HC Deb 13 November 2003 vol 413 cc457-64

Motion made, and Question proposed,That this House do now adjourn.—[Charlotte Atkins.]

3.3 pm

Mr. David Chidgey (Eastleigh)

I am grateful for the opportunity to raise a matter of great importance to my constituents in Eastleigh. I want to draw the Minister's attention to the plight of the many local residents from foul water flooding after heavy rain.

I appear to have about three and a half hours to entertain the Minister on this matter, and my file contains a great many complaints from constituents, received over a considerable time. However, he will be relived that I intend to stick to plan A, and be as concise as I can. He will therefore have considerable time to respond.

It has become all too common in the Eastleigh area that the foul sewers serving residential areas overflow after heavy rain. Gardens and homes are flooded with raw sewage, and lavatories become unusable because the drains are full. Southern Water turns up promptly to clear up the mess afterwards, and that is all very well, but gardens are ruined and homes take many months to recover. If the storm-water drains cannot cope and surface water flooding is involved, residents often end up having to haggle with the water company and their insurers to determine which is responsible for reimbursing them for the costs of the flood damage.

All too often, as I am sure that the Minister knows, residents who win a satisfactory result have to pay higher insurance premiums. In some cases, they cannot get their insurance renewed at all.

I shall set out the scale of the problem. Since the 1980s, there has been massive housing development in Eastleigh. Tens of thousands of homes have been built in the area, around what used to be villages. We welcome the regeneration of our communities that has resulted. In recent years, thousands more homes have been built in brownfield developments in the heart of the old Victorian town of Eastleigh. We welcome that too, but it is clear that the drainage and sewage treatment infrastructure has not kept pace with housing developments on greenfield sites around the villages or on the brownfield sites around the old town.

The Minister will know that water companies like to claim that the problem is that global warming has caused heavier rain, which overloads their systems. However, I doubt that that is entirely true. An analysis by Southern Water's experts of the Eastleigh drainage system shows that the town's sewerage system will not cope with the demands posed by the new housing. After some prodding by myself and others, the company has released the executive summary of a study currently under way of the effect that some 1,400 new houses will have. Those houses are being built on brownfield sites in central Eastleigh.

The study predicts that a storm of a severity that might occur only once a year—a so-called "one in one year" storm—will cause such an overload on the drainage system that at five points the sewers will overflow on to the highway, and therefore into people's homes. It also predicts that progressively worse flooding will happen as a result of even more intense but less frequent storm events—storms that might happen every 20 or 50 years, for instance. That shows that, without new investment to cater for housing development, residents can expect to suffer flooding at least once a year in five places in an area that is no larger than a square mile. More than half of the new development has already been built.

Bad though the situation is, that is only half the problem. Sewage from the Eastleigh area is pumped directly into the Chickenhall waste water treatment works, located beside the River Itchen. The Minister will know of that river if he is a fisherman, and of the fine opportunities that it allows for sports fishing on inland water. He will know too that the river is the subject of a sustainability management project, and that an application has been made for EU designation as a special area of conservation. That designation would recognise the river's importance as a special environmental resource.

Interestingly, Southern Water—like other water companies in a similar position#x2014;licensed by the Environment Agency to discharge partially treated effluent into the River Itchen through a storm-water overflow from its sewage treatment works. Because of the increase in flooding incidents over recent years and those projected for the future, the water company proposes to bring the storm-water overflow into full use, which will inevitably mean more partially treated effluent flowing into the Itchen. Only a few miles downstream, at Gaters Mill, is Portsmouth Water's water-extraction plant. While the people of Portsmouth may not take kindly to the thought of drinking from Eastleigh's effluent, it is a fact that the treatment at the extraction plant renders the water safe. However, what about that long stretch of river between the sewage treatment works and the extraction plant? What will be the impact of increasing the flow of partially treated effluent on the salmon spawning-grounds in the river, on the watercress beds and on the youngsters who use the water sports activity centre provided by the county council? Surely, planning to increase the discharge of waste-water floods into the Itchen flies in the face of attempts to create a special area of conservation free from pollution. We are suffering from a fundamental failure to ensure that our sewage and waste-water treatment systems have kept and do keep pace with demand, particularly in the area that I represent.

It is important to recall that one of the great achievements in urbanisation in the 19th century was the building of water supply, drainage and treatment systems to serve the swelling populations of our towns and cities. Killer diseases, such as typhoid, were eradicated. Not for nothing did public health engineering become a highly respected profession. It is a sad reflection that all too often in the case of sewers, it is out of sight, out of mind. We are now painfully aware that following decades of underinvestment in the repair and maintenance of our main drainage systems we are left with literally thousands of miles of crumbling, failing sewers. What a way to treat such a valuable legacy left to us by our forefathers.

