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Over five million properties in England are at risk of flooding. At the same time, the UK faces increasing economic and environmental challenges in securing clean, reliable and affordable water supplies. The forthcoming Water White Paper and Natural Environment White Paper present welcome opportunities for the Government to define a comprehensive and holistic approach to flood and water management. However, the extended first Parliamentary session must not delay the introduction of any arising legislation, if regulatory changes are to be made without disrupting the water price-setting process.
Flood Management
Adequate and stable funding must be available to those charged with putting legislative measures into practice. The Flood and Water Management Act 2010 (FWMA) places new responsibilities for planning for and responding to flood events upon public agencies, including local authorities who must balance these new duties with other demands on their limited budgets. These demands potentially include increased contributions to local flood defence projects if some of these are to proceed in the next few years. We believe that councils should aim to give flood protection work the same level of priority it is accorded by the Government.
With an £8 return for every £1 spent, timely investment in flood defences provides significant economic as well as social returns. We welcome the priority Defra places on protecting flood defence budgets and the efficiency targets that will help to better protect some 145,000 homes by 2015. Nevertheless, the £2.1 billion capital funding allocated under the Comprehensive Spending Review (CSR) for the next four years represents a cut to planned spending on defences. Simply to maintain the current level of protection in the face of increasing flood risks requires increased investment and the significant CSR cuts will increase concerns that funding on flood defences remains inadequate. The debate on how to ensure that beneficiaries pay a greater proportion of the costs of flood defences is at an early stage, thus it is by no means certain that any shortfall in public funding can yet be made up by private contributions. Ministers must spell out how the Government's aim of focussing public funding on those communities at greatest risk who are least able to protect themselves will be achieved in practice. Defra should place a statutory duty on Fire and Rescue Service Authorities to ensure that these bodies prioritise flood rescue work within their constrained budgets.
While a blanket ban on new development in areas of flood risk is not practicable, the Water White Paper should set out a clear framework for planning policy in such areas, including how the costs of providing flood defences for new developments should be apportioned. Government and the insurance industry must work urgently to reach agreement on the broad terms under which the industry will agree to provide households with flood insurance cover after the current 'Statement of Principles' expires in 2013.
The greater use of sustainable drainage schemes (SUDs) is supported but councils dispute the level of resources available to them to fulfil their FWMA duties to adopt and maintain SUDs. Defra should undertake further work into how SUDs responsibilities should be allocated and funded. Any Internal Drainage Board reform should be on an incremental, localised basis, not on a "one size fits all" approach. Defra should consider the potential for these Boards to use their resources to undertake river course maintenance on behalf of the Environment Agency.
Water Management
The Water White Paper offers the opportunity to set out clear proposals to sharpen the regulatory framework so that it is better able to respond to future challenges and provide a stable basis for the long term future of the water industry.
We recommend that the Water White Paper should:
- put strengthening the views of customers at the heart of its regulatory reform proposals;
- set out clearly the extent to which social tariffs are intended to be used to help customers who have difficulty paying their bills and how the interests of all bill payers will be balanced with the needs of this group of customers and in a way which is fair to other bill payers;
- set out how the Government will address higher household water charges caused by the need for large-scale capital investment in some regions, such as the South West of England. The solution must not simply redistribute these higher costs within the region yet it must also be fair to all customers nationally. Several solutions could achieve this including a hybrid approach whereby a social tariff is applied across the country but is weighted to recognise substantial regional variance in bills, and
- propose a clear strategy for implementation of a wider programme of metering and variable tariffs to help spur water efficiency while protecting those on low incomes from unaffordable price rises.
Furthermore the Water White Paper should:
- propose stronger measures to enable water companies to recover bad debts, which are costing each customer who does pay their bill an extra £12 a year;
- pave the way for measured introduction of competition into the water industry, which maintains certainty for investors over the future regulation and structure of the industry, and
- set out specific proposals to enable the wider value of water to be reflected in policies and charges, including a clear programme for reform of the abstraction licensing regime, and urgent action to improve water quality to meet EU Water Framework Directive objectives.
Waste water management
Water and sewerage companies must be given stronger powers to act on misconnections to the sewerage system. Ofwat must scrutinise carefully the costs to customers from water companies taking over responsibility for private sewers and lateral drains.
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