Draft Water Industry (Schemes for Adoption of Private Sewers)
Regulations 2011
The Committee consisted of the following Members:
† Benyon, Richard (Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs)
† Bottomley, Sir Peter (Worthing West) (Con)
† Campbell, Mr Ronnie (Blyth Valley) (Lab)
† Carmichael, Neil (Stroud) (Con)
† Cooper, Rosie (West Lancashire) (Lab)
† Cox, Mr Geoffrey (Torridge and West Devon) (Con)
† Cunningham, Tony (Workington) (Lab)
† Duddridge, James (Lord Commissioner of Her Majesty's Treasury)
† George, Andrew (St Ives) (LD)
† Gilbert, Stephen (St Austell and Newquay) (LD)
† Hepburn, Mr Stephen (Jarrow) (Lab)
Heyes, David (Ashton-under-Lyne) (Lab)
† Kawczynski, Daniel (Shrewsbury and Atcham) (Con)
Paisley, Ian (North Antrim) (DUP)
† Reed, Mr Jamie (Copeland) (Lab)
Sheerman, Mr Barry (Huddersfield) (Lab/Co-op)
† Spencer, Mr Mark (Sherwood) (Con)
† Williamson, Gavin (South Staffordshire) (Con)
Sarah Thatcher, Committee Clerk
† attended the Committee
Third Delegated Legislation Committee
Tuesday 7 June 2011
[Mr Joe Benton in the Chair]
Draft Water Industry (Schemes for Adoption of Private Sewers) Regulations 2011
4.30 pm
The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Richard Benyon): I beg to move,
That the Committee has considered the Draft Water Industry (Schemes for Adoption of Private Sewers) Regulations 2011.
Thank you, Mr Benton, for overseeing our proceedings. I welcome the opportunity to introduce the regulations, the purpose of which is to effect the transfer of private sewers and lateral drains to the statutory water and sewerage companies. Under similar arrangements, sewers constructed before October 1937 were, under the Public Health Act 1936, automatically adopted as public sewers and are maintained by the water and sewerage companies. Since then, however, adoption has been undertaken on a voluntary basis. Although it was the likely intention of the 1936 Act and subsequent legislation that new sewers should be adopted, that has not happened on a universal basis, for various reasons. Even where adoption agreements were reached and new sewers constructed to the requisite standards, the adoption process was not always followed through.
The result is a legacy of unadopted private sewers and drains that has accumulated since 1937. Often, the owners of those assets—typically householders—are unaware of their responsibilities and liabilities. Repair and maintenance of private sewers can be very expensive for individual householders. Where drainage arrangements are shared, it can be difficult to recover costs from those who use the sewers but are unaffected by problems. Private sewers may run beneath a neighbour’s land or a highway, such that access is difficult and costly.
Although many private sewers function satisfactorily, the disparate ownership of those assets, which are essential to everyday life and public health, means that they are not always maintained in an economic and integrated way to a consistently high standard. There are examples of persistent sewerage problems that require attention. In addition, there is the inequity that private sewer owners pay not only for the maintenance of their sewers but, through their sewerage charges, for the upkeep of pre-1937 sewers, which are maintained by the water and sewerage companies under normal sewerage charges.
The transfer will place the owners of post-1937 private sewers on a similar footing to those with pre-1937 sewers. Successive consultations have concluded that an overnight transfer to the water and sewerage companies is the preferred approach. Not all sewers will be transferred. Sewers that carry only surface water and discharge other than to a public sewer will not be transferred. The same will apply to sewerage systems that serve a single,
centrally managed site or curtilage. An example might be a shopping mall or an industrial estate. Systems that drain to private treatment facilities or to septic tanks and the like are also excluded.Action is necessary to redress the failures of the 1936 Act. The objective is to ensure better maintenance of those currently private sewers, resulting in less environmental pollution; the minimising of threats to public health; fewer complaints from householders and businesses about what is perceived to be a costly and unfair burden; and fewer disputes requiring local authority intervention. In the longer term, an integrated approach will achieve a better managed sewerage system that has lower maintenance costs and is more resilient and effective. The water and sewerage companies, which already have a sewer maintenance capability, are well placed to take that on.
The impact assessment shows that costs are estimated to add to annual water bills an average of £5 per annum from 2011, rising to £8 per annum by 2019, in a range from £3 to £14 across the companies. Although increases in charges are never welcome, at up to a little over £1 a month, those relatively modest annual increases are preferable to a system in which costs fall unequally across water charge payers or unfairly on individuals. Overall, they represent a sound investment in the future maintenance of essential assets. The transfer exercise does not itself trigger major expenditure on those parts of the system that are working satisfactorily. It will be for the water and sewerage companies to assess and prioritise essential short-term maintenance or repair, or replacement in the longer term.
