Government agenda to reduce water demand ineffective, report shows

Efforts by governmental bodies including the Environment Agency (EA) and the department for environment, food & rural affairs (Defra) have yet to make a significant impact on the amount of water people use at home and in industry, further highlighting the need for a national water efficiency campaign.

A report from the National Audit Office (NAO) called Water supply and demand management, points out that Defra had not announced a national per capita consumption (PCC) target despite promising to do so in 2018.

The report mirrors Utility Week’s Mind the Tap campaign by calling for a nationally-led water efficiency campaign and suggests Defra should implement and monitor the impact of a coherent message on valuing water.

It says efforts by the EA and Water UK to start a national efficiency campaign called Love Water have so far been limited to a Twitter feed since its launch in 2019.

The report further shows that persuading customers to consume less water has been left to companies, but notes “there is no evidence this has any impact on consumers’ behaviour”.

Defra should have done more to make water efficiency a priority for government, the report insists, adding it could have worked more with other departments to coordinate how they can reduce water consumption.

It suggests Defra should have worked more to influence other public bodies and departments to reduce water usage and introduce wider policies that could impact water consumption.

In the non-domestic market, the report notes the introduction of competition has not encouraged customers to be more water efficient – as was intended before the market opened in 2017.

Challenges to forecasting and managing water demand, NAO’s research finds, include the restrictions on companies of following a five-year business plan model. It says limited flexibility between the five-year periods made it prohibitive for companies to adapt plans or react to changing needs.

The NAO says as part of its research it found water companies felt PR19 guidelines did not provide sufficient steer on how to balance the need for investment with maintaining affordable bills, particularly where they had evidence that their customers were prepared to pay more to finance infrastructure investment.

The four companies that opted to appeal the final determination from Ofwat cited customer desire for investment over bill reductions as a key reason for not accepting the regulator’s decision.

The report recommends Defra should:

• provide guidance for water companies and facilitate sharing of information between them to support improving long-term resilience;
• fulfil its commitment to set a target for PCC;
• consider ways of promoting water efficiency more coherently to ensure there is a coordinated and credible message, and monitor and evaluate the impact of any such campaigns;
• review the business retail market to identify barriers to achieving improvements in water efficiency and how to overcome them;
• identify all opportunities to influence and work with other government departments to reduce usage by hospitals, schools and other large public sector users, and influence policies that have an impact on water consumption and long-term resilience;
• provide a stronger steer to Ofwat and the water companies on the expected levels of investment by water companies. This should be informed by evidence on customers’ willingness to pay, commissioning new research, if necessary.

Meanwhile it suggests a collaborative approach from Defra, Ofwat and the EA should:

• review water companies’ progress on leakage and PCC during the coming AMP cycle, and ensure that water companies have contingency plans if progress is too slow;
• review business and resource management planning processes to ensure the need for a long-term strategy and targets does not cause delays to potential improvements in water companies’ performance.

Over the coming decades demand for water is set to rocket because of climate change and population growth while abstraction must fall to protect the environment.

In England and Wales an additional four billion litres of water will be required each day to meet the population’s needs by 2050, with demand exceeding supply as soon as 2034, prompting a need for urgent action by all stakeholders to reduce water consumption.

In an interview with Utility Week, shadow environment minister Luke Pollard criticised the Environment Bill for failing to prioritise water and efficiency. He said the bill “lacked ambition” by not explicitly including a provision for a water labelling scheme.