Head of Public Affairs Daniel Johns explains why water companies should play a central role in driving a green recovery from Covid-19 and sets out what Anglian Water is proposing to contribute.

You’ll be hard pressed to find anyone who thinks the best way to recover the economy from Covid-19 would be to cut back spending and enter a new decade of austerity. Lessons have been learned from the financial crash, and the mantra now is thankfully quite different. Calls to invest in a green recovery, and build back better, echo from all corners of political and public discourse.

As a company that serves almost 7 million people in the east of England, and employs around 5,000, we agree. As a purpose-led organisation, which enshrined in our Articles of Association last year the need to act in the long-term public interest, we also agree. The worst thing we could do would be to cut back our spending plans, particularly when all of our capital investments are funded using Green Bond finance, meeting strict criteria to improve the health of the environment, reduce carbon and prepare for the impacts of climate change. While Covid-19 is forefront in most people’s minds, the greater threat of climate change still looms large here in the UK (nowhere more keenly than the East of England) and around the world. Our belief and one that is supported by our customers, is that the public interest is served best by water companies spending more on tackling these long-term threats now, rather than passing the buck to future generations.

It was therefore very welcome that the Water Minister, Rebecca Pow MP, headed a joint letter to water companies in July to ask for investment proposals from water company CEOs that would help create jobs and boost regional economies. Water companies are particularly well-placed to help deliver a green recovery from Covid-19. The scale of our operations, presence in every part of the country, access to sustainable finance and established contractual frameworks - featuring both major engineering partners and small start-ups - mean that we can scale things up quickly. All without adding to public sector debt.

For example, Anglian Water responded to the Minister’s letter with proposals to accelerate £465 million in investment over the next five years:

• £315 million to make an early start on more than 200 schemes in our Water Industry National Environmental Programme. These schemes have already been scrutinised by the Environment Agency, and agreed by Ofwat, so just need final approval from the Environment Secretary. A green light to these ‘amber’ schemes would allow us to pursue dozens of new treatment wetlands like our flagship scheme with the Norfolk Rivers Trust at Ingoldisthorpe, and improve 1,400km of rivers in the region.
• £100 million to install an extra 540,000 smart meters by 2025, to bring our overall plans to well over one million meters in the next five years. We are already installing more than 700 smart meters per day and would like to push this to beyond 1,200 per day. Like Thames, Southern and other companies in water-stressed areas, we are installing smart meters because they allow us to spot leaks in customer homes as well as in our networks. They give customers access to data that helps them cut their consumption and save money in bills.
• £50 million to install intelligent sensors and control systems across our water and water recycling networks and build a smart water system. We’ve been trialling these technologies in recent years and they promise to deliver big gains on leakage, pressure management, flooding incidents and the handling of storm overflows. We’re now ready to bring forward our plans and roll them out at scale.

These proposals together could create hundreds of jobs in our supply chain, including in UK-based SMEs that have had to furlough staff, and in river and wildlife trusts that we would increasingly like to work with to deliver our environmental programme.

These individual proposals are important but with others’ help we think we can achieve even more. So last month we published our Five point plan for a green recovery. This starts by setting out for each of the five themes below what we have achieved to date and are committed to do in future. But importantly the plan also describes ‘the future we want to see’, including policy reforms that we think could make a massive difference as we emerge from the pandemic.

• Becoming a net zero carbon business: the entire water sector in England is committed to net zero by 2030 and in November will publish a detailed routemap to get there. But most emissions related to water occur in the home, through heating water for showers and hot taps etc. So, as outlined in the Sewage (Inland Waters) Private Members’ Bill, we would welcome a mandatory labelling scheme for bathroom products and kitchen appliances to highlight their water and energy footprint, and over time to take the most water wasteful products off the market. Building retrofit schemes like the new Green Homes Grants also need to encourage water saving measures that save energy.
• Accelerating sustainable housing and infrastructure growth: we have published guides that help local authorities and infrastructure providers adopt integrated water management approaches and would like to see tighter water efficiency design standards within Local Plans, especially in area of water scarcity, like in the Oxford-Cambridge Arc growth region. At the moment these are not part of national planning policy. We believe this needs to change to help drive down water consumption in the future.
• Creating green jobs and boosting skills growth: we took a principled decision at the start of the pandemic not to furlough any of our staff, and to honour all job offers, including for the 50 new apprentices starting with us this autumn. 7% of our operational workforce is on an apprenticeship, while close to 18% are in eligible training. We would like to work with the government on a ten-year skills strategy including to enhance the Apprenticeship Levy.
• Delivering climate change adaptation and resilience: we were the first organisation to publish a third five-yearly adaptation report under the Climate Change Act’s reporting power. The report contains our current evidence on the impact of climate change we are seeing, and expect to see, together with our progress and future plans in reducing this risk. We hope our report is a useful input to the third UK Climate Change Risk Assessment, being published by the Committee on Climate Change next year.
• Enabling nature recovery: we now apply a ‘six capitals’ approach to decision making, so that investment proposals are judged not just on their financial merits, but also on how they add to the value of natural capital in the region. We have started to apply a 10% biodiversity net gain requirement to all our capital projects and think the Environment Bill should not exempt Nationally Significant Infrastructure Projects from this.

Our proposals have been positively received by the government and we hope that announcements will begin to be made very soon.

Daniel Johns
Head of public affairs, Anglian Water