New draft Water Bill gets tough with water companies

The draft Water Bill, published for consultation on 6 November, has been heralded by Environment Minister Michael Meacher as putting “the interests of customers and the environment first”. It provides for:

• fines in Magistrate’s Courts of up to £20,000 for water companies supplying water unfit for human consumption- unlimited fines are already possible in Crown Courts;
• fines by regulators of up to 10% of their turnover for companies breaching their condition of appointment;
• a new statutory duty on water companies to conserve water;
• a licensing system that prevents over abstraction which damages wildlife and the environment;
• making all water companies maintain up-to-date drought plans;
• a new independent Consumer Council for Water;
• a new duty on the Water Regulator to protect consumer interests;
• the publication of links between water company Directors’ pay and company performance.

The Government said that options are being examined for increasing competition in the light of “recent industry developments” and the responses to the public consultation earlier this year

(see related story), and confirmed that a full statement would be made early next year.

The provisions in the new Bill fall into three main categories; abstraction and impounding, new regulatory arrangements and ‘a number of useful and uncontroversial improvements to the regulatory system’.

The Bill seeks to overhaul abstraction licensing, including measures to prevent over-abstraction at sites designated under the 1992 EU Habitats Directive and 1979 Wild Birds Directive, some of which have been identified as ‘at risk of damage’ by English Nature and the Anglo-Welsh Environment Agency. Regulatory controls will also be extended to currently exempt rivers on the England/Scotland border. The new system will remove the need for an estimated 20,000 of the 48,000 abstraction licences, the majority of which are held by small businesses, especially farmers. Costs for implementing the new system are to be met through abstraction charges, shared between licence holders.

Under ‘new regulatory arrangements’, the Consumer Council for Water will act as a “more independent watchdog of the consumer to improve customer services and environmental factors”, a Department of the Environmentment Transport and the Regions (DETR) spokesperson told edie. The costs of this are estimated to be “a modest increase” in the current £3 million spent on existing Customer Service Committees, and are to be shared between water companies through increasing their licence fees.

Under the heading ‘a number of useful and uncontroversial improvements to the regulatory system’, the Government is consulting on a requirement for water companies to provide their customers with reliable information on company performance. Provisions on contaminated land are expected to bring benefits to some landowners, as “the change will avoid blighting land by designating it as contaminated in cases where it poses little or no risk”.

Clauses on the transfer of discharge consents, changes to the trade effluent regime, flood defence, information on water company performance and water resale have not yet been drafted, but are being consulted on as part of the current exercise. The DETR intends to add these to the Bill before it is introduced.

“Following the 1997 Water Summit, we agreed a ten point plan to cut leakage and improve water management. Water companies have reduced leakage levels by over 30% since 1997. This draft Bill will complete our commitments made at the Summit and spearhead our drive to deliver a high quality water industry for the 21st century”, the Environment Minister commented. “We also intend to make sure that in future fines can match the seriousness of any offences.”

“I welcome the proposal to create a new consumer objective for water”, Director General of Water Services at Ofwat, Philip Fletcher, said. “This will make it clear that protecting consumers’ interests, including the promotion of effective competition, wherever appropriate, is a key part of my duty.”

Comments on the draft Bill should be sent before 31 January 2001 to Claire Jenkins at draftwaterbill_consultation@detr.gsi.gov.uk