Regulation 3 provides for the Secretary of State and Welsh Ministers to make schemes for the transfer of private sewers and private lateral drains to the statutory water and sewerage companies. Sewers are defined as those drains that are shared. Lateral drains are those that serve a single property but lie outside the boundary of that property. Pumping systems that form part of the system will also be transferred.
To qualify for transfer, private sewers and lateral drains must be connected to the public system on 1 July 2011. Transfer itself will take place on 1 October 2011, with the exception of pumping stations, which may be transferred individually or in groups at any time before 1 October 2016. Sewers and related equipment that carry surface water only and that discharge other than to public sewers will not be transferred. Sewers constructed after 1 October are intended to be the subject of separate proposals for new build, mandatory adoption arrangements which are not under consideration today but will be the subject of consultation shortly.
Regulation 4 provides for the Secretary of State and Welsh Ministers to make supplementary schemes for transfer. Private sewers and lateral drains that are connected to a public sewer between 1 July and the commencement of section 42 of the Flood and Water Management Act 2010, which is currently planned for 1 October 2011, will neither qualify for transfer on 1 July nor be subject to the new build arrangements for automatic adoption, which will be effective upon commencement of section 42. Unfortunately, it was not possible to synchronise the dates, and it is therefore necessary to provide a supplementary transfer scheme to cater for sewers connected between those dates. Supplementary transfer is planned for 1 April 2012.
Regulation 5 provides for certain exemptions, including railway land, which would present operational difficulties for water and sewerage companies, and Crown land, where sewers will be transferred unless relevant land is opted out of the transfer.
Regulation 6 provides for sewerage undertakers to make a declaration to vest private sewers by publishing notices in the London Gazette and the local press and by individual notices to the owners of private sewers.
Regulation 7 provides that, where there are existing declarations, the provisions of the regulations shall not apply.
Regulations 8 and 9 allow for outstanding appeals to be discontinued and for section 104 adoption agreements which have been executed to cease. Where a sewer remains to be built or connected, a section 104 agreement will remain valid. Existing legislation provides for a right of appeal to Ofwat against the transfer of assets for both the owners of private sewers and third parties through whose land a drain may pass, or who may be disadvantaged by the transfer.
Finally, the regulations are relatively short-lived, in that they are subject to a sunset clause effective in 2016. The regulations provide a once-and-for-all transfer of private sewers, lateral drains and associated private pumping stations. Once the transfer is completed—by 2016 for pumping stations—the regulations will serve no further purpose and will be repealed automatically.
4.37 pm
Mr Jamie Reed (Copeland) (Lab): Colleagues will be pleased to hear that I do not want to delay the Committee any longer than is necessary, and the Opposition do not want to take the regulations to a Division. I declare an interest, in that my constituency home is served by a private sewer before it accesses the public network. However, as the Minister has made clear, the legislation is overdue, and it was clearly the intention of the previous Government’s Flood and Water Management Act 2010.
The adoption of private sewers, consisting of some 200,000 km of sewerage network, is estimated to be of benefit to 10 million homes throughout the country. It is a huge undertaking and cannot withstand any further delay. However, the transfer presents considerable challenges, requiring some serious answers to difficult questions. It is a matter of fact that water companies are concerned by some of the impacts of the changes. We need to consider the speed of implementation and the costs to the consumer, and to recognise that the size of some companies’ sewerage networks will double overnight.
None of us wants to be bitten by the unintended consequences of the transfer further down the line. The Minister has already spoken briefly about the effects of the transfer on customers. Can he be a little more precise? Does he expect there to be regional differences for consumers? How, for example, will the transfer affect customers’ bills in the south-west compared with the north-west? Can he give a guarantee today that, as a result of the transfer, no further people will slip into water poverty?
There are also consequences for local government. The Minister suggested that the transfer will save local authorities money. However, they and the Local Government Association disagree with that view entirely.
The LGA says that it does not recognise the figures from the Department for Environment, Food and Rural Affairs. How will the transfer affect local authorities financially? Does the Minister know whether that will be in a positive or a negative way? If so, will he be able to publish those figures?4.40 pm
Sir Peter Bottomley (Worthing West) (Con): In the past, I was a Minister with responsibility for the water service in Northern Ireland. I was at one stage the successor to the late Lord Elliott of Morpeth, as honorary chairman of the Water Companies Association—although it supplied water rather than dealing with foul water.
I want to raise a matter of detail. Towards the end, the Minister talked about the sunset clause being effective in 2016, but I think that in the regulations it is 2018. I wonder if he might tell us which is correct.
Presumably, the extra costs he spoke about will be taken into account by Ofwat in regulation of the capital expenses allowable to the statutory water undertakers. He might let us know, either now or perhaps by letter, whether the London Gazette is the appropriate place for Welsh orders to be made. That seems slightly surprising, but that may be the way the legislation is written.
Finally, the Minister talked about changes in the regulations, in time, regarding new build. After 1 July 2011, when these admirably brief regulations come into effect, will there be any possibility of people not knowing what their future liabilities will be if they do not know what the regulations are likely to be? My guess is that on new build, people will have to pay an appropriate amount to their statutory undertakers one way or another. If that is likely to be different, perhaps he could let me, or, even more importantly, them, know.
