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The new chair of the Environment Agency (EA), Alan Lovell, has stated that the failure to build new reservoirs over the last 30 years has left the country “exposed” to water supply challenges.
Speaking to a House of Lords select committee for its inquiry into the work of Ofwat, Lovell said significant capital investment will be needed to address England’s forecast water deficit of more than four megalitres per day by 2050.
He said intercompany water transfers should make up part of the solution, but added: “It feels to me surprising that we will go from 1991 to at least 2029 without a major reservoir being built in this country – and I think that is leaving us exposed. The next price review will be critical to enable some investment by the water companies to take a step in this direction.”
He said the regulators should work closely to strike a balance between essential investment and avoiding burdening customers with high bills at PR24 and future investment cycles.
Lovell appeared with chief executive James Bevan to answer questions posed by the Industry and Regulators Committee on water companies’ environmental performance and the EA’s role in tackling pollution.
Bevan said the public will ultimately foot the bill for investment in large infrastructure schemes, whether through taxes or increased water bills, but cautioned that although “we will all pay, the cost of not investing is far higher than the cost of investing.”
The new chair told the committee he is “strongly in favour of smart metering” as a powerful tool to manage water consumption and underlined the need for demand management through behavioural change. “We use too much water in this country,” he said. “I’m personally strongly in favour of smart metering to make people more aware of their usage.”
He advocated for metering to be made mandatory where feasible, while recognising the current limitations to installing meters in apartment blocks and converted houses.
Bevan, who first warned of “the jaws of death” in 2019, told the committee the EA supported water companies’ efforts to change consumer consumption habits: “Every member of public has a role. Changing behaviour to use less will be one of the most powerful things to do.”
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