Draft Water Bill - Environment, Food and Rural Affairs Committee Contents

5  The Wider Policy Agenda

58.  Where we believe that important matters have been omitted from the Draft Bill we have made specific recommendations. We do not, however, disagree in principle with the Minister's assertion that much can be achieved without legislation. Coming just a few months after our inquiry into the Water White Paper, we have taken the opportunity during pre-legislative scrutiny to return to some of the wider policy issues that we considered in our previous report and to consider whether they are being taken forward with sufficient urgency. We have taken a particular interest in those provisions of the Flood and Water Management Act 2010 (FWMA) which remain outstanding.

Sustainable Drainage and Reservoirs Guidance

59.  The key provisions of the FWMA on Sustainable Drainage Systems, or SuDS remain unimplemented, including: removing the right to lay impermeable surfaces as of right on back gardens and business premises; removing the automatic right to connect surface water drainage of new developments to the sewerage system; and resolving the ownership and maintenance of SuDs. In our report on the White Paper we criticised the lack of urgency in Defra's work to improve the management of surface water and we urged the Department to ensure that implementation of the FWMA's provisions was not subject to any further unnecessary delay.[103] During the course of our pre-legislative scrutiny, parts of England and Wales were once again hit by flooding, with surface water a major contributory factor to the damage caused to homes and businesses. In their evidence to this inquiry, Severn Trent argued that pushing ahead with the implementation of these provisions should be a priority.[104]

60.  We were therefore dismayed to discover during the course of the oral evidence session with the Minister that implementation of the SuDS regulations had been put back once again, and was now not expected until April 2014.[105] The Minister defended this additional further delay, telling us that "we simply could not take this forward in a meaningful way any quicker",[106] and that "we found that the provisions in the Act are not easy to take forward. They were for a new Government to take forward, and we have done that in a way that has really tested the resources of both our Department and others who would have to implement this".[107]

61.  We are greatly concerned by the further postponement of the implementation of the Flood and Water Management Act's provisions on Sustainable Drainage Systems to April 2014. We expect the Department, in its response to this report, to set out which particular elements of the regulations have caused such difficulty to implement and to explain the steps it is taking to address those issues so that the regulations can come into force at the earliest possible opportunity.

62.  The FWMA contained provisions to give effect to Sir Michael Pitt's recommendations relating to reservoir safety, including amendments to the Reservoirs Act 1975. Defra consulted on the implementation of these provisions in 2012 and has commissioned the Institution of Civil Engineers to review two key guidance documents: A guide to the Reservoirs Act 1975 and Floods and Reservoirs Safety Guidance, 3rd edition. The Environment Agency is also producing a new risk-based methodology for the classification of high-risk reservoirs. We have previously pressed the Department to work with the Institution of Civil Engineers to complete the reviews of guidance documents by December 2012; that date has now passed but the Minister told us that Defra intended to publish the Guide to the Reservoirs Act in 2013 and that the revised Floods and Safety Reservoirs Guidance, commissioned in August 2011, was working to a target timescale of two years.

63.  We urge Defra to ensure that the revised Guide to the Reservoirs Act 1975 is published no later than April 2013. We are disappointed by the two-year target timescale for the review of Floods and Reservoirs Safety Guidance and recommend that Defra work with the Institution of Civil Engineers to bring publication forward to April 2013.

Bad Debt

64.  The FWMA contained provisions to tackle the problem of bad debt in the industry, which has been estimated to add approximately £15 to each customer's bill.[108] These provisions, which would place a responsibility on landlords to provide details of their tenants for billing purposes, have not been implemented, and the Government has subsequently consulted on an alternative, voluntary approach to obtaining this information. During the course of our inquiry into the Water White Paper, we heard evidence from both water companies and consumer representatives which criticised the Government's failure to implement the bad debt provisions and questioned the likely effectiveness of a voluntary approach. We recommended that the Government implement the relevant provisions without further delay, noting the injustice of increasing bills for hard-pressed customers to subsidise those who simply refused to pay.[109]

65.  Again, we were disappointed to find that little or no progress had been made since our report was published. In oral evidence the Minister reiterated his concern that regulation could place a disproportionate burden on landlords;[110] Water UK argued that "It really is a very small administrative burden for something which would avoid customers, who are facing difficulty paying their bills, paying more because of bad debt".[111] We remain of the view that it is unacceptable for honest customers to be forced to subsidise those who refuse to pay their water bills. We reiterate our previous recommendation that Defra should implement the provisions of the Flood and Water Management Act 2010 on bad debt without further delay.

