The Government announced today (2 February) that Ofwat must ensure England’s water industry does more to protect the environment. It made these announcements as it laid out its priorities for the regulator in the next five-year period.
The Government will release a new Strategic Policy Statement, which will be officially laid in Parliament later today. It will highlight the importance to protect the environment for water sector economic regulators.
It will outline the Government’s expectation that Ofwat will prioritize actions to protect and enhance the environment and provide a resilient and sustainable water supply.
It confirms the government’s expectations that water companies will significantly reduce the volume and frequency of sewage releases from storm overflows. Ofwat is also urged to challenge them to show more ambition in protecting the environment while still focusing on the basics.
These priorities build upon the clear direction that Government has already given through direct action in the area, including:
- Additional duties for the government and water companies under the Environment Act include the obligation to publish near real-time information about storm overflows, and to prepare a statutory plan to address the issue by September 2022.
- The Storm Overflows Taskforce is responsible for ensuring transparency and increased monitoring through its Storm Overflows Taskforce. The Environment Agency has been monitoring the network 14 times more over the past five years. It currently monitors 80% of storm surges and will be monitoring 100% by 2023.
- By doubling the budget for Catchment-Sensitive Farming, we are providing practical solutions to farmers in order to reduce agriculture’s pollution. This partnership includes Defra and Natural England, and the Environment Agency. It provides free 1-2-1 advice for farmers about reducing pollution from farmyard manure and soils.
- Water companies face tough enforcement measures. Seven companies were convicted by the Environment Agency last year and fined more than 100 million. The Agency has also initiated a major investigation into any unauthorised spillages at sewage treatment facilities.
The SPS gives priority to unsustainable abstraction, protecting priority areas such as chalk streams and ensuring greater flood resilience.
Rebecca Pow, Environment Minister:
Water quality is a priority. Ofwat is the first government to make it clear that they will prioritize actions by water companies in order to protect the environment and bring about the improvements we all desire. I have been very clear about my expectations of water companies. If they fail to meet them, we will take strong action.
These priorities are based on the work that has been done to reduce the damage from storm overflows, improve monitoring, reporting of pollution incidents, making it more transparent, and to tackle run-off of agriculture.
Ofwat, as the economic regulator is responsible for determining where water companies should invest during each five-year cycle. It is the responsibility of the Government to determine the policy priorities and strategic direction.
The new SPS has an ambitious agenda. ConsultationOn the draft Government proposals in July 2021. It will influence the next five-year budget cycle, which will begin in 2025 and run until 2030. In the current spending period (2020-2025), 7.1 Billion has been invested in the environment. Among them, 3.1 Billion is being spent on storm overflows.
After the SPS has been laid in Parliament for 40 day without objection, it will become effective. Ofwat will then have to act in accordance this statement, explaining clearly how major decision support the delivery the governments strategic priorities such as its methodology of the upcoming price review.
The Government will publish a summary document listing all responses to the consultation. After it is formally laid in Parliament, the SPS will be available on gov.uk.