The Department for Environment, Food & Rural Affairs has published a new policy papers setting out the Government’s plans for supporting long-term resilience in the water sector.

The Defra report is described as a roadmap which sets out how the policy framework will be enhanced during this Parliament to secure the long-term resilience of the water sector in dealing with pressures like climate change and a growing population.

The report is supported by the Environment Agency’s advice which covers the current and future resilience of the public water supply, power generation and agricultural sectors. The advice has also concluded that “a number of barriers appear to have limited any significant progress on resilience and strategic infrastructure since privatisation.”

Enabling resilience in the water sector considers both the public water supply and drainage in the context of understanding future needs, considering every option to meet future needs and recognising future needs in the regulatory and planning systems. It also looks at supply in the context of wider water use and boosting business resilience. Other issues covered include:

• A resilient regulatory system
• Promoting long-term planning and investment
• Promoting markets

Part 1 of the roadmap sets out how the Government will enable the water companies to enhance the resilience of the public water supply. For industries which take water directly from rivers or groundwater, Part 2 explains how these businesses will be supported to manage their resilience risks, including through closer collaboration with water companies. Part 3 sets out how water companies will be enabled to enhance the resilience of the sewerage network, while Part 4 sets out how the Government will work with Ofwat to enhance the sector’s resilience.

Government guidance aimed at triggering step change in water resources planning

The roadmap also says that the new guiding principles for companies to be published by the Government in spring 2016 on developing their water resources management plans will aim to trigger “a step change in how companies plan their water resources.”

The water companies will be expected to demonstrate consideration of every option to balance supply and demand, for example:

• collaboration with neighbouring companies, for example to trade or enable cascades of water or develop joint infrastructure/interconnections;
• collaboration with other sectors (e.g. energy, agriculture), for example to develop joint infrastructure, offer water services or procure water supplies.

The roadmap says that to meet the water scarcity challenge, the water industry may need to develop new water supply infrastructure that could be considered to be ‘nationally significant’, commenting:

“We are minded to develop a National Policy Statement which sets out the need for water supply infrastructure, and will announce whether we will do so by autumn 2016.”

The Environment Agency advice sets out information to support Defra in delivering the Water White Paper commitments related to assessing future needs for water resilience and associated strategic water infrastructure.

"Initial work shows that the benefit of enhancing water resilience is likely to exceed the cost"

The advice is based on a review of the available evidence across sectors which rely on water and encompasses the economic, social and environmental impacts which would result from compromised supplies. The review has focused on supply pressures associated with severe and extreme droughts.

The review of the evidence has concluded seven key findings:

1. Large parts of society, industry and commerce are currently exposed to the risk of emergency water restrictions (stand pipes, rota cuts etc.) at a likelihood in the order of 1% every year. The risk is often uncertain and is probably understated in some water company plans.
2. The consequence of emergency water restrictions has the potential for severe economic, societal, reputational and environmental impacts – particularly in large conurbations. One study estimated the monthly cost for London alone at £7 – 10 billion.
3. Initial work shows that the benefit of enhancing water resilience is likely to exceed the cost. Further work is required across sectors to understand better the cost-benefit ratio under a range of future scenarios, against a scale of resilience outcomes.
4. The planning processes to ensure suitable levels of resilience for public water supply are in place at a water company level, for example the water resources management planning process. A number of barriers appear to have limited any significant progress on resilience and strategic infrastructure since privatisation. There are also real or perceived regulatory barriers and limitations in customer support, affordability and planning across multiple companies. There are similar perceived concerns about barriers to collaborative planning with other sectors, although it is not clear whether this is due to barriers or lack of incentives.
5. While many individual businesses plan their future needs, there is no strategic sectoral planning for the risks associated with water for energy security, agriculture, industry, commerce and private water supplies reliant on direct abstractions.
6. Severe droughts would cause significant deterioration in the environment, partly due to continued or unplanned emergency abstraction.
7. There are a number of gaps in the evidence which could be addressed to assist resilience planning. These include a more detailed understanding of the multi-sector costs and benefits of increasing resilience.

Based on its assessment, the Environment Agency is advising Defra that a next phase of this work should be undertaken to provide a clear evidence base to support the planning processes for water. It would also set out the potential role for strategic infrastructure for multiple sectors.

Click here to download Enabling resilience in the water sector

Click here to download Water supply and resilience and infrastructure: Environment Agency advice to Defra