Utility Week

UTILITY WEEK | DECEMBER 2021 | 27 Policy & Regulation greater investment there is more return to the companies via the regulated asset model. "There is a real urgency and desire to do it from the public, water companies and Parliament. The only people stopping them seem to be DEFRA [the Department for Envi- ronment, Food and Rural A• airs] and Ofwat, who have locked themselves into this dirty trap where they can't do anything for many years but have to give the impression that they are." DEFRA is due to publish its Strategic Policy Statement (SPS) for Ofwat in the new year, following a consultation launched in July on a dra† version. Pollard says this is an opportunity to clearly state the direction for the next ˆ ve years and to send a message to the sector about where its pipeline of invest- ment should be. "When they voted against ending raw sewage discharges, many people thought that meant a green light to continue dis- charging. The idea of 'progressive reduc- tions' is welcome but you need a timetable to make that a genuine commitment. In the next 10 years will that be 1%, 10%, 90%?" He calls for transparency with the public about what is going to change and by when. An end to discharges can't happen over- night but a realistic timetable can be set for improving the situation during AMP7. And SPS guidance and changes in investment strategies can be geared towards accelerat- ing the pace at the next price review period. As well as a timeframe, Pollard and other MPs question the costs of ending the use of CSOs, with estimates ranging from millions to hundreds of billions of pounds. "The government has gotten itself in a very curious trap by suggesting that ending raw sewage discharges could cost up to £660 billion and – to quote the minister – lead to raw sewage backing up in people's homes," Pollard says. "At the same time they have argued that spending £144 million on clos- ing raw sewage outlets in this pricing period would be suž cient to sort the problem. Either tinkering around the edges is suž - cient or it's going to cost huge amounts but it can't be both." Water UK has previously estimated the cost at close to £100 billion to separate out the 40% of the network that comprises com- bined sewer systems. "I'm inclined to believe the water companies, who say they can make substantial changes in the amount of raw sewage discharged for ˆ gures considerably lower than the amount quoted by ministers. But they have to be able to do that in their business plans. "If the ˆ gures being used by a minister range from £100 million to hundreds of bil- lions then it's very clear they have not under- stood the question. What is the cost versus what is the task being asked?" Richard Smith, partner at Sandstone Law, a practice that specialises in environmental, commercial property and development law, tells Utility Week it is impossible to know what the Environment Act means in practice until "a huge amount" of secondary legisla- tion is passed under it. "I see the act as a start because there are some broad policy issues now incorpo- rated into law, which is good. But they are extremely wide and make provision for the secretary of state to say how X, Y and Z will work in practice," Smith says. "The water section is very much about plans and reductions but granting powers to ministers to do things to gradually improve the situation. Like COP26, it's all good broad stu• but it depends on what happens next." The act, Smith says, is as seismic as the Environmental Protection Act was in 1990, which spawned laws and regulations for the next years. "We won't know a lot about what it will achieve until we know about the laws and regulations that might come out of this framework, and the time scales for them." Keeping sewage on the political agenda The new framework drew support from the MP in the political vanguard of the ˆ ght against sewage dumping, Philip Dunne. It was his Private Members' Bill that prompted those behind the Environment Bill to speciˆ - cally address the problem of CSOs. Dunne tells Utility Week he was pleased with the scrutiny his bill received because it is an issue that will not go away. "There will be a lot more focus on this issue because the public demands it," Dunne says. "It needs to get done and won't happen overnight, but the starting point is to understand what water companies are contributing to water pollution – they're not the only people who contribute but they are a big one." He says the monitoring and data require- ments included in the Environment Act will "It's time for ministers to take off the shackles and let water companies get on and close those raw sewage outlets, with a timetable and costings." Luke Pollard, shadow environment minister "It's time for ministers to take off the shackles and let water companies get on and close those raw sewage outlets, with a timetable and costings." , shadow environment minister be essential for the Environment Agency to e• ectively regulate wastewater companies. "We've been told by campaigners that water companies have been hiding behind poor provision of data since self-reporting began so a blind eye has been turned to poor behaviour," he says. As chair of the Environmental Audit Com- mittee (EAC), Dunne has recommended that the EA should be allocated more resources under the spending review to enable it to do its job properly. He says this will depend on DEFRA "looking favourably on letting the EA do its job properly and in compliance with the©law". The EAC is due to publish the results of its inquiry into water quality in rivers in the new year following evidence presented over a number of months that questioned how pollution in waterways had got so bad. Dunne says the SPS for Ofwat is "the absolutely key next step", which the secretary of state is due to publish in January for 2025-30." In the past, statements have encouraged Ofwat to focus on the supply side of water such as reducing leakage but this statement needs to say water companies must invest signiˆ cantly in the treatment side of their business," he says. "It can take years to get a project underway, but this needs to increase the focus of water company investment." The timescale for investment could mean the public, and crucially the environment, do not see the e• ects of improvements for many years and underlines the need for gov- ernment to set out its expectations. Pollard sees the refusal to set out a time- table as self-defeating. "DEFRA seems to think sewage will drop from the headlines now the Environment Act has passed … But their failure to get to grips with this prob- lem means the opposite will be true – pub- lic demand will only get stronger for bolder action and the pedestrian pace being o• ered by ministers is not only insuž cient, it will be politically impossible to defend." Ruth Williams, water correspondent

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