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from Water UK

theView from Water UK
22 December 2008


Flood management measures welcome

The government has published its long-awaited response to Sir Michael Pitts review of the 2007 floods. Among other measures, Hilary Benn MP has created a new Flood Forecasting Agency to provide a better warning system.

The water industry has been proactive in addressing lessons learned from the summer 2007 flooding incidents and carried out a full review of emergency procedures addressing the needs of consumers, supply interruption, and mutual aid across the industry.

The draft Floods and Water Bill consultation expected in the spring will aim to create a simpler, more effective regime for flood and coastal erosion risk management in England and Wales, and improve the sustainability of supply in water-scarce areas.

Water UK strongly supports the need for proper co-ordination on flood management and hopes that the Bill will address this rigorously.

Government's response to the Pitt Review on flooding
Water UK press release

Government announcement

Contact: Jim Marshall or Dawn Waterman

Climate change

Surprise delay for urgent investment

The release this month of Ofwats supply-demand position statement caused some surprise in the industry and among stakeholders, including other regulators, for its apparent suggestion that investment to prepare for climate change should be delayed.

The justification seemed to be the prospect of new scenarios by the UK Climate Impacts Programme, which will now be released in 2009 rather than 2008 as previously planned.

Ofwats intention was certainly not to suggest that water companies should not be taking into account the impacts of climate change. After all, planning for the impacts based on the best available evidence is required by government, and is absolutely essential if the industry is to continue to provide high quality services in the future.

Yet some clarification would certainly be welcome. Regulatory uncertainty at this stage of the planning process is not helpful.

Ofwat supply and demand policy

Contact: Bruce Horton

Adaptation - a new Water UK briefing

Amidst the recent focus on reducing emissions, evidenced by the Climate Change Committee's first main report and talks in Poznan to build a post-Kyoto platform, it is important not to overlook the need to adapt to the inevitable consequences of global climate change.

In addition to its extensive work in climate change mitigation, the water industry is taking a lead in adaptation, because the many impacts are felt first and most significantly by the water environment.

Good progress has been made in preparing for these impacts, but climate adaptation is set to be a priority in company business plans for the foreseeable future.

Adaptation briefing

Water UK press release

Update on water industry action on climate change
December 2008

Contact: Bruce Horton

Is the climate changing in Europe?

The European Council and the French Presidency have reached agreement on the so-called energy and climate package.

Although climate change is to be one of the priorities for policy actions, the financial crisis and industrial pressures made negotiations very difficult.

Despite criticisms of the package, it is a step forward in agreeing that our approach to energy use and management should be different.

Political efforts so far have been focussed on energy. Will the politicians soon realise that water is equally important when it comes to climate change? No water, no life.

European Council press release

Contact: Gaetane Suzenet

Price Review 2009

The value of consistent regulation

The 2009 water price review has been notable for the willingness of regulators and other stakeholders to work together.

So it would be a pity if tensions emerging on important policy areas were to affect the transparency and stability of regulation so prized by investors.

Surveys show that, while investors look hard at management risk, political and regulatory risk are key. For those who recall the 1999 price review, and the aftermath, this is not news.

Ofwat has a hard task to fix an appropriate cost of capital for five years. Retaining investor confidence is essential if the industry is to go on securing the investment it needs and at the best possible rates.

Read full version

Contact: Janet Wright

When it comes to the crunch... a tough time for a price review

The availability of market finance and its likely cost have both moved a lot. But the expectations of customers and regulators (and probably most stakeholders) have almost certainly stayed right where they were.

Which is another way of saying that the next few months are going to tough. Tough for companies in England and Wales, as they finalise 2010-2015 business plans ahead of publication in April. And tough for regulators, as they move to issuing draft price limits for consultation in August and final price limits in November.

What does the industry want its customers and stakeholders to know as the dance of the periodic review takes to the floor for the fifth time since 1989? Seven big things...

Full comment

Contact: Barrie Clarke

Water environment

CAP clearer on water management

Recently the Ministers of Agriculture reached an agreement on the Health Check of the Common Agricultural Policy. The objectives of this check were to simplify provisions where possible and address new opportunities and challenges.

The Health Check rightly identified water management as one of the challenges.

Water UK welcomes this step forward and the acknowledgement that water management should be allocated more funding under the Rural Development Programmes.

The next step should be to address how the Water Framework Directive can be taken up within the discussions on cross-compliance beyond 2013, when the dialogue on the budget re-starts.

"Health Check" of the Common Agricultural Policy

Contact: Gaetane Suzenet

Water Framework Directive

River Basin Management Plans published for consultation

Today's publication of draft River Basin Management Plans (RBMPs) is a milestone in the implementation of the Water Framework Directive (WFD). Today also Water UK publishes a briefing summarising water industry views on progress to date and the complementary roles of different economic sectors.

Water companies are committed to playing a full part in implementation of the WFD by building on their success in meeting the requirements of earlier environmental directives.

In contrast to the earlier directives, the WFD highlights for the first time the impact on water bodies from different uses of land, particularly from agriculture and from aspects of urban life.

Sustainable implementation of the WFD depends on policy taking a new direction and on building a process of collaboration between all relevant sectors. A great deal has been achieved, but gaps remain which if not filled could threaten the sustainability of the project.

Water UK briefing

Contact: Steve Ntifo


Transfer of sewers will end uncertainty

Water UK anticipates an announcement by the government that ownership of private sewers and lateral drains in England will be transferred to water and sewerage companies from April 2011.

The transfer is a positive move that would end a long-standing, unfair and inconsistent arrangement.

As well as removing liability and uncertainty for customers, the change will help promote integrated management of the sewerage network and development of surface water management plans a key recommendation from the Pitt Review to minimise the risk of flooding in urban areas.

Private sewers date announced
Water UK press release

Contact: Phill Mills


the View...

Time off to reflect...

By tradition and practice most UK families try to be together at the season of goodwill. The Defra family is surely no exception. So differences between family members on matters as big as climate change and water resources management could cause unhappiness. The value of consistent regulation cannot be overstated. Time off to reflect on the scale of the economic challenge facing every family in 2009 should help put things into perspective.

Contacts over Christmas and the New Year
Water UK wishes all associates and colleagues a very happy holiday.

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Related links

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Access the Water UK news service to view press releases, policy statements and comment as soon as they are published. More

Price Review 2009

PR09, the crash and the big issues 03/12/08

An overview of water company investment plans 2010-15 26/11/08

Climate change

Adaptation to climate change Water UK briefing 12/12/08

Water industry action on climate change 12/12/08

Water Framework Directive

Publication of draft River Basin Management Plans


Government's response to the Pitt Review on flooding 17/12/08

Private sewers

Private sewers date announced 15/12/08