A mood for change

The current regulatory framework for water was developed to manage the industry's transition to privatisation. CIWEM's executive director, Nick Reeves, asks whether it can now cope with the challenges posed by climate change

When the Conservatives’ Quality of Life Policy Group, chaired by former environment minister John Gummer, was gathering evidence on the water industry, the timing couldn’t have been worse.

It was during the long dry summer of 2006 when water scarcity in the South-east of England led to domestic water restrictions and drought orders that sent the media and the Aga classes into a frenzy.

Giving evidence to Gummer’s team was tricky, and the water industry got a robust ride involving some forensic questioning. So, it was no surprise the Policy Group’s report, Blueprint for a Green Economy, published one year later, is making significant recommendations for change to the structure of the water sector.

This is fair enough but I urge you to read them, because I can’t make any sense of them at all. Chapter five of the report starts well and talks about integrated catchment management, joined-up regulation and the need for a sustainable water industry. But then it states: “Integrated water management cannot be provided while the responsibilities for regulating its interrelated components remain in different hands.” It talks of a new national water association that would bring together the functions of the Environment Agency and Ofwat, but would be neither a government agency nor an authority.

And this is where the report starts to get messy, because it’s not clear what kind of body the proposed association would be. And we’re presented with ideas for a sub-structure of bodies that looks very complicated and risky.

But rest assured, if David Cameron gets to Downing Street, the water industry – on the strength of the Gummer Report at least – is likely to see proposals for sweeping change.

But, if the water industry and its stakeholders are to become more sustainable, they need to think and operate differently. This would involve adopting a holistic and integrated catchment management-based approach with self-monitoring and balanced risks, just as the Gummer report suggests.

But, for this to work, a more mature relationship between the regulator and the water industry would be required. All parties would need to be committed to a common vision and values where the three pillars of sustainability (environment, economy and society) are given equal regard. The present barriers between regulator and regulated would need to be broken down to such an extent that they would hardly be visible and rarely spoken of.

The water industry is bedevilled by the tyranny of structures and frameworks, created at the time of privatisation. These were more or less right at the time, but are not now.

And they encourage economic priorities to conflict with environmental ones.

Speak to folk at the sharp end of the water business and they will tell you that the talk around office coffee machine is about systems and regimes that are no longer fit for purpose and that divide the essentially like-minded. It is only relatively recently that the economic regulators have begun to consider sustainability, and to acknowledge that meaningful debate about the economics of water supply cannot be had without acknowledging the environment and the wider social dimension.

But I do sense the mood for further change. Maybe this government is picking over the Gummer Report and we will soon see a more integrated approach to catchment management. After all, the UK is a different place to the one that heralded today’s water industry.

With water scarcity (in a country with 71 million souls by 2031) and growing demand for water, the need for a modern climate change adapted approach to water services has never been more timely or more urgent.

The water industry is, above all else, an environmental industry; a trusted guardian of that most precious of all natural resources. It can be, and ought to be, an environmental leader that the public could learn to love again, championing strategies for action on climate change and water waste.

We need a 21st century model of integrated regulation that probably isn’t regulation as we know it at all, and is all about closer collaboration and working better together. By the time of AMP5, the water industry and its regulators should have learned how to change public behaviour and understood that it is only through collaboration that we can achieve a genuinely sustainable water industry.

If the industry uses AMP4 to pilot catchment-based projects, AMP5 can be the springboard for a better way of working that will make a difference. If it does these things, the water industry will not only have a legitimate claim to the mantle of sustainability champion but a real claim on leadership in the war on climate change. It may also just avoid having change thrust upon it through legislation. But I doubt it.

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