Flood Insurance

66.  Another area in which there has been a notable and deeply worrying lack of progress since our last report is on the issue of flood insurance. The current Statement of Principles agreed between the Association of British Insurers (ABI) and the Government is due to expire at the end of June 2013 and, although discussions have been ongoing throughout the course of our pre-legislative scrutiny, no agreement has yet been reached on the provision of insurance cover for at-risk homes and businesses beyond this date. The Draft Bill does not include any specific clauses relating to flood insurance, but the introductory section on "Taking the Draft Bill forward" notes that "the UK and Welsh Governments may also need to consider legislation to help manage the financial risk of flooding".[112]

67.  The Minister was reluctant to discuss the progress of negotiations in any detail when he appeared before us, but said that the Department was "working really hard to achieve" affordable and freely available cover.[113] On the specific issue of whether legislation would be needed, officials told us that "The structure that might emerge is not clear, but if it involved either financial or regulatory structures or a combination that would probably require further legislation".[114] In addition, the Government has not yet fully implemented 'insurance with rent schemes' that were recommended in the Pitt Review. We will explore these issues with the insurance industry when we take evidence from them shortly.

68.  Whilst we understand the Minister's reluctance to provide a running commentary on negotiations with the Association for British Insurers and the possible solutions that are being considered, we are conscious that the current Statement of Principles will expire in less than six months, well before Royal Assent to a Water Act can reasonably be expected. We therefore wish to establish more details of the legislative solution(s) that are being considered should it prove necessary to go down that route; and in particular what consideration has been given to the basis on which flood insurance would be provided during the period between the expiry of the Statement of Principles and Royal Assent to a Water Act. We expect the Department to provide these details in its response to this report.

Water efficiency

69.  We face a future in which water resources are likely to come under increasing pressure. It is therefore ever more important to encourage the efficient use of water. There are a number of steps that householders can take to reduce their water use, for example, through rainwater harvesting. The UK Rainwater Harvesting Association argued that water companies should "be encouraged to work in closer partnership with the rainwater harvesting industry in addressing the future sustainability of water supplies".[115] We endorse this call.

70.  One key tool that has been shown to reduce demand for water is the more widespread use of metering. We have previously expressed our disappointment that the Water White Paper did not take a more ambitious approach to metering.[116] Some of the evidence we received in connection with this inquiry argued that the Draft Bill was also a missed opportunity to increase metering levels. Environmental groups argued that the Draft Bill should have taken steps to remove existing barriers to metering, whilst Wessex Water felt that metering should be the default position on change of occupancy, pointing out the benefits of using this opportunity to introduce a meter:

Households have been shown to be willing to accept metering at the point of moving into a property. Households tend to incorporate their new water charges as one part of much wider changes to their budget. And as most water use behaviour is driven by habit the new house gives them a good opportunity to change those habits and become more water efficient.[117]

71.  We remain disappointed that the Government has not acted on our recommendation that it set a clear and ambitious target to increase levels of metering. We believe that more should be done to educate the public about the value of water and to increase take up levels of metering. We recommend that Defra work with water companies to explore methods to encourage the installation of water meters upon change of occupancy, including through providing financial incentives.

103   HC (2012-13) 374, p13 Back

104   Ev 93 Back

105   Q 349 Back

106   Q 357 Back

107   Q 359 Back

108   Water for Life, p66 Back

109   HC (2012-13) 374, p20 Back

110   Q 349 Back

111   Q 2 Back

112   Draft Water Bill, p15  Back

113   Q 361 Back

114   Q 364 Back

115   Ev w50 Back

116   HC (2012-13) 374, para 41 Back

117   Ev 99 Back

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Prepared 1 February 2013