Sorry seems to be the hardest word

Management & Regulation, Natural Environment, Processed Water

But it had to start there, and be the start of something far-reaching says CIWEM director of policy Alastair Chisholm.

Reflection and contrition aren’t words you tend to associate with the privatised water industry. But the fact it took the leap of sticking its head above the parapet to utter those words when it must have known there was a very high chance it would get shot off, signals how big a hole it's in and its need to start climbing out, however painful that might be.

It did give its enemies more than enough ammo. Presenting what may well be £10bn of statutory spend – subject to regulatory approval, as part of the regular business planning and investment process and its response to the government’s Environment Act and Storm Overflows Discharge Reduction Plan – as an “ambitious plan” stretched credibility.

A national platform pulling together all the near-real-time reporting companies have been told to deliver by the end of this year, into one place is nice but not essential.

Full storm overflow plans detailing what’s being done for each overflow were a decree by Thérèse Coffey if not her predecessor. And working with communities to secure “up to” 100 river bathing water designations could end up being a lot less than that.

Economist and water-commentator Prof Dieter Helm called it spin. Elsewhere, outrage and incredulity focused on an apology perceived as hollow. Or that it reflected not on boardroom behaviours and the historic excess shareholder profits, but pollution for which customers would have to foot the bill to clean up, some of which companies are not fully to blame for.

More or less, we the customer will always pay. But we should have been paying a bit more a long time ago when costs of living, borrowing and infrastructure delivery were cheaper and the political obsession on low bills and least cost was needless. And, when focus on dividends should have been a lot sharper.

It was never going to be easy, but this very much has a lance the boil feel to it from the industry: If you’ve cheated, ‘fess-up, reap the whirlwind, settle or reconcile and then hopefully move on still in one piece.

Reaction hasn’t been entirely negative. River Action spoke of an end to the “denial phase” and the importance of a solutions-focused stage that looks to achieve as rapid progress as possible. Absolutely.

Other campaigners and the Environment Agency’s Chief Executive called it a small but welcome first step.


Downing Street meanwhile expertly tied itself in knots, saying it doesn’t want customers to foot the bill but forgetting its predecessors were the architects of the privatisation in the first instance and then deregulation since 2010 that has ultimately led to all this.

The Government of course, set out the Storm Overflows Discharge Reduction Plan – which this is a response to – and proposed the £56bn programme of investment to be funded by customers.

Moreover, its current Secretary of State for the Environment has canned proposals to introduce a nationally-consistent, single social tariff to protect vulnerable water customers from the worst impacts of bill increases. Is this a u-turn?

In some senses of course, Government will be laughing themselves silly. Water companies confessing diverts all the attention from the policy and regulatory negligence over the years that has seen not just water industry but widespread and seemingly worsening agricultural and urban run-off pollution become so big a problem.

Some use the phrase “asleep at the wheel” but government policy has since 2010 very wilfully undermined environmental protection of water where it might be perceived as a hindrance to development, farm productivity, public freedoms or business profitability. That mentality has to change.

Where now?

So where next? Government’s put forward its prospectus in the Environment Act, Storm Overflows Plan, Plan for Water and some tweaks to regulator funding and powers. There are threads of good thinking in that but many have said it has the feel of deckchair-shunting on a sinking ship. Reactionary stuff ultimately aimed at keeping a crisis in-check rather than properly putting the building blocks in place for recovery.

There’s a general election coming before the end of next year and healthy waters is a bona fide election issue. Labour says it has a plan to fix things by 2030. It’s hung around legally binding targets, curtailment on dividends but doesn’t yet appear to look further than the water industry.

But what’s needed is a full review of how water management is done – in England at least. A review which understands, recognises and actually values the outcomes we as society want – have – to achieve.

Delivery of safe, reliable drinking and wastewater services. Nature recovery. Climate resilience. The unlocking of health and well-being benefits that come from the ability to be by, or in the water environment.

Then design the frameworks and delivery mechanisms – and necessary capacity and investment – needed to deliver them effectively and as cost-efficiently as possible.

That means a properly strategic, catchment-by catchment issues and opportunity-mapping approach, with a delivery mechanism that can ensure the biggest issues are tackled first whether they be sewage, farm runoff, urban runoff or anything else.

Dieter Helm has set out his thesis on it. It could also conceivably be achieved by a beefed-up and un-shackled Environment Agency, an Ofwat function that has been through its environment-101 training and reformed water companies with public interest firmly embedded in their governance.

It would need to factor-in the nexus with flood risk management and carbon sequestration plans and mechanisms too and ensure capacity in local authorities to reflect that a lot of the pressures are local ones.

Or, it could be something quite different. All options should be on the table and presented to the electorate before the end of 2024 but the consistent factor should be they all include workable mechanisms to drive improvement across the board, in the most multi-beneficial way possible, and the capacity to ensure that. Plus, reflect that water is an essential public good.

30 years on from the last major shake-up of the sector, we’re in dire need of something fresh, that’s configured to be fit for purpose for the next 30 – and all the climate extremes and other pressures they’ll bring.

Alastair Chisholm is CIWEM’s Director of Policy

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