4.41 pm
Andrew George (St Ives) (LD): I should declare that I am co-chair of the all-party parliamentary water group and take a close interest in these issues.
I do not intend to detain the Committee unnecessarily. I have raised this issue with the Minister on a number of occasions. He corresponded with me following questions that were raised about the consequences of this rather ambitious transfer of private drains and sewers. The key issues at that stage related to the overall costs. In his reply to me of 9 February 2011, he indicated that the current estimate is an increase in annual sewerage bills of between £3 and £14 for water and sewerage companies. Of course, that is a rather wide range. Can he reassure us that that is the absolute, in extremis total cost to any bill payer?
Following on from the Minister’s opening remarks, can he make clear whether, according to DEFRA’s estimate or the advice he has received from Ofwat, there will be significant regional variations? He knows that the part of the country that I and a number of other hon. Members represent has significantly higher water bills than anywhere else in the country, and always has had. The last thing it would tolerate at the moment is being subject to a disproportionate increase as a result of this measure. It would therefore be particularly helpful to have clarification on that point.
There is also the question of the construction industry going on to estates, some of which are part completed, and the complexity of the regulations and how that impacts on the extension of estates where developers take on the responsibility for existing private sewers. In my letter to the Minister I raised the question of the number of pumping stations, which, according to the private sector, seems to be about three times that estimated by Ofwat. Will the Minister reassure us about the anticipated costs of adopting the pumping stations as well as the sewers? What is the latest estimate regarding the adoption of all the equipment associated with the private sewers?
4.45 pm
Richard Benyon: I am very grateful to the hon. Member for Copeland for his support for the measures. As he rightly points out, they were put in train by the previous Government. In fact, they have been mooted since 2003. They have therefore been consulted on extensively and are widely deemed to be the right way forward.
The hon. Gentleman and others asked whether I can give more accurate details of the potential regional differences, but I cannot at this stage. Ofwat provided the figure we have arrived at. That was done as recently as the autumn, when we carried out the last consultation on the subject. It is difficult to assess where exactly each different water company will sit in terms of the liability, but we are able to harvest the data from individual households where we know there has been a problem. It is worth reminding ourselves that we are talking about protecting some households, many of which may well be in poverty, from liabilities they did not know they had. They are faced with costs that could run into five figures—some are as high as £20,000. From time to time, we receive in our surgeries some very moving cases that involve severe difficulty for individuals. The measure spreads the cost across all the households, amortising it over a lengthy period. We hope, therefore, that it is fairer all around.
Members will be concerned to hear whether we have got those figures absolutely right, especially my hon. Friend the Member for St Ives, who rightly pointed out that there are particular concerns in the south-west. He knows that I am mindful of that issue, which I will talk about in a moment.
The hon. Member for Copeland asked whether I can guarantee that no house will fall into water poverty as a result, I assume, of the measures. This approach will be
fairer for households. I cannot make a nationwide pledge that no house will fall into poverty as a result of these regulations, because the measure of water poverty can be a marginal thing, and £5 or £6 on a bill could put a household in that bracket. To be perfectly honest, I cannot give that assurance, but what I can say is that the Government are mindful of the whole affordability issue and we are implementing the Walker review’s recommendations on affordability. We will introduce a water White Paper in November or December. It will address the genuine concerns about affordability and look at a range of issues to make sure that we minimise the impact of water charges on families on low income.The hon. Gentleman mentioned local government. My local authority is frequently brought in to arbitrate or deal with disputes where liability is suddenly discovered and a great deal of negotiation is required. It is estimated that this transfer will result in savings of £42 million per annum for local authorities. That figure was reached through the exhaustive processes of the Flood and Water Management Act.
Turning to the remarks of my hon. Friend the Member for Worthing West—well spotted! I apologise for saying 2016; I meant to say 2018, but I have forgotten my spectacles today and obviously misread the date. He is right to point out that if that information were in just the London Gazette, it is unlikely that somebody in the furthest reaches of the Principality would have access to it. That is why it is also published in the local press. Individuals will receive notice that their sewers are being adopted, as will third-party people affected where drains and sewers cross their land. They will have a right of appeal if they feel that the value of their property is affected by these measures.
My hon. Friend the Member for St Ives made some good points. He is aware of the measures that the Chancellor announced in the Budget to assist in righting the wrong that has too long existed in the south-west. We are determined to follow that through. As he knows, we are consulting on that at the moment. He asked me to give a clear indication of the extremities of cost, and I have given him the bracket of likely increases that we have been given. We will continue to monitor that. I can assure him that I will keep him, and any other Members, involved if it appears that those figures are different. We have no formal indication that they are wrong. If we do, we will consult hon. Members from his region or from any other region that is adversely affected.