Water companies must plan for a resilient future

As activity ramps up for the 2019 Price Review, ensuring water and sewerage supplies remain resilient will be a key challenge. Policy Manager Sarah Thomas explores how water companies can effectively incorporate resilience into their business plans, against a backdrop of climate change, population growth and other environmental factors.

Water companies are busy planning what to spend their money on between 2020 and 2025 as they prepare to submit their business plans as part of the forthcoming Price Review. Ofwat, the industry regulator, has included resilience as one of its four key priorities, in addition to customer service, affordability and innovation. We agree that resilience is a crucial issue for both current and future consumers and we want to see companies setting out in their business plans how they will achieve this.

A key part of resilience involves companies looking after the water environment, such as rivers, streams, lakes and reservoirs. These resources need to be as healthy as possible so they can provide consumers with a clean supply of water, both now and in the future. As part of this, we’ll be looking for water companies to:

Take water from the environment carefully:

The water industry needs to abstract water from the environment in a way that doesn’t cause any damage to the ecosystems left behind. This is particularly difficult in the drier, more populous areas of the country, such as the south and the east. They also need to pay particular attention to areas that are part of statutory conservation schemes, such sites of special scientific interest (SSSIs).

Clean up after themselves:

Sewage needs to be treated to a high standard so that when wastewater is discharged back into the environment it doesn’t add to any pollution. With the latest figures showing almost a third more properties were flooded with sewage during 2016/17, we also want to see companies being more proactive when it comes to protecting properties against sewer flooding.

Plan for the future:

A growing population means that more water will be needed at a time when climate change is likely to reduce what is available. Our own research shows that demand for water could outstrip the amount of water available by up to 22% by 2050. All water companies need to start planning now so they can continue to provide a supply of water for future generations.

The Environment Agency works with the water companies to help them understand what action they need to take to increase the resilience of the environment. Part of our role is to make sure customers’ preferences are taken into account. For example, if new infrastructure is needed, such as to remove a particular chemical from the water supply, then this cost is passed on to customers. If this cost puts significant upwards pressure on bills, then we will press for the impact phased so that water bills remain affordable.

At the same time, water companies need to make sure they are doing enough now to avoid problems in the future. Working with other agencies, such as wildlife trusts or landowners, can help to keep costs low, as well as reducing the potential for future problems. We’re encouraging companies to work in partnership with others to help find joint solutions to shared problems – this way water consumer gets the best outcome.

We want to see the resilience of water and sewerage services increased during 2020-2025 and beyond. An important part of that will be delivered from securing a resilient and sustainable environment.