(3) After subsection (4) there is inserted—
“(4A) No compensation shall be payable under this section in respect of the
variation of a full licence, or of a transfer licence which specifies a
minimum value under section 46(2A) above, so as to reduce the
quantity of water which the holder of the licence is authorised by the
licence to abstract from the source of supply to which the licence relates
(a) the ground for varying the licence is that the Secretary of State
is satisfied that the variation is necessary in order to protect the
availability of water in the source of supply to which the licence
(b) the variation does not reduce the quantity of water which the
holder of the licence is authorised by the licence to abstract to
less than the minimum value specified in the licence under
section 46(2A) above for the purposes of this subsection; and
(c) the conditions set out in subsection (4B) below are satisfied.
(4B) Those conditions are that—
(a) the licence was granted after the coming into force of section 21
of the Water Act 2003;
(b) the variation is made no sooner than the end of the period of six
years beginning with the date on which the licence took effect;
(c) the variation takes effect no sooner than the end of the period of
six years beginning with the date of the variation.”
(4) The amendment made by subsection (2) has effect in relation to the revocation
or variation of a licence only if the period referred to in section 61(4) of the
WRA during which no water was abstracted in pursuance of the licence began
after the coming into force of that subsection.
28 Recovery of compensation from new licence-holder
After section 61 of the WRA there is inserted—
“61A Recovery of compensation from new licence-holder
(1) This section applies where compensation has been paid under section
61 above to the holder of a licence (“licence A”) following its revocation,
(a) the holder of licence A was a water undertaker;
(b) at the time of the revocation an application from a qualifying
person for a licence to abstract water (“licence B”) was
(c) if the Agency had granted licence B while licence A still had
effect, the Agency would have been in breach of the duty
imposed on it by section 39(1) above owed to the holder of
(d) the ground for revoking licence A was that the Agency was of
the view that in the interests of greater efficiency in the use of
water resources it would be better for licence B to be granted
and licence A revoked; and
(e) the Agency proposes to grant licence B.
(2) If this section applies, the Agency may (if licence B is granted) recover
from the qualifying person the amount of the compensation referred to
in subsection (1) above (or such lesser amount as the Agency
(3) Subsection (6) of section 41 of the 1995 Act (which confers powers to
make schemes imposing charges) shall apply to the amount referred to
in subsection (2) above as if it were a charge due and payable to the
Agency in respect of the subsistence of licence B.
(4) In this section, “qualifying person” means—
(a) a water undertaker; or
(b) a person who has made an application for an appointment or
variation replacing a company as a water undertaker under
section 8 of the Water Industry Act 1991 which has not been
29 Withdrawal of compensation for certain revocations and variations
(1) This section applies where—
(a) a licence to abstract water is revoked or varied on or after 15th July 2012
in pursuance of a direction under section 54 or 56 of the WRA;
(b) the licence was granted before the coming into force of section 21 of this
(c) the licence is one which is expressed to remain in force until revoked;
(d) the ground for revoking or varying the licence is that the Secretary of
State is satisfied that the revocation or variation is necessary in order to
protect any waters or underground strata, or any flora and fauna
dependent on them, from serious damage.
(2) Where this section applies, no compensation is payable under section 61 of the
WRA in respect of the revocation or variation of the licence.
Water resources management schemes
30 Water resources management schemes: other abstractors
After section 20 of the WRA there is inserted—
“20A Water resources management schemes: other abstractors
(1) The Agency may enter into and maintain such arrangements with
holders of abstraction licences other than water undertakers for
securing the proper management or operation of—
(a) the waters from which they have the right by virtue of their
licences to abstract water; and
(b) any reservoirs, apparatus or other works which are used for the
purposes of or in connection with their abstractions and which
belong to them, are operated by them or are otherwise under
as the Agency from time to time considers appropriate for the purpose
of carrying out its functions under section 6(2) of the 1995 Act.
(2) Without prejudice to the power of the Agency and any holder of an
abstraction licence to include any such provision as may be agreed
between them in arrangements under this section, such arrangements
(a) make provision by virtue of subsection (1)(a) above with respect
to the construction or installation of any reservoirs, apparatus
or other works which the holder of the licence will use for the
purposes of or in connection with his abstraction;
(b) contain provision requiring payments to be made by the
Agency to the holder of the licence; and
(c) require the reference to and determination by the Secretary of
State or the Water Services Regulation Authority of questions
arising under the arrangements.
(3) The Agency shall send a copy of any arrangements entered into by it
under this section to the Secretary of State.
