region.

6. We operate within a defined framework to an agreed policy position. This certainty has helped us to deliver over £5 billion of private investment between 2005 and 2015, and a reduction in average household bills for the period to 2015.

7. Until a new local planning framework is in place there will be significant uncertainty in the planning system, which we see as detrimental to strategic planning and decision making processes.

8. We are concerned that the current policy void will lead to stagnation and delay the development of local plans.

9. We believe that it is imperative for there to be active co-operation between local planning authorities (LPA) on strategic (larger than local) planning issues. For example, river catchments and water resource zones extend beyond LPA boundaries. Therefore, growth within one LPA area will impact upon the environmental capacity within another. If the implications of growth and climate change for such cross boundary issues are to be effectively and efficiently managed, then we strongly believe that there is a need for planning at a strategic, sub-national but larger than local level.

10. We consider the proposed Local Enterprise Partnerships (LEP) to have the potential to fulfil a strategic planning function such as this.

11. Long-term water and wastewater infrastructure planning is dependant on having a robust forecast of future housing supply. Therefore, we recommend a continuation of Annual Monitoring Reporting (AMR) for housing delivery and supply, which was previously a statutory requirement for tracking progress towards RSS housing targets.

12. The twin challenges of growth and climate change, coupled with the sensitive nature of our wetland conservation sites mean that in some areas of the East of England it is becoming a major challenge to serve new development sustainably. Therefore, it is important to consider the implications of local development upon the water environment. To facilitate this we strongly recommend that the current support for Water Cycle Studies continues.

Anglian Water – challenges we face and the need for long term strategic planning

Figure 1. Impacts of growth and climate change on Anglian Water (2007)

Anglian Water is a statutory undertaker for the provision of water and wastewater services, and is geographically the largest water and wastewater company; providing services to over 6 million people and 125,000 businesses in the east of England and the town of Hartlepool in the north east. Our operational area is bounded to the south by the River Thames, to the north by the Humber Estuary, and extends from the east coast to Daventry and Milton Keynes in the west.

The characteristics of the area that we serve make it particularly vulnerable to climate change. Predominantly rural it is also low lying, with around 25 per cent being below sea level. Of our major assets, 60 are vulnerable to a 0.4 metre rise in sea levels, and more than 1,000 of our pumping stations are at risk of flooding. Our area is the driest in the UK, and the Environment Agency has assessed it as being one of ‘serious water stress’. This area also has one of the fastest rates of housing growth in the UK, with a number of growth areas having been defined by the previous government (Figure 1).

We recognise that under proposed changes to the planning system, housing targets are likely to change from those outlined in the former RSS. However, the need for us to continue long term planning, at a strategic (defined in this context as sub-national but larger than local) level to meet the challenges of growth and climate change remains.

Anglian Water – strategic planning for investment to support growth

In our role as a statutory undertaker we have a duty under Sections 37 and 94 of the Water Industry Act to extend our services and provide for growth. For our current five year business planning period (AMP 5) over £450 million is planned for investment in our water and wastewater services to support growth. This includes a ‘step change’ in our level of wastewater investment (Figure 2).

Figure 2. ‘Step change’ in Anglian Water investment in wastewater services to support growth

In line with our long term strategy it is likely that this increase in investment to support growth will need to be sustained over a number of subsequent business planning periods. This will require support from a wide range of bodies, including consumer and community groups, elected representatives and other key stakeholders.

Wastewater Services

Below, please find a case study that is typical of the challenge we face in planning for long-term investment in our wastewater infrastructure. We believe this underpins the case we make for long-term co-ordinated strategic planning.

Case study - North Northamptonshire (Broadholme catchment)

Government targets are for 52,000 new homes and 43,000 new jobs in North

Northamptonshire by 2021 making it one of the most concentrated areas of growth in the country. The challenge of delivering this has prompted a new local partnership with the five districts coming together to form a joint planning unit to produce the Local Development Framework (LDF). This work identified the wastewater infrastructure as a key constraint to growth. As a result, the Environment Agency lodged objections to the Core Strategy to ensure this would be addressed.

A team involving the local delivery vehicle, joint planning unit, the Environment Agency and ourselves have worked to deliver a water cycle study to address this objection and move the planning process forward. As well as treatment capacity, there is a need to provide major reinforcement to the linked sewerage system connecting the market towns of Desborough, Kettering and Rothwell. Therefore, we included a proposal for a £17 million Kettering East Trunk Sewer within our Business plan submission to Ofwat. To date this is one of the largest sewerage schemes we have undertaken, but without this infrastructure development at the head of this wastewater catchment will cause unacceptable increases in flooding and environmental detriment.

The evidence that such reinforcement is both deliverable, and contained within our Business plan, enabled the Core Strategy to pass through the public examination process. Indeed, the collaborative approach was commended within the Planning Inspector's report. It is also this strategic approach, and the lateral endorsement from such a wide range of bodies that ensured support for funding by Ofwat. This collaborative approach is typical of how we manage strategic development across our region for the benefit of customers and the wider community.

Water Resources

Since 2007, water undertakers have had a statutory duty to prepare and maintain a Water Resources Management Plan (WRMP). Our plan informs our regulators how we plan to maintain a balance between supply and demand for water over the next 25 years, it is based on the 12 Water Resource Zones (WRZ) that make up the area within our statutory water supply boundaries.

As directed by the Environment Agency, our latest WRMP and our business plan submission to Ofwat used policy and trend based projections of population and property growth. These projections are aligned with central and local government growth projections. This enabled us to allocate population and property growth, based on Office of National Statistics population projections, and RSS/LDF projections respectively.

