Environment Agency chair calls for a national water strategy and investment step-up

New Environment Agency (EA) chair, Alan Lovell, has called for a national water strategy as he gave evidence to the House of Lords Industry and Regulators Committee inquiry into Ofwat last week, alongside EA chief executive, Sir James Bevan.

Lovell said: “There needs to be a national water strategy, in my opinion. We are on the case with that, in conjunction with Defra and Ofwat. It is very important that that remains high on the government agenda. Certainly, coming into this job, it is one of the things that I regard as the most important to see.”

Topics and views from the session

Investment step up – Lovell said PR24 will be “critical” in enabling water resource investment to safeguard security of supply. While Ofwat has “properly been very focused on maintaining low water bills…there is general recognition that more investment is required”.

Outcomes based regulation – Lovell said the Agency is “highly motivated” to take an outcomes based approach. “There is some frustration at the amount of funding that is still restricted, and the way in which it is used is very closely prescribed. We think that we could do better on that. We shall certainly try to loosen those shackles to make better use of the money provided.”

Relationship with Ofwat

Sir James called this “pretty effective”.

How long water companies have known about wastewater failings

Asked whether a trade-off decision was explicitly taken in the past to leave overflows spilling on cost grounds, Sir James said that pre-monitoring: "I do not think anybody, not even the water companies, was aware of the scale of what was going on, because until a few years ago people had not really thought that it was an issue of particular importance.” Pressed on whether he agreed with former Ofwat chair Jonson Cox’s evidence “that the water companies did not in fact necessarily need monitors to know that something was badly wrong,”

Sir James commented: “I think it is conceivable that at least some of the leaderships of those companies were not aware, because there is always a risk of gaps between leaderships and front-line workers. It is quite hard to believe that some of the people working on the ground at some of the sewage treatment plants did not know that those plants were failing to meet the terms of their permits, but that is something that we will have to establish through our investigation.”

Water sector performance

“We have to be careful about making judgments about the whole sector, because some parts of it are very well run, and other parts are very badly run,” observed Sir James. “My experience is that organisations behave like their leaders, and that in an organisation—a regulator or a water company— where the leadership is clear that protecting the environment is just as important as providing public water supply, you get good behaviour. Where you do not get that clarity from leaders, you do not get that behaviour.”

Prison sentences for leaders of persistent polluters

Sir James said: “We have secured custodial sentences for waste criminals. I do not think that there is any particular reason why white-collar criminals should be treated any differently.”

On Tuesday 18 October, water company chief executives Sarah Bentley (Thames), Lawrence Gosden (Southern) and Peter Perry (Welsh) will give evidence to the committee. Watch HERE