Environment, Food and Rural Affairs CommitteeFurther written evidence submitted by Water UK

Defra’s Natural Environment White Paper “The Natural Choice” provides an innovative framework which will help to begin the process of placing a value on the many public goods—good water quality among them—that our environment provides.

The water industry has been at the forefront of developing partnerships with farmers and conservation groups to help provide water quality benefits for both customers and the environment. We are pleased that this work is recognised by the White Paper, and that it was mentioned specifically by the Secretary of State in her speech at the launch of the document in June.

The industry looks forward to working with government, regulators and other partners on the proposals set out in the Natural Environment White Paper. Water UK—which represents all UK water and wastewater service suppliers at national and European level—is pleased to give evidence to the Efra Select Committee.

1. What actions are required across Government Departments, from local government and by civil society to deliver the White Paper’s proposals to grow a green economy and reconnect people with nature?

Ofwat has been supportive of sustainable catchment management projects where companies made the case for them in the 2009 Price Review (PR09). Companies are undertaking projects and investigations at present and will be making the case for additional ones to regulators and Ofwat for PR14. Given customer support and proof of cost benefit, the industry is working towards a framework for robust assessment of catchment management with Defra, Ofwat and the Environment Agency.

2. Will the institutional framework outlined for delivering the proposals (in particular Nature Improvement Areas and Local Nature Partnerships) be effective? Does the proposed Natural Capital Committee have sufficient powers?

The Committee may like to consider the impact NIA will have, given that it, and other proposals, involve rationing very limited funds. We understand that the NIA process is expecting 200 bids for just 12 awards. So there is only a 6% success rate, for a £600K award over three years. Some companies are participating. Others are supporting but not leading a NIA proposal, as they prefer to focus effort on direct delivery of larger and more accessible funding.

3. What further research and/or evidence is required to develop practical programmes sufficiently detailed to deliver the White Paper’s ambition to fully embed the value of nature into policy delivery?

No further evidence or research is needed before embarking on catchment management programmes—although we are putting good levels of effort into measuring the benefits of the changes—and there are many, particularly for biodiversity, carbon and other aspects in the Natural Environment White Paper (NEWP).

4. What evidence is there from other countries that the approaches proposed in the White Paper can be successfully applied in practice?

There are many international examples of successful catchment management known to most practitioners and since before 2000, three successful projects in the South West of England have been independently appraised for their extensive benefits and provision of a wide range of valuable ecosystem services. We can provide these details on request.

5. What resources will be needed to fully deliver the White Paper’s ambitions and how can these best be provided? How might the value of “services” provided by ecosystems to beneficiaries be translated into spending that will enhance the natural environment?

Resources can be provided in the context of water industry action to maintain affordable and sufficient water supplies, particularly in response to any current over-abstraction evidence or for future global warming effects. Current capitalisation of the projects allows, in the case of one water company, for a 5p addition to customers bills to generate £1 million for catchment restoration. Overheads are minimal and far less than the overheads associated with any funds raised through UK or EU taxation. Valuation of individual ecosystem services is at present in the UK very theoretical. We prefer to focus on water provision (quality, peak control in storms and flow maintenance in droughts) as the primary and most easily valued ecosystem service; other such as biodiversity, landscape value, sustainable food production, tourism and recreation, carbon capture and storage etc can all be associated with the water protection actions. This avoids the problems and impracticality of identifying beneficiaries, providers and establishing a fair market mechanism for each ecosystem services.

6. Does the White Paper set out an accurate assessment of the barriers to public engagement with the natural environment and make the most effective proposals for re-engagement?

We are pleased the Government has recognised the water industry as one of the sectors at the forefront of providing ecosystem services, and developing innovative solutions, working with the natural environment, to provide tangible customer and public benefits—for example, increased water quality, greater flood resilience, and reduced sedimentation of reservoirs. The White Paper went some way to recognising the extent of the industry’s ability to deliver most of the NEWP aims. We believe the efficiency and value of delivery of NEWP, through direct water industry action which is either underway or planned, has been clearly demonstrated. We also recognise that, in landscape of reduced resources, the agencies with responsibility for the wider environment and its protection or improvement will need to seek partnerships across sectors, to undertake what the NEWP seeks to achieve.

27 September 2011

Prepared 16th July 2012