Committee calls for government intervention to future-proof water supplies

A scathing parliamentary report has called for more stringent control from the regulators to steer the country away from serious water shortages within 20 years and accused the regulators of having “collectively taken their eye off the ball”.

Following a Public Accounts Committee (PAC) hearing last month, the report made recommendations for a national water efficiency campaign and to expedite mandatory water efficiency labels for household goods, something the sector widely supports.

The PAC spoke to representatives from the Department for Food, Environment and Rural Affairs (Defra), Ofwat and the Environment Agency at the end of May to discuss water supply and demand.

It criticised the government for being too slow to implement policies to support water efficiency and not intervening to resolve tensions over the level of infrastructure investment.

The committee said urgent action was required to ensure water supplies would be available for future generations and criticised the progress made across the sector to drive down leakage over the past 20 years. It found government efforts to encourage people to use less water were “weak” and “achieved very little”.

It said: “Water companies have at least now been given tougher targets to make improvements, but we are calling for the responsible bodies to go further and annually publish clear performance tables so that the government and the water companies can be properly held to account.”

The report also stated that there was a need for a coherent coordinated national message on water efficiency. It said industry efforts had been insufficient or ineffective so government needed to “substantially step up its efforts” to communicate with the public about the need to reduce water consumption.

The committee called on Defra to urgently develop an adequately funded plan to increase public awareness on this and publish league tables on water companies’ progress on per capita consumption (PCC). Defra said its response to last year’s consultation on reducing PCC will be published later this year.

Water labelling was mentioned in the Environment Bill, but not explicitly set out in the proposals. The PAC criticised the government for not making pledges on water efficiency, which it said: “demonstrates the lack of importance government has attached to this issue”.

It requested Defra to set out a timetable, following from it 2019 consultation into the matter, for when it expects to implement product labelling, changes to building regulations and other water efficiency actions.

Water UK on behalf of the sector said it wanted to help government embed water efficiency in the national psyche: “It is pleasing therefore that the committee has recognised the need for water efficiency measures, such as introducing labels on washing machines and dishwashers to show how much water they use, and smarter building regulations to cut water waste. These measures could have a huge impact and we will continue to work closely with government to help make them a reality.”

The PAC’s report explored how to balance the need for investment with keeping prices affordable, which has been at the heart of appeals against Ofwat’s final determinations for PR19.  It called developments to infrastructure improvements “far too ponderous” and recommended that Defra should give more guidance to water companies about the level of investment needed to ensure resilience and how to balance that with keeping bills affordable.

On leakages, the committee both the amounts lost and the lack of progress, suggesting Defra should publish league tables setting out companies’ performance against targets by the end of the year.

United Utilities said in response that tackling leakage had always been a top priority for and it welcomed the report.

“But we know there is more to do,” the company added. “This is a huge issue for the environment and our customers. That’s why we are investing in ground-breaking technology to tackle leaks, including tens of thousands of acoustic leak loggers and powerful leak detection computer systems, which have been developed by innovative tech businesses in the north west.”

The committee also found fault with the sector’s goals to decarbonise, stating that the committee was not convinced “achieving the net zero target is sufficiently embedded in the oversight and regulation of the water industry.” Its concerns included how carbon-intensive infrastructure projects and carbon footprints are taken into account by the sector and the EA.

It requested an update from Ofwat within three months explaining how companies are planning to meet the decarbonisation targets. A roadmap is currently being developed with Water UK setting out how net zero can be made a reality and is expected to be released this autumn.

The Committee on Climate Change last month published its annual update in which it recognised both the ambition and progress made by the sector to reach net zero ahead of UK targets.

In response to the report, Defra said it absolutely recognises the need to safeguard water supplies for future generations and has set out its bold vision in the National Framework for Water Resources, which was launched in March. A spokesperson said: “We are already taking a tougher approach to poor performance and wastage within the water industry, while also finding ways to increase supply.

“But everyone has a part to play, and we urge people to be mindful of their usage and look at practical ways to save this precious resource in their daily lives.”

The Environment Agency responded: “We know that if we don’t take action now many areas of England will face water shortages by 2050, which is why we are always striving to ensure water supplies are sustainable.”

Since 2008, the agency has made changes to more than 300 unsustainable abstraction licences to save 47 billion litres of water a year, which it said it is equivalent to supplying the cities of Bristol and Nottingham.

“We have also introduced the National Framework for Water Resources, setting out what is required to preserve our water supplies and protect the environment for future generations,” said a spokesperson.

Southern Water chief executive Ian McAulay called the committee findings “a significant moment in the national debate about water resources and a clarion call to action”.

McAulay said: “Climate change and population growth were described by Environment Agency chief executive Sir James Bevan as the ‘jaws of death’ – and it is our beautiful region where those jaws could close.”

The company has pioneered a campaign to reduce PCC to 100 litres per day and lobbied government on water labelling and efficiency as well as working with developers to include SUDS and water efficiency in housing schemes.

“It is especially welcome to see the issue of water-labelling highlighted by the Committee. Keeping people informed about how the choices they make will affect the environment and security of supply is clearly the right thing to do,” McAulay said.

Peter Simpson, chief executive of Anglian Water said: “As the water company serving the driest and one of the fastest growing parts of the UK we’re acutely aware of the challenges we face from future water deficit, and the importance of striking the right balance between investment to secure a more resilient future and low bills.

“If we delay investment, the east of England will face a shortfall of 30 million litres of water a day in the next 10 years. That’s why we’re investing now in building resilient, strategic pipelines to move water across the region, installing more than 750,000 upgraded water meters to help customers better understand their water use, and continuing to far exceed our leakage targets.

“All these are things our customers explicitly told us they wanted us to invest in now, rather than wait.”

Tom Kelly, wholesale director at SES Water responded: “At SES Water we continue to make significant progress in both lowering demand and leakage – we have met our leakage reduction target for the last 21 years but we have ambitious plans to go further, using cutting-edge innovation with expert technology providers as part of creating our intelligent network.

“However, the water sector’s plans to reduce customer consumption will only deliver part of the journey to sustainable use of this vital commodity,” Kelly said and added that government together with water companies and technology providers could move water efficiency to the next level. “Through the introduction of compulsory water labelling on white goods and water fittings, building regulations that require water re-use on new properties and mandating water retailers provide water efficiency services to all their customers, the government has multiple roles to play.”

A spokesperson at Yorkshire Water said the report makes a compelling case for more long-term investment in leakage reduction to secure water resources for the future.

They said: “Our customers were supportive of our ambitious plans to cut leakage – but unfortunately these were scaled back by Ofwat. Despite that, we are committed to a 15 per cent reduction over the next five years and have invested in a range of new tech, which we are piloting in order to deliver that promise and more.”