In hot water
Dusty committee rooms in Westminster aren’t often places for a take-down of conglomerates and regulators but occasionally they can catch out
The powerful Commons Public Accounts Committee, which has oversight of the Treasury and more, has delivered a damning verdict on the water industry, its regulator and the Whitehall department in charge.
In the committee’s report, published just ahead of the summer recess, the MPs slammed all involved for having “taken their eye off the ball” in the management of water resources.
The charge sheet was blunt: “Demand for water in England will exceed supply by between 1.1 and 3.1bn litres a day by the 2050s. Currently 3bn litres – a huge 20% of total supply – are lost every day through leakage from pipes.”
Reducing water waste is an issue the CIPHE has been calling on for years and that requires water companies to improve infrastructure, and highlights the issue of water loss through poor workmanship in an under-regulated industry. We are glad that the new report will strengthen our voice and accelerate action.
The committee’s report condemned the government for failing to be clear with water companies, privatised in 1989, on how they should balance investment in infrastructure with reducing customer bills or efficiency.
“Defra has yet to announce a target for personal water consumption despite a commitment to do so by the end of 2018,” it says. And “ponderous” water companies have made “no progress” in reducing leakage over the last 20 years. Meg Hillier (Lab), chair of the committee, warns: “It is hard to imagine, in this country, turning the tap and not having enough clean, drinkable water come out – but that is exactly what we now face. Defra has failed to lead and water companies have failed to act: we look now to the Department to make up for lost time and see we get action before it’s too late.”
Called to task
And they haven’t been the only powerful voices of concern. In March, the National Audit Office’s investigation into water supply and demand management told the industry to get its house in order. The NAO, England’s spending watchdog, told Defra to back the demands from Ofwat on the utility firms.
“Reducing demand is essential to prevent shortages as water companies are running out of low-cost options for increasing water supply,” the NAO says. “Water companies’ long-term progress on tackling leakage and reducing water consumption has stalled over the past five years, and companies are only now starting to develop bulk water transfer solutions at the scale required.”
It adds: “Defra will not be able to achieve value for money unless it provides stronger leadership across government, and a much clearer sense of direction to water companies, the water regulators and water consumers.”
Meanwhile, the chief inspector of drinking water, Marcus Rink, is set to ask for an update from the government on his call for mandatory registration of plumbers in a bid to improve the quality of installations.
His annual letter to the government last year said: “Competency and training of plumbers, and the control of products and the fittings they use, would reduce future risks, particularly if required through an obligatory accreditation scheme such as WaterSafe.”
The trigger for all this was last year’s warning by James Bevan, chief executive of the Environment Agency, who warned that England will be caught in the “jaws of death” and face severe shortages unless attitudes changed to water efficiency.
So why has it taken this long for people to start demanding action?
Change will come at a cost. The National Infrastructure Commission suggests we need £21bn of investment by 2050 to secure our supplies. That money will have to come from somewhere. And with the population forecast to reach 75m by 2050, the country has a deadline to overhaul a worn-out system that dates back to the Victorian era.
Julie Spinks, director of the Water Regulation Advisory Scheme (WRAS), explains: “Water efficiency is a massive issue for the resilience of the network.”
So Defra has begun by consulting on the per capita water consumption figure. It’s currently 141 litres per day, which is unsustainable as the number of households increases. Spinks says: “The current rate is too high. Defra has consulted and wants to review the water regulations in future. But a year later we don’t know what that will look like.”
The CIPHE has been leading the push for the industry to radically rethink its approach. That work was showcased in the manifesto shared with policymakers and politicians during December’s election. Our ongoing lobbying of both industry and government to make it happen has continued to review, update and strengthen enforcement of the Water Regulations.
Through its role on the WaterSafe Board, the Institute has also been working with Approved Contractor Scheme Operators to present an industry-wide united message on matters of competency and efficiency. Government relationships built during the focus on the net-zero agenda also enable the Institute to get the same officials to understand the how integral water efficiency will be to its success.