(4) In this section, references to abstraction licences are to licences under
Chapter 2 of this Part to abstract water.”
31 Water resources management schemes: referral to Secretary of State
(1) After section 20A of the WRA (inserted by section 30) there is inserted—
“20B Water resources management schemes: referral to Secretary of State
(1) This section applies where—
(a) the Agency has sought to enter into arrangements acceptable to
it under section 20 or 20A above, but is satisfied that the other
party is unwilling to enter into such arrangements or to do so on
terms appearing to the Agency to be reasonable; or
(b) having entered into such arrangements, the Agency has sought
to renew or vary them but is satisfied that the other party is
unwilling to do so or to do so on terms appearing to the Agency
to be reasonable.
(2) Where this section applies, the Agency may refer to the Secretary of
State the question (as the case may be)—
(a) whether such arrangements should be entered into, and if so, on
what terms; or
(b) whether the arrangements should be renewed or varied (as the
case may be) and if so, on what terms.
(3) If the Secretary of State determines that arrangements should be
entered into or (as the case may be) renewed or varied, such
arrangements on the terms determined by the Secretary of State shall be
(a) by civil proceedings by the Secretary of State for an injunction
or for any other appropriate relief; and
(b) where the other party is a water undertaker, also under section
18 of the Water Industry Act 1991 (enforcement orders) by the
Secretary of State.
(4) The functions of the Secretary of State under subsection (2) above shall
be treated for the purposes of section 114 of the 1995 Act (delegation or
reference of appeals) as if they were functions to which paragraph (a)
of subsection (1) of that section applied.”
32 Enforcement notices, and related procedures and offences
After section 25 of the WRA there is inserted—
“25A Enforcement notices
(1) Subject to the following provisions of this section, where it appears to
the Agency that a person is—
(a) in breach of section 24(1) or (2) or section 25(1) above; or
(b) for the purposes of section 24 or 25 above a holder of a licence
under this Chapter and has not complied with a condition or
requirement imposed by the provisions, as for the time being in
force, of that licence,
the Agency shall be entitled to serve an enforcement notice on him if the
condition in subsection (2) below is satisfied.
(2) The condition is that it appears to the Agency that the breach or failure
to comply is causing or is likely to cause significant damage to the
(3) An enforcement notice is a notice requiring the person on whom it is
(a) to cease his breach of section 24(1) or (2) or section 25(1) above,
or to comply with the condition or requirement in question; and
(b) to carry out any works or operations specified in the notice.
(4) The works or operations which may be specified are works or
operations which it appears to the Agency are appropriate for the
purpose of remedying or mitigating the effects of the breach or failure
to comply, and may include—
(a) works or operations for the purpose, so far as it is reasonably
practicable to do so, of restoring any affected waters, including
any flora and fauna dependent on them, to their state
immediately before the breach or failure to comply; and
(b) in the case of a breach of section 25(1) above, the removal of any
unauthorised impounding works or the reversal of any
unauthorised alteration to impounding works.
(5) An enforcement notice must specify the periods within which the
person on whom it is served must do each of the things specified in the
(6) Before serving an enforcement notice on any person, the Agency shall
take reasonable steps to consult that person about the works or
operations which are to be specified in the notice.
(7) The Secretary of State may by regulations make provision for or in
(a) the form or content of enforcement notices;
(b) requirements for consultation, before the service of an
enforcement notice, with persons other than the person upon
whom the notice is to be served;
(c) steps to be taken for the purposes of any consultation required
under subsection (6) above or regulations made by virtue of
paragraph (b) above;
(d) any other steps of a procedural nature which are to be taken in
connection with, or in consequence of, the service of an
(8) An enforcement notice is not invalid, or invalidly served, merely
because of a failure to comply with subsection (6) above or with
regulations made by virtue of subsection (7)(b) above.
(9) The Secretary of State may, if he thinks fit in relation to any person, give
directions to the Agency as to whether or how it should exercise its
powers under this section.
(10) In proceedings for any offence under section 24 or 25 above against a
person upon whom an enforcement notice has been served, the
following are not to be taken as evidence that he has committed the
(a) the fact that an enforcement notice has been served on him;
(b) the fact that he does not appeal against it;
(c) the fact that on an appeal against it the notice is confirmed
(whether with or without modifications).
25B Rights of entry and appeals
Sections 161B and 161C below (including any power to make
regulations) shall apply in relation to enforcement notices as they apply
in relation to works notices under section 161A below.
