Resilience in the water sector: 10 recommendations

The resilience taskforce, created by Ofwat, has published its recommendations for water resilience and Ofwat has responded.

Resilience is a priority issue for the water and wastewater sector. So, to help it improve coordination of the plans which will ensure such resilience, Ofwat created an arms-length body comprised of 12 water experts and chaired by Waterwise managing director Jacob Tompkins.

This task and finish group worked for a year producing a series of short reports before producing a final report outlining 10 recommendations for the sector designed to help meet the challenges, which will feed into the regulator’s thinking for the PR19 policy framework.

Now, the group tells Ofwat better co-ordination is needed both within the sector and with other sectors and the wider public.

1) Agree a shared definition of resilience for the sector

One of the first activities of the taskforce was to develop a definition of resilience for the water sector. Members decided upon the following:

Resilience is the ability to cope with, and recover from, disruption, and anticipate trends and variability in order to maintain services for people and protect the natural environment now and in the future.

Ofwat’s response: “We consider the definition adopted by the task and finish group – now slightly amended – is a helpful starting point, although the wording of our resilience duty remains paramount for our work.”

2) Increase public engagement and education

The group suggests that public engagement should be twofold – it should involve the provision of pertinent information on a wide scale on an ongoing basis, and it should aim to ensure this information is transformed into active engagement.

Ofwat’s response: “Ultimately, we propose to link the quality of a service provider’s customer engagement directly to our assessment of business plan quality in the risk-based review.”

3) Ensure clear routes for funding legitimate resilience measures

The taskforce recommends that Ofwat provide water companies with a clear framework for water companies’ business plans, as well as offering clear guidance on its treatment of resilience investments when it considers these plans.

Additionally, water companies need to do more in-depth engagement and deliberative work with all their customers to build and maintain a real understanding.

Ofwat’s response: “We want to be clear that we see service providers’ work to deliver resilience extending beyond what would traditionally have been considered ‘investment’ – that is, capital expenditure – and into all areas of their activity.”

4) Ensure coherent planning for resilience at both a national and regional level

A newly-formed project group, under the auspices of Water UK, is considering the long-term planning needs of the England and Wales water sector. The project will aim to strengthen the overall resilience of water resources for all users, and to protect the environment, and strengthen future resource planning guidelines, allowing a more integrated approach to water resource and drought planning.

Ofwat’s response: “We are involved with, and supportive of, the work led by Water UK on the long-term resource planning needs for England and Wales, for up to 50 years, and the practical steps required to meet them.”

5) Establish wastewater, sewerage and drainage plans

The group argues that there must be national wastewater and sewerage strategies, and each company should have a wastewater and sewerage plan which should link to SuDS, wider drainage issues and rainwater and greywater harvesting through the parallel development of drainage plans. Potentially these plans should be statutory, and there may be scope under the existing statutes.

Ofwat’s response: “Wastewater services are not subject to a statutory planning framework, but we support the recommendation that service providers should have long-term wastewater, sewerage and drainage strategies in place for PR19.”

6) Improve understanding of risk and failure

An agreement must be reached on the level of service which should be planned for in each area, based on better understanding and communication of the risks faced by the water sector, the costs of failure, and the costs and benefits of measures to avert, manage and recover from failure.

Ofwat’s response: “We agree that managing risk is at the heart of delivering resilience of systems and services.”

7) Ensure services are resilient under different water sector structures

The group asks three key questions when it comes to delivering resilience: who within each structure is responsible for resilience planning; is there structural capacity to deliver this; and will the regulatory regime enable resilience?

Ofwat’s approach and assessment of impacts needs to enable and incentivise resilience in a fragmented and evolving sector.

Ofwat’s response: “This recommendation raises questions about our capacity to regulate a fragmented and evolving sector where not all the stakeholders are within the regulatory, licensed, framework. We recognise these are important questions and commit to building this into our thinking.”

8) Develop benchmarking, standards and metrics

Ofwat and water companies need to work together to develop a method of comparing resilience, reflecting customer views, local context, the environment and company ownership of plans, the taskforce says.

Ofwat’s response: “We agree that water companies should develop better measures of resilience as we look to PR19 and beyond and that we need to consider how we take these into account in our assessment of business plans, building on current approaches. We will consider the use of measures as part of our work on outcomes and customer engagement.”

9) Ensure existing plans are stress-tested

All companies need to have a process in place, including board assurance, to review and stress-test plans as widely as possible.

Ofwat’s response: “It is for companies to consider such a framework and build this into their approach to meeting their resilience obligations.”

10) Establish a water and wastewater resilience action group

The group could be hosted by a recognised sector body such as Water UK and should include water companies, governments, local government, regulators, customer groups, community groups and social and environmental NGOs, and should be independently chaired.

Ofwat’s response: “We look forward to working with all water stakeholders in this area.”