Water sector urged to increase natural capital in infrastructure plans

Water companies have been urged to incorporate more nature-based solutions in their business plans to play a part in the green recovery.

A joint letter from Ofwat, CCW, the Drinking Water Inspectorate, Environment Agency and government stressed the importance of natural capital. It followed George Eustice’s speech on Monday about the role of nature in the post-Covid and post-Brexit economy.

The secretary of state said the government would not only stem the tide of loss of nature and habitats, but turn it around and “leave the environment in a better state than when we found it”. He said following Brexit the country would be accountable for the decisions it makes relating to the environment, which would require a long-term approach and political commitment.

The regulators’ letter said companies must go beyond PR19 goals and the Public Interest Commitments to play their part in greening the economic recovery and described supporting the post-Covid ambition as an “opportunity to accelerate”.

“As a water company, you take the lead in delivering a safe and secure water supply, a thriving natural environment and great customer service,” the open letter said.

It invited the companies to make specific proposals to:

• accelerate existing plans and environmental priorities within the agreed 2020-25 plans, considering the enhanced use of nature-based solutions to deliver them;
• bring forward ‘enhancement investment’ proposals from 2025 and beyond; and,
• Implement specific new innovative ideas, which would benefit future generations or current customers. These could include: water resources, flood mitigation, net zero or water quality improvements.

The letter advised companies to consider the affordability impacts of any changes on billpayers and said the authors would welcome any proposals that could lead to lower bills in the future.

Support was offered for companies to overcome regulatory barriers to progress and said “we commit to working together to minimise these as far as possible”.

The secretary of state for the environment promised to keep his brief central to government policies post-Brexit when the country will no longer be subject to laws that protect the environment. Eustice said the environment bill will be published “shortly” to set out the approach for improving biodiversity, waste, water and air quality.

He promised to undertake a £5 million natural capital and ecosystem assessment and will appoint a chair to scrutinise the work to meet the targets laid out in the bill.

He said the new approach to the environment must reflect what worked well within the EU and what did not, with a willingness to “borrow” successful features from the old policies.

Eustice added: “There is no point leaving the EU to keep everything the same. The old model has not stopped the decline in our natural world. We must therefore challenge ourselves to think creatively, to innovate and to consciously avoid clinging to processes and procedures just because they are familiar.”

Eustice has been criticised by environmental groups for failing to provide clarity on plans to protect the environment. Friends of the Earth asked the government not to “water down planning laws that protect the environment”.

Campaigner Kierra Box said Eustice’s “vagueness of his own ability, and that of his colleagues, to protect our standards in the future is really worrying”.

The upcoming environment bill, which was first introduced in October 2019, was called a missed opportunity for water by shadow environment secretary Luke Pollard who argued that the bill should have explicitly set out water efficiency targets.

Earlier this month the Public Accounts Committee called for water efficiency labelling and per capita consumption targets to be included in the bill as well as regulations for new build housing.