Sewage once again floated to the top in Parliament as Labour’s opposition day debate forced government to make the targets set out in the Storm Overflows Discharge Reduction Plan (SODRP) legally binding. It marked sewage pollution out as a bona fide local elections campaigning issue. But some of the claims around how quick progress can be made and who will pay sound fanciful. Alastair Chisholm sets out why.
As the May local elections approach, data on storm overflow sewage discharges has become campaigning gold to MPs – particularly those in constituencies where local businesses and tourism are impacted. Labour and the Liberal Democrats have leapt on the issue and are playing it for all they’re worth, hammering the “Tory sewage scandal”.
The realities of the extent of sewage pollution are shocking and disgusting. And in post-truth politics these days, once that’s established we should probably expect buckets of spin as opposed to reasoned debate.
But longer-term, pulling the wool over the electorate’s eyes over how quickly the problem can be rectified and who will ultimately have to pay won’t do opposition parties any favours should they get into power in the next General Election.
No politician has been hitting the campaign trail on sewage harder than shadow environment secretary Jim McMahon. He’s quite rightly been holding government’s feet to the fire and is challenging their plans with one of his own.
Labour’s plan was effectively set out as a private member’s bill – the Water Quality (Sewage Discharge) Bill which formed the basis for yesterday’s debate. It set out to make sewage discharge targets legally binding and more ambitious. It proposed a mechanism of automatic financial penalties on water companies for storm overflow discharges, alongside setting a strategy and undertaking periodic economic impact assessments.
The target for that strategy – as distinct from the current SODRP – was proposed as 90% reduction in storm overflows by the end of 2030. A significant step up in ambition.
What marks this plan out as distinct from what Government has already put in place is this target date and the mechanism for how measures taken might be paid for. This was summarised by McMahon’s Twitter summary: Achieve his Bill’s target “at no cost to households”.
Who really pays?
Of course, there is no detailed plan available to put meat on these bones yet and Labour will keep its powder dry until far closer to a general election given how important economic competence will be, come polling time.
But these signals sound misleading, and here’s why:
Labour appear to be saying that the bill for going significantly harder and faster on sewage clean-up won’t bother already-stretched households because water companies will be effectively forced to pay for this through the automatic penalties it would establish.
To a disgusted public the notion sounds appealing, but reality is likely to be quite another, less palatable one. With water companies currently holding more than £60 billion in debt, piling on the costs of clean-up could likely send some to the wall and for many others, investors running for the hills.
In such circumstances government may have to step in and bring companies back into public ownership and perhaps that’s the intention. But who pays then? Advocates of public ownership argue that it would save 20% on the privatised model in terms of customer bills but even so, households would still be the only ones available to pay for the bulk of clean-up – as they are today.
With a target of 2030 to reach 90% reduction we’re entering the realms of fantasy.
Whilst some additional investment in clean-up has been brought into the current water company delivery period which runs to the end of 2024, much of what will happen between now and 2030 is being planned and negotiated at the moment, for approval by economic regulator Ofwat next year and delivery between 2025-29.
The key piece of that negotiation for sewage is the Water Industry National Environment Programme – a £4.8 billion programme for 2020-24 likely to grow to £20-25 billion for 2025-29 if current indications bear true. All this is informed by the SODRP and its 2050 target for getting all storm overflows down to an average of no more than ten discharges per year, and its interim 2035 target for high-priority outfalls.
For some customers even this could result in a bill impact of more than £300 per year on the average annual bill of £400. Going so much faster would add enormous extra cost.
Moreover, water companies most burdened by the greatest number of combined sewer systems and failing overflows are – money aside for one second – worried about the ability to physically deliver the necessary engineering in that timeframe.
Given this, getting 90% of the way to a 2050 target, effectively in one, five-year water company investment period rather than five sounds like either genius or madness.
Selling false expectation
Without any doubt it’s a great thing that finally the importance of healthy water is near the top of the political agenda. For far too long its been paid lip service; under-prioritised compared to other essential public services.
But now we’re past the point of denial that our water environment is in crisis and there is recognition that urgent action is needed, we really need honesty from political leaders on what the options for clean-up and recovery are, what they will cost and who will have to pay.
Politicians are latching onto campaigners and selling levels of expectation to a public now extensively keen to see rapid improvement.
But water is a complex, multi-dimensional thing to manage, involving huge amounts of expensive infrastructure. It’s a long-term activity that demands long-term commitment, investment and delivery.
Clean-up is possible but it won’t be quick, it won’t be cheap, and politicians should be careful of writing expectation cheques to the electorate they’ll struggle to cash should they reach power.
Alastair Chisholm is CIWEM’s Director of Policy