Using this forecast Ofwat approved funding of over £200 million for the next five years to meet challenges of growth, climate change and environmental legislation in the Anglian Water region. This investment is required on a strategic scale (sub-national but larger than local) across a number of our WRZ and includes resource development, strategic transfers, alongside demand management activities such as enhanced metering, water efficiency measures and additional leakage control.

Implications

Having regard to our statutory duties we have the following comments to make on the implications of abolishing RSS. These comments are in line with specific questions posed by the Committee:

1. The implications of the abolition of regional house building targets for levels of housing development.

We have identified a number of challenges that face the area that Anglian Water serves. The most significant are:

· Faster rates of housing and economic growth

· The need to adapt to the impacts of climate change

Our business is long-term, requiring us to plan often years ahead for the delivery of some assets, such as reservoirs and wastewater treatment plants. Hence we need to invest now to prepare for the future. This investment requires a robust evidence base, which will require a degree of certainty to be associated with housing targets. This is particularly important for investment in wastewater infrastructure, the need for which is also highly sensitive to the location of development.

Regional house building targets provided a degree of certainty that facilitated infrastructure planning, particularly at a strategic level. Once local plans are in place, they will provide a similar degree of certainty for infrastructure planning.

However, until then there will be significant uncertainty in the planning system, which will make it difficult to secure regulatory support for our investment proposals. This may in turn have implications for the timely delivery of new housing stock. It is important that the current policy void does not lead to stagnation in the development of local plans.

2. The likely effectiveness of the Government’s plan to incentivise local communities to accept new housing development, and the nature and level of the incentives which will need to be put in place to ensure an adequate long-term supply of housing.

In principle Anglian Water supports the proposals to incentivise new housing development. However, we strongly believe that this should not be at the expense of long term sustainability. Therefore, we consider it to be very important that the proposed presumption in favour of sustainable development is based on well developed national standards, which have been subject to a rigorous process of consultation.

3. The arrangements which should be put in place to ensure appropriate cooperation between local planning authorities on matters formerly covered by regional spatial strategies (e.g. waste, minerals, flooding, the natural environment, renewable energy, etc.).

The East of England has one of the highest long-term economic growth rates in the UK, with seven of the UK’s top 15 companies choosing to base themselves here, alongside over 430,000 other businesses. Taken together, they represent a significant engine for growth and attract thousands of people to come and live in the area. This sustained level of economic growth provides an area of focus for housing developers, and the strength of the local economy delivers to the Exchequer an annual contribution of around £6 billion year-on-year (East of England Business Forum, ‘Space for Ideas’ 2010).

Although RSS have been abolished, the challenges that face the former East of England region remain. To tackle them and underpin economic growth will require the consistent application of policy across all 63 district councils within our area. Such policy will need to be specific to the particular challenges that we face at sub-national level. Achieving this consistency will require support from government. However, it may be difficult to incorporate such specific support within a simplified National Planning Framework, and we consider it unlikely that this framework will have the capacity to make specific provision for the particular strategic issues that we face.

Therefore, we would be very supportive of any provision that is made for co-operation between local planning authorities (LPA) on strategic planning issues. River catchments and water resource zones extend beyond LPA boundaries, so growth within one LPA area could impact upon the environmental capacity within another. For such cross-boundary issues to be effectively and efficiently managed, we believe that a strategic planning function should be established.

4. The adequacy of proposals already put forward by the Government, including a proposed duty to co-operate and the suggestion that Local Enterprise Partnerships may fulfil a planning function.

We support the principle that LEP could fulfil a planning function. However, we believe that this function will need to take full account of the wider strategic perspective required for water and wastewater planning. In our view, investment decisions on issues like housing growth, transport infrastructure and water resource planning require this broader, more strategic coordination.

5. How the data and research collated by the now-abolished Regional Local Authority Leaders’ Boards should be made available to local authorities, and what arrangements should be put in place to ensure effective updating of that research and collection of further research on matters crossing local authority boundaries.

We recommend that the current statutory requirement for local planning authorities to produce an AMR on progress towards delivery of their local plan continues. This would ensure ongoing visibility of this information for infrastructure planning purposes.

The twin challenges of growth and climate change, coupled with the sensitive nature of our wetland conservation sites mean that in some areas of the East of England it is becoming a major challenge to serve new development sustainably. This has been recognised in work previously carried out to support the review of the East of England Regional Plan, which called for a properly resourced programme of Water Cycle Studies to determine whether growth at a local level is sustainable.

We recognise that under proposed changes to the planning system, housing targets are likely to change from those outlined in the former RSS. However, the need to consider the local implications of development upon the water environment remains, irrespective of any revisions to housing targets. Therefore, we recommend that the current Water Cycle Study approach to local planning continues, as it will help facilitate sustainable growth, and long term water planning.

Recommendations

1. That in line with current guidance, to fill the planning policy void at local level, we recommend that planning authorities are encouraged to continue allocating sites for development using the Local Development Framework process.

2. To fill the planning policy void at sub-national level, we strongly recommend that a strategic planning function be established to ensure co-operation between local planning authorities on strategic issues, such as the provision of water and wastewater infrastructure.

3. If Local Enterprise Partnerships fulfil a planning function, we would strongly recommend that it is a strategic one that takes full account of the wider implications of growth and climate change upon long term water and wastewater planning.

4. That planning authorities continue to be required to produce an AMR for delivery of their local plans.

5. That a properly resourced programme of Water Cycle Studies continues to inform long term planning for the delivery of sustainable water and wastewater infrastructure.

References

1. Anglian Water (2010) Water Resource Management Plan http://www.anglianwater.co.uk/environment/water-resources/resource-management/

2. Anglian Water (2007) Strategic Direction Statement. http://www.anglianwater.co.uk/about-us/statutory-reports/strategic-direction/index.aspx

3. Space for Ideas (2010) Blueprint for growth. http://www.eastofengland.uk.com/blueprint

September 2010