How can it be that in the 21st century my constituents are faced with the fear of foul sewage flooding their properties on a regular basis—not because of some rare, exceptional weather occurring perhaps once in every 50 years or so, but every year and every time we get heavy rain? How can it be that while Eastleigh borough council is making every effort to provide affordable homes on brownfield sites in line with Government policy, trying to address the needs of some 10,000 people seeking homes, our water company is wringing its hands over the lack of funds that are needed to expand its sewerage and treatment systems to meet the extra demands? How can it be that its existing sewerage and treatment system is so overloaded that the only recourse is to discharge partially treated effluent into a river that is recognised as being so important to the environment that it should have special protection from pollution?

I fear that the residents of Eastleigh are not alone in their predicament. This pattern of failure is repeated across the country. One has merely to look at the statistics from Ofwat, from the Department for Environment, Food and Rural Affairs and from Environmental Data Services to confirm that our water and sewerage companies are buckling under the strain of obsolete and failing infrastructure, increased demand from new development and inadequate streams of essential investment. Clearly, there needs to be a full inquiry into how we regulate, manage and resource the water and drainage industry. We need to look at the roles of local authorities, the Environment Agency and Ofwat and we need to see some joined-up government to ensure that the industry is working in the best interests of the community, the environment and, more important, the customer—my residents.

We need to ensure that local authorities and water and sewerage companies are fully in the loop where planning applications impact on the demand for drainage. At present the system is that local authorities have recourse to the Environment Agency as a statutory consultee in the process. Surely there is a powerful case for water and sewerage companies to be made statutory authorities under planning regulations. That would end the practice of all too many companies who do not or, even worse, will not reply to planning application notices, leaving local authorities to make decisions in the dark and without expert guidance. We need a statutory consultation process with teeth, not just a rubber-stamp exercise—local authorities constantly complain to me about that—with regulations that place obligations and accountability on the consultees.

We need to address the powers of the Environment Agency in controlling pollution. Just this week Southern Water—I mention it not because of any particular campaign against it, but because it is the company that serves my area was found guilty of pumping raw sewage into the Solent. The Minister will know that the Solent is an area of international environmental importance. It is nothing short of an outrage that such an area of water should be subject to such pollution, yet the fine was a mere £5,000. In 2001 the water company is on the record as coming second in the league table of the worst water company polluters in this country, yet its total fines for this year amount to a mere £64,500. That is hardly even an incidental running cost to a company with a turnover which last year was in excess of £436 million. Clearly, there is a powerful case for reviewing the regulation of the industry with regard to investment priorities.

For far too long maintenance and renewal of sewerage systems has been the poor relation in the industry. I am pleased that Ofwat is now expressing concerns which, I believe, the Government share, about the lack of investment in this area. It is clear that water companies have put the interests of shareholders first. That is not just a knee-jerk reaction such as we so often hear in relation to privatised companies. Ofwat's report for 2002–03 on the financial performance and expenditure of the water companies states: In 2002–2003, dividend cover fell as a result of a higher level of dividends despite lower operating profit. We recognise that investor confidence must be maintained but the level of dividends also needs to be sustainable over the long term. Dividends from regulated business should reflect the cost of capital and distribution to shareholders of a proper portion of the benefits of greater efficiency".

That leads us directly to the nub of the issue. Ofwat is calling for greater investment in tackling crumbling and failing sewage and waste-water treatment plant. Water companies have failed to make efficiency gains necessary to maintain profits, but have nevertheless maintained their dividends to shareholders. As a result, investment that should have been made in sewage and waste-water treatment has not happened. Having got Ofwat, their customers and my constituents over a barrel, the water companies have the audacity to raise charges by more than a third to meet their obligations. In Eastleigh my constituents face a price hike of 35 per cent.—the highest in the country.

Eastleigh borough council wrote a letter to Ofwat regarding investment priorities. It concerns asset management planning 4. The first recommendation in the submission is: That the funding currently being used to improve beach quality be diverted to improving the capacity of sewerage works. This would prevent blockages of the system caused by backing up and improve River Quality. The point about that is that the total package we are looking for, which would include improvements to our sewage treatment works to introduce techniques to remove nitrates and other chemicals, should not cause a cost increase, as we are told almost daily that beach quality is now up to standard in almost every area. Why, then, are we putting money into that area when we could be putting it into improving the sewerage system?

The council's second point is that much of the infrastructure serving Eastleigh is reaching the end of its design life or has already passed it. However, technologies are available that could be used to seal the leaking pipes with minimal disruption. The council submits that significant expenditure is necessary to upgrade all existing substandard pipework. Where is the money to come from? It is suggested that the £2.2 billion underspend in asset management plan 3 of all water companies, including Southern Water, could be transferred to enable those works to be carried out.

Like the council in its submission to Ofwat, we note that Southern Water proposes to increase its water bills by 35.1 per cent. during the AMP period and that such an increase is excessive, especially as in Eastleigh alone there have been two major sewer failures this year; gardens and homes were flooded with sewage and main roads were closed. That was the result of serious underfunding of the infrastructure during the past 20 years. Those are the views of my local borough council and I thoroughly endorse them.

