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  • by Karma Loveday

Green coalition urges Ofwat to target more environment money on nature-based schemes

Water body policy campaign group, the Blueprint for Water coalition, has called on Ofwat to focus more Water industry national environment programme (WINEP) investment on catchment and nature-based solutions (CNBS) in AMP8.

It has called on the regulator to set an "aspirational" target to direct 10% of WINEP investment into CNBS and to indicate willingness to seek exemptions to legislative drivers that can act as a drag on innovation.

The call came in a letter from the coalition chair, Ali Morse, and vice chair, Nik Perepelov, to Ofwat chief executive, David Black, asking the regulator to act to support the mainstreaming of CNBS. Blueprint argued that not only would such solutions support nature recovery but they would support reputation rehabilitation. “We urge the sector to get on the front foot and deliver visible, nature-positive assets that the public can be proud of,” the chairs said. Even record investment at PR24 “is not likely to address deep and widespread public concerns about the sector,” they continued, if a “status quo AMP8” is pursued.

Also in the letter, Blueprint called on Ofwat to write to companies setting out its expectations and referencing emerging best practice in relation to business plan ambition.

And, where timescales prevent detailed proposals for CNBS being made, it urged Ofwat to encourage companies to commit to outcomes rather than narrow outputs in their plans, and ensure the revenue risk is no greater from doing so. It illustrated this:

“Appropriately worded Price Control Deliverables should be readily capable of allowing companies to defer decisions in the WINEP on specific WwTW upgrades in favour of analysing opportunities for achieving equivalent P reductions in the wider catchment where economic to do so, bundling together other nutrient reduction drivers such as Environment Act targets. Working with EA, Ofwat and the water companies can develop innovative approaches to permitting to ensure that such solutions comply with the effect of the narrow legal requirements set out in the Levelling Up and Regeneration Bill, seeking derogations as necessary.”

Elsewhere it pressed Ofway to ramp up expectations of voluntary benefit sharing. It said there will be a massive expansion of RCV by the end of AMP8.

“This is a policy windfall. Investors in the sector benefit from inflation adjusted returns which are particularly generous in the current period of high inflation. Given the deep reputational crisis that the sector is facing, Ofwat should be encouraging companies to go beyond their appointed business activities and share the benefits of this massive expansion with customers, particularly in addressing short-comings of the statutory targets they are delivering. For example, many coastal storm overflows are excluded from the statutory target despite high public expectation for and value in clean beaches, even where statutory bathing water status doesn’t apply.”

Morse and Perepelov thanked Ofwat for its engagement with the NGO community and moves already taken in the PR24 methodology to help level the playing field for CNBS. But they cautioned that emerging information from the companies suggests “a strong bias in favour of traditional engineered solutions at the expense of CNBS”.

Furthermore: "Given the overwhelming political and public focus on sewage and drainage issues, we are also concerned that critical issues relating to abstraction, resources and ‘softer’ WINEP drivers will be crowded out.


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