Water Bill

Written evidence submitted by the NFU (WB 08)

The NFU represents the farming and rural interests of 55,000 members in England and Wales.

Farmers and growers rely on a consistent supply of wholesome water for a range of uses across a number of very different sectors, including crop irrigation, livestock drinking, dairy unit hygiene and salad crop washing. Their businesses would not survive without water and so their interest in water resources is intense regardless of the source, be it directly abstracted or mains supply.

1. Overview

1.1. The Water Bill is primarily concerned with enabling greater competition in the public supply sector, yet it still contains small but significant issues of interest to farmers and growers. For example, many farms (and manufacturing and processing businesses who rely on farms to produce our food) are dependent on a secure supply of affordable, wholesome mains water. Those businesses will undoubtedly be interested in benefits that may result from changes in retail competition proposed by the Bill.

1.2. Over the past 20 years, many farmers have improved their long term resilience to water scarcity by constructing their own on-farm reservoir storage facilities. The Bill contains provisions to enable farmers (and others) to sell surplus water capacity in those reservoirs. This is a logical step – but we are not yet clear about the barriers that government seeks to remove through this measure.

1.3. Government views the Bill as just one element of its wider programme to address water pressures. The NFU believes that this Bill must be underpinned by government policies that recognise and promote the link between water and food security. Above all, we look to government to deliver a fair share of water to farmers to grow our food.

2. Flood insurance

2.1 Whilst the proposed approach aims to secure affordable flood insurance for domestic properties in higher flood risk areas, it does not cover business insurance. Insurance to cover flood risks to growing crops will remain prohibitively expensive.

2.2 Farmers will therefore seek to reduce the risk from flooding on their land either by undertaking works and maintenance themselves or through authorities such as Internal Drainage Boards (to which they pay drainage rates), local authorities or the Environment Agency. Government investment in routine maintenance of ‘main rivers’ is inadequate and will inevitably increase the extent, frequency and duration of flooding in some rural areas and across agricultural land.

2.3 We are concerned that farmhouses may be excluded from the ‘Flood Re’ proposals. A farmhouse is primarily a residential property and thus in our view should be included in the provisions – even in cases where the farmhouse acts as a business address for the farm. Care should be taken to ensure that multi-use residences are included within the scheme.

2.4 Furthermore, the use of evidence, data and flood mapping on which premiums are based should be reconsidered. At present it is not always clear to policyholders which flood maps have been used by the insurance provider; and they lack information about the data used and presumptions on which such maps have been developed. Some flood maps and models may not include all local flood defence structures (e.g. those operated by IDBs) which can lead to an over-estimation of a property’s flood risk. Use of different maps makes it difficult for those seeking insurance to understand whether the premium being charged is proportionate to the true level of flood risk. In our view a common flood mapping system should be used by insurers and the Environment Agency to underpin Flood Re.

2.5 Finally, it is important that the Flood Re scheme is transparent. Insurers should be required to inform policyholders that their insurance is covered within the Flood Re system and that they have therefore been deemed to be at high flood risk.

3 Environmental permitting framework

3.1 We have yet to be convinced of the benefits of the extension of this regime to abstraction licensing and flood defence consents for agriculture. The proposals clearly benefit the regulator and some industry sectors where businesses are subject to a range of permits and consenting regimes. But we do not think that the expected reduction in administrative costs will translate to the farming sector.

3.2 For example, abstraction licences tend to be bespoke authorisations based on site-specific details of hydrogeology and proposed water use, with the determination of applications based on the evaluation of local evidence. It is hard to see how a ‘risk based approach’ allowing derogations from the licensing process could be introduced to reduce the administrative burden on applicants; nor how the decision-making process could be streamlined to reduce business costs.

3.3 New authorisations promised by long-term reform of the abstraction licensing regime will – if and when introduced – cause a major upheaval to the 13,000 existing licences used in the farming sector. Most or all of those existing authorisations will need to be revised and re-issued, often on inferior terms. We are troubled by government plans to rely on ‘enabling powers’ in the Bill that will inevitably mean less scrutiny when the regulations are finally introduced.

3.4 For flood defence consents it would be beneficial to streamline the existing regime to manage commonly requested flood risk and land drainage management activities that currently require consent when conducted on ‘main rivers’ (e.g. de-silting works). Applying a risk-based regulatory approach to such commonly undertaken activities similar to the approach used in Scotland [1] would be beneficial. This approach would enable farmers themselves to undertake low risk works (while following a set of basic rules to guard against environmental damage) whilst higher risk activities would still require consent. Where consents are needed, these should be issued for multiple years and across the area of a whole farm business, where applicable. There is also merit in exploring the use of catchment licences. However, there is not yet a clear case that such regulatory reforms need to occur within the EP framework.

3.5 In summary, the case for change towards an EP framework has not been made and we are concerned that the proposals may result in disadvantages to farmers. We seek evidence that the complex application and approval regime for abstraction could be accommodated by a permitting regime without any unintended consequences. We are concerned that the transition to environmental permitting could result in increased in costs for farmers, particularly for permit applications and annual fees.

4 Internal Drainage Boards

4.1 Measures to reduce the bureaucracy relating to the governance of Internal Drainage boards (IDBs) seem to be sensible. We support the streamlining of the processes for making structural reforms to IDBs and reducing red tape governing the advertising of such structural reforms.

5 Abstraction reform

5.1 Abstraction reform proposals are at an embryonic stage and we agree that no provision for them should be made in the current Water Bill. Reform must proceed at a measured pace to allow farm businesses sufficient time to adjust and invest in water security and efficiency.

6 Funding arrangements for new flood defence schemes

6.1 In order for properly informed decisions to be made at a local and national level, we believe that food producing capacity (food security) should be considered as an outcome measure in the Environment Agency’s Flood and Coastal Erosion Risk Management Strategy. This would help avoid the very real risk of an ‘unintended consequence’ which exists at the present time; where we risk the loss of an unacceptable amount of highly productive (Grades 1, 2 and 3a) agricultural land.

7 Inspection of on-farm reservoirs

7.1 The Flood and Water Management Act 2010 introduced an amendment that may introduce a reduction in the statutory threshold at which reservoirs are subject to the Reservoir Act 1975 provisions. We question the appropriateness, relevance and cost-benefit of the proposed introduction of this lower capacity threshold when policies and regulations relevant to the building of on-farm reservoirs (such as the planning regime) already exist.

7.2 We believe that the Water Bill should include a clause that introduces a screening process to recognise that reservoirs of any size can present a low risk to life and property. The regulatory cost of maintaining an unnecessary register of ‘large reservoirs’ would be reduced or avoided. Instead, limited resources could focus on those reservoirs - both large and small - which do pose a risk to the public.

December 2013

Prepared 5th December 2013