Policy And Regulation Updates

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PR24

CCW Challenges The Affordability Of PR24 Business Plan Ambition - The Consumer Council for Water (CCW) has assessed water company PR24 business plans, scrutinising factors including affordability, deliverability, customer engagement, bill profiles, Performance Commitments, use of bill revenue, clarity of how customers’ money will be spent, nature-based solutions, and behaviour change as part of plans to secure future water supplies.

On affordability, CCW highlighted that only 16% of customers said they could afford the substantial bill increases (average 40%) proposed by companies in their plans for 2025-30.

River Health

Water Companies Publish A National Storm Overflow Plan - Water UK has published details of the English water companies’ updated strategy to cut storm overflow spills between 2025 and 2050.

The National Storm Overflows Plan consists of a document providing a national overview of company proposals, and an interactive map detailing the action planned for each individual overflow.

Phase one runs between 2025 and 2030, and will triple the current level of investment to £10.2bn, which Water UK said would fund 9,000 storm overflow improvements, eliminating 150,000 spills per year – including tackling nearly two thirds of spills near bathing sites, and nearly half of spills near conservation areas.

By 2050, the plan would address 325,000 spills per year, and prevent more than 4m discharges. All 14,187 overflows in England will meet or exceed every Government target by 2050.

Water UK called on Ofwat to back the bill increases needed to fund the plan, and on the Government to deliver supportive policy pledges including to end the automatic right of housing developers to connect to overloaded sewers; ban the manufacture and sale of plastic wet wipes; and consult on making water companies statutory consultees on planning applications.

Wales Holds Fourth Summit On Protected Rivers - Welsh stakeholders have held the fourth River Pollution Summit, focused on conserving Special Areas of Conservation (SAC) rivers and tackling phosphate pollution. 

Minister for climate change Julie James said in a statement that since the first summit in 2022, much had been achieved through collaboration,  including unlocking affordable housing and the Welsh Government developing an all-Wales nutrient calculator to help local planning authorities make informed development decisions. 

Wales’ environmental regulator Natural Resources Wales also presented on its actions, including the Teifi Demonstrator Catchment project, which is trialling novel regulatory approaches and different ways to visualise data in the catchment. 

James said: “I am confident the collaborative efforts initiated through the summits will continue to deliver results for people in Wales, continuing to unlock social housing development and providing the basis for further targeted initiatives to restore our vital river ecosystems to resilience.”

Water Resources

Supply Demand Gap To 2050 Increases - The Environment Agency has scrutinised water companies’ revised draft Water Resources Management Plans (rdWRMPs) and found the supply gap forecast for 2050 has grown.

The Agency found nearly 5bn litres per day, which is more than a third of the 14bn litres of water currently put into public supply, will be needed by mid decade. It explained that the deficit had risen (from c4bn litres a day) due to updated demand forecasts, additional reductions associated with protecting and improving the environment, and better representation of the baseline supply position without drought measures included.

The Agency welcomed “significant improvements” in the plans compared with earlier versions, including that the industry now pitched to exceed the Environment Act 2021 target to cut the use of water per head by 20% by 2038. The latest plans would deliver a 22% cut, up from 17% in the earlier drafts. But it called on firms to deliver the demand reduction and leakage promises, including by ceasing the rollout of any dumb meter so smart meters are prioritised.

On supply, the summary shared that the rdWRMPs contain proposals for multiple new schemes by 2050 that will supply 10m litres of water per day or more, including: four new desalination schemes, seven new reservoirs, five new water recycling schemes and multiple new internal and inter-company transfers. 

The Agency commented: “The inclusion of options such as desalination and water recycling mark a transition to new supplies that are independent from rainfall. These options are well established elsewhere around the world and expected to be an important step in ensuring resilient supplies in a changing climate.”

Customers

Ofwat Concludes Welsh Water leakage Investigation - On top of the £15m repayment to customers Welsh Water announced in May 2023, customers will see a further £9.4m coming off future bills, following the conclusion of an Ofwat investigation into leakage and per capita consumption (PCC) misreporting.

The regulator added that a further £15m of customer benefit will come in the form of additional leakage expenditure which Welsh Water will absorb rather than passing through to customers. That is on top of a Welsh Water commitment to invest an extra £59m before 2025 to address performance on leakage and PCC.

Welsh Water’s own assurance processes identified the misreporting concerns after an internal review concluded that elements of its calculations on PCC and leakage for the years 2020-2022 did not comply with regulatory requirements. The company apologised last year, and reiterated that apology following Ofwat’s announcement.

Regulators United On Debt Collection Protocol - Ofwat, Ofgem, Ofcom and the Financial Conduct Authority have issued a joint letter via the UK Regulators Network (UKRN) reminding regulated companies to avoid consumer harm when collecting debt. 

The watchdogs said companies should:

• Ensure an appropriate frequency of collections communications and reduce the frequency where it is not delivering positive customer engagement or is causing harm to consumers.
• Use a tone that is supportive in collections communications.
• Make information about free debt advice and how to access it clear and prominent in collections communications.
• Make it as easy as possible for advisers from free debt advice organisations to contact creditors and ensure customer service agents are empowered to resolve the issues advisers contact them about.

Class Action Cases Seeking Customer Compensation For Pollution Go To Preliminary Hearing - Class action cases against Severn Trent, United Utilities, Anglian Water, Northumbrian Water and Yorkshire Water had a preliminary hearing on 19 March at the Competition Appeals Tribunal.  

The cases are being brought by Professor Carolyn Roberts with law firm Leigh Day over allegations that water companies have underreported pollution incidents and over-charged customers as a result.

The CAT set a week in September to decide whether the claims can proceed as opt-out collective claims, and a January 2025 date for a second hearing to cover any additional issues.

Finance

MP Presses For Thames Water Collapse Contingency Plan - The Government has rejected calls from Liberal Democrat MP for Richmond Park Sarah Olney to make public its contingency plan for Thames Water’s failure. 

Olney led an adjournment debate on the contingency plan, and submitted three written questions seeking information on meetings between Defra and Thames Water to discuss the strategy, known as Operation Timber. But ministers have so far declined to share any detail. 

Olney demanded “drastic action” in the form of the triggering of the special administration regime, arguing: “Thames Water is no longer a functioning company, and the Government have a choice: either bail them out with taxpayer money, or listen to our calls to put it into special administration to then be reformed into a company for the public benefit.”

Resilience

Advisors Criticise Government Efforts On Climate Adaptation  - Two advisors have slammed the government for falling short on climate resilience. 
The Climate Change Committee (CCC) said the Government’s third National Adaptation Programme (NAP3) – the statutory plan to ensure the country is prepared for the effects of climate change – “falls far short of what is required”.

Baroness Brown, chair of the CCC’s Adaptation Committee, said:  “The evidence of the damage from climate change has never been clearer, but the UK’s current approach to adaptation is not working. Defra needs to deliver an immediate strengthening of the Government’s programme, with an overhaul of its integration with other Government priorities such as Net Zero and nature restoration. We cannot wait another five years for only incremental improvement.”

Meanwhile, the National Infrastructure Commission (NIC) criticised the government for shortcomings in its response to findings from the commission’s November 2022 study on reducing the risks of surface water flooding.

In a statement, the NIC said the government had accepted the principles behind a number of its recommendations, but “makes few new commitments on steps to manage surface water flood risk more actively and fails to accelerate work in key areas”.