Policy advisor, the National Infrastructure Commission (NIC), has warned that the government has undermined the effectiveness of water and other utility regulation through inadequate strategic direction.
Speaking at the launch of its latest Progress Review report, NIC chair Sir John Armitt said the government has “not consistently set clear strategic direction for regulators” and that it was “yet to review regulators’ wider duties to ensure they are coherent and effectively balanced”.
Armitt went on: “For the regulatory system to support policy objectives, strategic direction from government
is needed through regular Strategic Policy Statements for each sector. At a time when the water and energy sectors need transformational change, rather than marginal efficiency improvements, regular Strategic Policy Statements provide clarity on the need to prioritise investment.”
He described “significant deficiencies” in UK infrastructure which he said were “holding back productivity and impacting quality of life” and numbered among them, “the failure to build major water resource reservoirs in England in the last 30 years.”
He said the the current planing regime “constrains the roll out of infrastructure at the pace that is
required” with average planning times that have “increased significantly” over the past ten years.
On water resources, he reiterated earlier NIC recommendations that “government and Ofwat should ensure plans are in place to increase supply and reduce demand by at least 4,800Ml a day by 2050,” along with “at least 1,300Ml a day provided by the 2030s through additional strategic water transfers and additional supply infrastructure.” Action to deliver this “twin track approach” he said should include “the water industry maintaining its objective to halve leakage from 2017 levels by 2050.”
Responding to a suggestion that the emphasis on reservoir construction might need to be stepped up given figures in the NIC progress report that showed reduction in demand as stalled and leakage reduction currently at 33% off the pace needed to hit the industry’s 2050 target, Armitt said: “That requires the planning process to be compatible with delivering that long-term infrastructure. And it requires the government to acknowledge that this is important and to be seen to be supporting it in terms of its policy statements.” He added: “I think we have seen in fact a bit of a shift in the last two or three years in that the Environment Agency recognises that this is a part of the solution.”
On demand reduction, he said “a big information programme is needed to help people with that. And we need to continue to focus on the opportunities for for metering.”
He returned to earlier NIC advice that water companies should be able to “implement compulsory metered charging beyond water stressed areas by 2025, by amending regulations as appropriate…in a concerted
campaign to reduce water demand.”
He pointed out that average water bills in England were, in real terms, “still lower than they were almost two decades ago… Despite lower bills, water supply has become more reliable.”
He went on: “The UK was one of only six countries to receive the maximum score in a 2022 global index measuring drinking water safety.”
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