The detailed business plans cover what they intend to deliver for their customers and the environment. Ofwat will scrutinise them before publishing an initial assessment of each plan. They will decide what companies will be allowed to spend, having given feedback, and received revised final plans in the interim.
The numbers were staggering: £96bn to be invested; getting-on for double the £51bn in the current period. That will impact customer bills, with significant rises to come for most by 2030.
CIWEM director of policy Alastair Chisholm sets out what he hopes the business plans to deliver.
“This is by far and away the biggest investment programme in our water infrastructure we’ve ever seen. It's what people have called for. Our water environment is buckling under the strain of increasing pressures and a legacy of underinvestment driven by a low cost, low regulation model. But that investment will need to seem fair and transparent.
I want to see the worst performing storm overflows, in the most popular recreationally used areas targeted for rapid clean-up, so people can swim, surf and paddle without fear of getting sick. But I don’t want to see a myopic focus on raw sewage spills above all else. Our waters are also in crisis because of nutrients from regular, legal effluent discharges. We need to see extensive phosphate reduction programmes to get nutrient loadings in sewage discharges right down.
When we get droughts like we saw last summer it was plain to see there wasn’t enough water for nature, as well as people. So, I want to see plans for new reservoirs, transfers, leak-fixing, and water efficiency programmes informed by smart metering and even rainwater harvesting schemes using water butts - which help keep water out of combined sewers.
We must leave enough flow in rivers for nature. That really mustn’t be forgotten because raw sewage pollution is the most politically captivating part of the equation.
I also want to see as much delivered as possible through natural solutions like wetlands and sustainable drainage. I’m not that optimistic on that front though, which would be a massive shame. There is so much potential for big water investment programmes to unlock wider benefits for nature and people with natural solutions.
The issue with all this is affordability. So, we need to see a big increase in vulnerable households given support with their bills. Because we’re not going to get this for free; people may want to see owners and shareholders paying for improvements, they will hopefully put up some of the money, but it’ll surely only be a small proportion of the total.
The big question now will be how much pressure will this package come under on grounds of cost now? Campaigners are being very vocal about why some investment wasn't made over the past decade and all seems to be falling on customers now and dividend payments given the state of things remain highly controversial.
Politicians want to be being seen as tough, but at the same time government will not want to be under pressure over bill increases that are perceived as too much, and which put everything on bill payers to pay for when many feel company owners should be putting more in themselves. Higher bills will need to come with significantly improved levels of performance. Its a very clear quid pro quo principle.
So, on that note, I also want to see Ofwat using its new powers on things like executive pay and dividends linked to environmental performance more robustly to reflect the hit customers are likely to take on bills.
This is the first new investment round since the sewage scandal broke and in last summer’s drought, we saw the first glimpses of the kind of extreme dry weather climate change is likely to bring more of. These business plans need to speak very clearly and ambitiously to these issues, as well as to the cost-of-living crisis.
We’ve not valued water properly for too long – time for that to change.”
Image used: Clare Louise Jackson/Shutterstock.com
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