Policy And Regulation Updates

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Storm Overflows

Water Firms Accelerate £180m To Cut Storm Spills - Water and sewerage companies are to accelerate £180m of investment over the next year to speed up the stemming of sewage spills from storm overflows. 

The news was announced by Defra following environment secretary Steve Barclay’s December call to the industry to measurably reduce discharges before 2025.

Barclay said the spending was expected to prevent more than 8000 discharges. It comes in addition to the £3.1bn being spent under PR19 allowances.

Recreation

Environment Agency To Take The Plunge With 27 New Bathing Water Designations - The Environment Agency has consulted on the creation of 27 new designated bathing waters across England. These are popular swimming spots in rivers, lakes and beaches, from Tyne & Wear to Totnes. 

If designated, the sites will receive regular water monitoring from the Agency, who will also investigate pollution sources and identify steps to be taken in response, which could include actions by water companies, farmers and others.

Regulation

Department For Business And Trade Confirms Growth Duty For Ofwat - Ofwat – along with Ofcom and Ofgem – will from next month have a new duty to promote economic growth, under the 2015 Deregulation Act.   

The Department for Business and Trade said the change, which is subject to Parliamentary approval of secondary legislation, will be accompanied by refreshed statutory guidance for the regulators.

NGOs And Water Companies Collaborate To Champion A New Water Regulation Model - The Sustainable Solutions for Water and Nature (SSWAN) partnership has published an outline of a new model for regulation of the water environment.

The SSWAN partners are: Green Alliance, the RSPB, The Rivers Trust, Wessex Water, The Wildlife Trusts, CIWEM, The Wiltshire Wildlife Trust, Sustainability First and Water UK. The proposal is to replace the current sector-specific siloed approach with a new framework which works at catchment-scale, brings sectors together under a common framework, and champions natural solutions. 

The thinking comes with a Call to Action for the post general election Parliament.

Water Supply

Ofwat Approves Thames Funding For Coppermills And Hampton Waterworks Upgrades - Thames Water will invest £400m on improving and upgrading its Coppermills and Hampton water treatment works, as part of its work to increase the resilience of London’s water supply. 

Ofwat has approved the funding from the pot it ringfenced at the PR19 price review, which Thames had to meet specified conditions to access.

New Water Credit Scheme To Be Deployed To Expand Cambridge - In a joint statement from DLUHC, Defra, the Environment Agency and planning authority the Greater Cambridge Shared Planning Service, it was announced that a market for water credits is to be opened to unlock development in Cambridge. Development in parts of the city is currently gridlocked due to Environment Agency concerns about over-abstraction and water scarcity. 

While detailed design work is yet to be conducted, the plan is to create a scheme under which credits will be created through homes and businesses in Cambridge retrofitting water saving devices, and selling these credits via a market operator to developers, to offset the water impact of their building work. 

Other proposals in the joint statement included: water companies to provide incentives to developers to meet a 110 litre per person per day standard; a new reservoir in the Fens; and a new water transfer to Cambridge from Grafham Water.

Innovation

Ofwat Consults On Doubling Its Innovation Pot In 2025-30 - Ofwat is consulting on a £400m Innovation Fund for AMP8. The plan is to keep the annual Water Breakthrough Challenge ‘Catalyst’ and ‘Transform’ competitions for water companies, but to boost the value to £250m. The remaining £150m would be split between two rounds of the Water Discovery Challenge for external innovators; a new stream for strategic collaborative challenges for all water firms to work on together; a new cross-sector pot; and a new implementation fund. The consultation runs until 30 April.

M&A

Competition Watchdog Opens Its Inquiry Into Pennon’s Purchase Of SES Water - The Competition and Markets Authority (CMA) has launched its merger inquiry into Pennon Group’s takeover of SES Water. 

It will decide by 7 May whether to refer the case for a fuller ‘Phase 2’ investigation. 
This followed an open invitation to comment, from any interested party, on the impact of the transaction on water regulation. 

The main line of enquiry will be whether the deal is likely to prejudice Ofwat’s ability to make comparisons between water enterprises.

Environment

Fighting Dirty To Mount A Court Challenge Over Safe Sludge Testing - Fighting Dirty, a campaign group led by George Monbiot, Georgia Elliott-Smith and Steve  Hynd, has secured the right to challenge the Environment Agency at the High Court for not delivering on a commitment to have sewage sludge tested for microplastics and forever chemicals before it is spread on agricultural land as fertiliser.

Law firm Leigh Day is acting for Fighting Dirty in the case, which is due to be heard on 9 July at the Royal Courts of Justice. 

Southern Water Fined For Fish Kill - The Environment Agency has successfully prosecuted Southern Water for a 2019 incident in which raw sewage escaped into a stream near Southampton for up to 20 hours, killing almost 2,000 fish. The company was fined £330,000 in court.

Performance

WICS Assesses Scottish Water’s 2022-23 Performance - Regulator the Water Industry Commission for Scotland has assessed Scottish Water’s performance in 2022-23 and found the firm maintained its performance on key levels of service measures, and managed to catch up with £35m of capex slippage from the 2015-21 period. 

However, WICS noted there remained signs that Scottish Water is experiencing delays completing projects that were meant to be delivered in 2015-21.