25C Consequences of not complying with an enforcement notice
(1) If a person on whom the Agency serves an enforcement notice fails to
comply with any of its requirements, he shall be guilty of an offence.
(2) A person who commits an offence under subsection (1) above shall be
(a) on summary conviction, to a fine not exceeding £20,000;
(b) on conviction on indictment, to a fine.
(3) If a person on whom an enforcement notice has been served fails to
comply with any of its requirements, the Agency may do what that
person was required to do and may recover from him any costs or
expenses reasonably incurred by the Agency in doing it.
(4) If the Agency is of the opinion that proceedings for an offence under
subsection (1) above would afford an ineffectual remedy against a
person who has failed to comply with the requirements of an
enforcement notice, the Agency may take proceedings in the High
Court for the purpose of securing compliance with the notice.”
33 Appeals against enforcement orders
(1) Section 21 of the WIA (validity of enforcement orders) is amended as follows.
(2) At the end of paragraph (a) of subsection (1), there is omitted the word “or”.
(3) After paragraph (b) of subsection (1), there is added—
“(c) that the making or confirmation of the order was based on an
error of law or fact; or
(d) that in the circumstances of the case, the making or
confirmation of the order was not reasonable.”
(4) For subsection (2) there is substituted—
“(2) On any such application, the High Court may, if satisfied that any of the
grounds set out in subsection (1) above are proved—
(a) quash the order or any provision of the order; or
(b) vary the whole of the order, or any part of the order whether the
application relates to that part of the order or not.”
34 Bulk supplies
(1) After section 20B of the WRA (inserted by section 31 of this Act) there is
“20C Proposals for bulk supply arrangements
(1) In the circumstances mentioned in subsection (2) below, the Agency
may, in carrying out its functions under section 6(2) of the 1995 Act,
propose to a qualifying person (within the meaning of section 40 of the
Water Industry Act 1991) that he make an application under that
section for a bulk supply of water from a water undertaker.
(2) The circumstances referred to in subsection (1) above are that it appears
to the Agency that such a bulk supply is necessary in order to secure the
proper use of water resources.
(3) The Agency shall not make such a proposal without first consulting the
Water Services Regulation Authority.
(4) The Agency may include in its proposal the period for which, and
terms and conditions on which, the Agency considers it appropriate
that the bulk supply should be given.”
(2) In section 38 of the WRA (general consideration of applications), in subsection
(3), after paragraph (b) there is inserted—
“and may have regard to any failure on the part of the applicant to
make an application under section 40 of the Water Industry Act 1991
pursuant to a proposal made by the Agency under section 20C above.”.
35 Visiting forces
Section 223 of the WRA (exemption of visiting forces from restrictions on
abstraction etc) shall cease to have effect.
New regulatory arrangements, etc
Establishment, etc of new bodies
36 Water Services Regulation Authority
(1) After section 1 of the Water Industry Act 1991 (c. 56) (in this Act referred to as
the “WIA”) there is inserted—
“1A Water Services Regulation Authority
(1) There shall be a body corporate to be known as the Water Services
Regulation Authority (in this Act referred to as “the Authority”) for the
purpose of carrying out the functions conferred on or transferred to it
by this Act or under or by virtue of any other enactment.
(2) The functions of the Authority are performed on behalf of the Crown.
(3) Schedule 1A to this Act shall have effect with respect to the Authority.
(4) In Welsh the Authority may be known as “Awdurdod Rheoleiddio
(2) Schedule 1 (which inserts the new Schedule 1A into the WIA) is to have effect.
(3) The office of Director General of Water Services is abolished.
(4) Section 1 of, and Schedule 1 to, the WIA (which make provision in relation to
the Director General of Water Services) shall cease to have effect.
37 Consumer Council for Water
(1) After section 27 of the WIA there is inserted—
“The Consumer Council for Water
27A Establishment of the Council and committees
(1) There shall be a body corporate to be known as the Consumer Council
for Water (in this Act referred to as “the Council”) for the purpose of
carrying out the functions of the Council under this Act.
(2) In Welsh the Council may be known as “Cyngor Defnyddwyr Dˆwr”.
(3) The Council shall not be regarded as a servant or agent of the Crown or
as enjoying any status, immunity or privilege of the Crown.
(4) The Council shall establish such committees of the Council—
(a) as the Assembly may direct, for relevant undertakers whose
areas are wholly or mainly in Wales; and
(b) as the Secretary of State may direct, for other relevant
(5) A direction under subsection (4) above may provide for the allocation
of each relevant undertaker to a committee specified in the direction.