Environment, Food and Rural Affairs CommitteeWritten evidence submitted by the Chartered Institution of Water and Environmental Management (CIWEM)

1. CIWEM welcomes the opportunity to provide written evidence to the EFRA inquiry on the Water White Paper. We welcome the publication of the Government’s Water White Paper and believes that overall it places priority on the right issues for action, (although it lacks strength in a number of areas, particularly in its luke-warm support for metering and intelligent tariffing) and much will depend on the speed of its implementation.

2. We welcome the programme of work set out for 2012 which should ensure progress on a number of key issues: including a Water Bill; the focus on catchment approaches; a national strategy on urban diffuse pollution; guidance to water companies on social tariffs; a national SUDs standard and approval system and new guidance to OFWAT on social and environmental factors.

Are the proposals to protect and enhance water resources, for example on abstraction regime reform, likely to be fully effective?

3. CIWEM welcomes reform of the abstraction regime to ensure that our actions do not result in unsustainable exploitation of resources and to protect freshwater habitats from the pressures of climate change, demographics and consumption. We are also pleased to see the acknowledgement of the historical under-recognition of environmental needs.

4. Reformation of the abstraction licensing regime will result in the re-allocation of water rights to people, industry, agriculture and the environment, consistent with their respective needs, but subject to competition between them where and when water is scarce. Reducing household demand through targeted tariffing would assist in striking the right balance in this regard.

5. Prompt licensing reform is required, as soon as practicably possible, in advance of the late 2020s timeline alluded to in the Water White Paper. Even so, effective reform will take some time and in the meantime, the risk or reality of damage to the environment remains. That being so, we support the use of price incentivisation to water companies to avoid taking water from particularly vulnerable sites in low flow spells. And we support the timely completion of the Environment Agency’s Restoring Sustainable Abstraction programme, and the funding of arising costs in Ofwat’s PR14 determinations.

6. The requirement to reduce abstraction for environmental reasons often applies to good quality, low cost sources, often in catchment headwaters. Thus, to move abstraction to other sources often means using ones of poorer quality and higher cost, including any extra treatment and distribution costs. Savings from demand management initiatives, including metering and tariffing, could substitute for the reduced yield. The full environmental benefits of reduced abstraction from reduced demand need to be fully considered.

How best can the White Paper’s aims to promote water efficiency and the use of sustainable drainage be implemented?

7. The White Paper advocates water efficiency by individuals and by communities, and it provides pages of advice as to how it could be achieved. But it side-steps the crucial issue of the need to charge for water by volume used, ideally on a rising unit price basis and beyond essential need levels, and absolutely with protection provided through social tariffs (if not the benefits system) for the vulnerable and needy. Metering and tariffing requires water efficiency measures to be adopted to the levels required. Environmental awareness alone will not prompt sufficient behaviour change in sufficient numbers. Saving money, too, is a necessary and an attainable part of the case for saving water.

8. CIWEM welcomes national standards and a new approval system for sustainable drainage. However whilst much of the white paper necessarily focuses on the existing water industry and water supply systems, it is hard to believe that a document on sustainable water resources fails to mention rainwater harvesting or water recycling and re-use.

9. These do not feature to any significant degree in the UK water industry at present, unlike in other water-stressed countries. Any future strategy to supply more water to more people in a changed climate should look at emerging technologies in developed countries that currently experience a climate similar to that expected to exist in the UK in future.

10. As an example, new development in Australia sometimes adopts an integrated approach to water supply that combines SUDS-style drainage, rainwater harvesting and water re-use to meet water demands. These schemes operate on a community level—ideal for the larger urban expansion areas which are being considered for the water-stressed SE of England.

11. CIWEM considers standards need to be developed for recycled water use. Further information is available in our 2010 report Regulation for a Sustainable Water Industry.

Do you support the White Paper’s proposals on affordability of water bills for householders?

Does the White Paper omit any key issues where further policy action is required to ensure sustainable, reliable and cost-effective water supplies?

12. CIWEM has considered these questions together because we believe the White Paper contains a clear contradiction: how can we value water and not take it for granted, but yet not pay a price for water that properly recognises its true value? The fairest way to ensure this is to establish widespread metering allied to flexible and social tariffs. At present, most households incur zero cost for each litre or cubic metre of water they use. And they have no financial incentive to be more efficient in their use of water; in fact, it costs them more to reduce consumption, unless the water efficient devices they take up are provided free by their water company.

13. The significant issues to be considered here are many: current water consumption is not within sustainable limits, our water wastage is high, our natural environment is under significant stress and millions of customers struggle to pay their water bills. All of which are set to get worse with the onset of climate change and a rising population. Today’s system, based on 1974 rateable values, does not reflect water use, nor does it protect many low-income families from unaffordable bills.

14. We consider that affordability issues and metering should be addressed at the same time, as the two are inextricably linked: for metering and intelligent tariffing to work, we need to have affordable tariffs for the vulnerable and needy in place. That done, intelligent tariffs can be used to incentivise high consumption users to think again. The Government is aware of this, stating in an earlier affordability consultation in 2010 that: “some households face (financial) difficulties now and the problem is likely to grow as metering levels increase”. CIWEM believes the White Paper is weak on metering and is particularly alarmed by paragraph 6.14: “water is relatively cheap compared to many other household bills, and we want it to stay that way”. The Water White Paper is strong on affordability, but weak on charging for water by volume taken. In that regard, it misses an opportunity to promote the retention of affordable water for all who use water wisely, with only those who use high quantities being exposed to higher prices than they now face.

15. CIWEM believes paying for what we use is not only the fairest way to pay for water, it is also the only way to build the clear picture of patterns of water consumption which will be needed to move forward sustainably and to ensure that water is affordable for all in the long term. It is naïve and fanciful to assume that people will change their behaviour to the degree needed through anything but higher prices.

16. Politically, metering may be seen as difficult but recent research from the Fabian Society (Dec 2011) has shown that the public are prepared to support water metering measures, but only if the Government takes the lead and if the measures that are introduced are seen to affect everyone equally, or in a way that rewards those who avoid wasting water and penalises those whose use is excessive.

17. Further information is available from http://www.ciwem.org/policy-and-international/current-topics/water-management.aspx and the Fairness on Tap Making the Case for Metering document.

23 January 2012

Prepared 4th July 2012