CIPHE chief executive officer Kevin Wellman explained the next steps in delivering on the manifesto commitments – targeting consumers. He advises: “A sustained campaign should be introduced to change consumer attitudes towards water conservation.
“We are working to influence the Comprehensive Spending Review because the government should support and invest in environmentally targeted projects, including conservation and harvesting of water.”
In its defence, Ofwat is in the final stages of setting tough targets for water firms and is pledging to be tougher on managing them.
A spokesperson for Ofwat tells P&H Engineering: “This is an important issue and Ofwat will carefully consider the committee’s report and recommendations. This is why we have taken action to improve long-term planning and have set out a £51bn programme over the next five years to make major reductions to leakage, cut pollution by a third, and back new infrastructure. We have also unveiled an innovation fund to find imaginative ways to tackle these complex issues.
“This [PAC] report also serves as another reminder that water companies must stay focused on reducing leakage and improving water efficiency. We will continue to push ourselves and work with government, regulators, companies and others to make sure we all deliver for customers and the environment.”
Unsurprisingly, the water firms have hit back, defending their record. Water UK, which represents all the major water companies, says the industry has changed since privatisation when supply and treatment made the UK the “dirty man of Europe”.
It says firms have reduced the amount of water leaked from pipes by 7% to the lowest level since records began in the mid-1990s. Supplies are passing 99.96% of quality tests.
Water UK says: “We know more needs to be done, however, which is why we have ambitious plans to halve leakage by 2050. We also want to help government embed water efficiency in our national psyche.”
The water firms say consumers and manufacturers have to be involved too as repairing pipes alone won’t be enough. They also want labelling on products that rate their efficiency, similar to energy ratings.
Spinks backs the idea of nudging consumers in the right direction. A labelling scheme has started, but at the moment it is voluntary: “There’s a role to publicise the fact that the labels are there to share information on products so consumers can save money as well as water. But unless there’s take-up by the manufacturers and installers, it won’t change anything.”
Changing an industry financed around increasing customers and consumption is not going to be cheap. Money is the big issue and it’s not just the regulators that are concerned. In June, Yorkshire Water’s credit rating was downgraded to BBB by ratings agency Fitch because of “Ofwat’s challenging final price determinations”.
It had already raised concerns for the industry due to the fallout from the coronavirus, including “delayed customer payments, increased bad debts and modified consumption volumes”.
And that’s not the end of it – Brexit is looming. Julie Spinks explains: “Brexit affects our water regulations from January. The government will enact changes on labelling products but they need to get their act together.”
This autumn the EU will ratify its drinking water directive, setting new standards on safety, cleanliness and sustainability – and that will include training for plumbers.
The text received political agreement from the European Council at the Environment Council on 5 March 2020.
Under the new rules, the quality standards that drinking water must meet are brought up to date, and a cost-effective risk-based approach to the monitoring of water quality is introduced. The updated rules also set out minimum hygienic requirements for materials in contact with drinking water, such as pipes.
A clean job
The updated directive also addresses growing concerns about the effects of chemicals in water – endocrine disruptors, pharmaceuticals and microplastics – on human health.
It will also “promote training for plumbers and other professionals dealing with domestic distribution systems and the installation of construction products and materials in contact with water”.
The UK will have to decide if it will follow the directive. Spinks says: “I’m keen for the UK to adopt that principle.”
CIPHE chief executive officer Kevin Wellman says the Institute is as well: “We cannot have a safe, sustainable water supply without a minimum standard for a competent person. That means registration – and action from the government.”
The water firms have committed to cleaning up their act with £5bn of investment over the next five years.
Water UK says: “We are passionate about addressing climate change, protecting the environment and serving customers with clean and resilient water supplies and are working with all our stakeholders to address the challenges ahead.”
After years of inertia, registered plumbers and higher standards could be on their way. Spinks says changes could come quickly: “The autumn will give us all a clear indication of what happens next with a lot of things.”
You can find the NAO’s verdict in full at: www.nao.org.uk
Get the latest from Water UK: www.water.org.uk
Read how you can encourage your customers to save water here
CIPHE members can qualify for WaterSafe membership. Apply by emailing email@example.com