To draw the attention of the House to the predicament suffered by so many people, I focus on the case of Mr. Alf Bushell, which was featured on Saturday in our local paper, The Southern Daily Echo,under the banner headline, "Veteran's Loo Trek Misery". Alf is an 81-year-old war veteran, a former Royal Marine who helped to shoot down enemy aircraft during the second world war and whose ship sank off the coast of Italy. This man should be treated with respect and dignity, but whenever it rains he has to walk 15 minutes to the nearest public convenience—whatever the weather—because his lavatory becomes blocked. Is it right that Alf and dozens of his neighbours in Consort road, my constituents, should suffer indignities that more correctly belong in the middle ages? I look forward to the Minister's response.

3.22 pm
The Minister for the Environment (Mr. Elliot Morley)

I congratulate the hon. Member for Eastleigh (Mr. Chidgey) on obtaining this debate and on outlining such a thorough and comprehensive case. He has genuine concern about those complex problems and I express my sympathy with those of his constituents who have been affected, especially Mr. Bushell and his neighbours. The hon. Gentleman has raised several helpful points and I am pleased to be able to address them in some detail.

Flooding problems are all too familiar and many hon. Members, including me, have constituents who have suffered. We know very well of the misery that such problems can cause. The Government are anxious that the problems should be addressed and I shall try to respond as positively as I can.

Sewer flooding and the protection of the environment from waste water discharges from sewage treatment works and sewerage systems are a key concern for the Department for Environment, Food and Rural Affairs. In tackling those issues we need to take into account such things as statutory obligations under European directives on waste water treatments and habitats—I listened carefully to the hon. Gentleman's comments about the Itchen. We also have domestic obligations in respect of sites of special scientific interest. Sewerage companies and regulators should, and generally do, take those obligations seriously.

The hon. Gentleman described the particular problems in Eastleigh and I shall address those before setting out the Government's general response to some of the other issues that he raised. My understanding is that a substantial contribution to the problems in Eastleigh is the fact that the pumping station at Bishopstoke and the Chickenhall sewage treatment works are unable to cope with both foul water and rainwater during especially heavy rainfall. That is the root of the problem. The hon. Gentleman is right to point out that, although increased heavy rainfall contributes to the problem, there is a range of other issues. I do not dispute that.

The facilities at Chickenhall include tanks to store storm water until the increased flows subside. However, the tanks do not have sufficient capacity to contain storm water during severe weather conditions and that has led to occasional flooding of adjacent land and properties. Addressing that problem will also limit pollution of the River Itchen and could prevent flooding of upstream properties by restricting flows to the works. For those reasons, I am glad to be able to tell the hon. Gentleman that I understand that, by 31 March 2005, Southern Water plans to install additional storm water storage capacity at the Chickenhall works. Furthermore, the company proposes to change the storm water management arrangements at the works.

Those proposals—if they go ahead—will allow excess storm water to be discharged directly into the river when the storage tanks are full, instead of flooding the surrounding area. Any discharges from the existing outfall, which are only consented to by the Environment Agency during heavy rainfall events, will contain screened foul water highly diluted by rainwater. No proposal has been made, or would be considered by the Environment Agency, for the construction of a new raw sewage outfall at the works. That would not be approved.

Mr. Chidgey

I concur with the Minister: there is no question that raw untreated sewage will go into the river. However, as he knows, there are three stages in sewage effluent treatment. We do not have tertiary treatment, although the sewage is treated to ensure the removal of bacteria. I am worried that although we may be meeting the standards downstream at Gaters Mill, where there are excellent treatment works to make the water potable, we do not have the protection that I want in the river itself–between the sewage works and the water extraction treatment works. The area is supposed to have improved protection from pollution due to its environmental importance, so I am worried to hear the Minister say that Southern Water's management plan is to increase, at times, the flow of partially treated effluent into the river.

Mr. Morley

I very much hope that will be an interim measure. In addition to the work to improve the storm-water handling capacity—in essence, at peak times—I expect the company to provide more stringent treatment standards by 31 December 2005. The hon. Gentleman is right to note that there is only secondary treatment, but the proposal is that standards should be tightened up.

Tighter standards are required to take account of population growth in the area and to protect good water quality in the River Itchen. I expect improvements at the treatment works. A range of new technologies is becoming available, which will considerably improve discharge quality. They are currently under consideration by all water companies, and I hope that Southern Water will look into them.

I shall touch briefly on the general principle of sewer flooding, as the hon. Gentleman is right about its prevalence. Last autumn, Ofwat asked sewerage companies to consider further measures to tackle sewer flooding. It specifically asked companies to prioritise sewer flooding alleviation projects primarily on an assessment of the severity and frequency of the problem, not simply on the cost. Companies were also asked to include the worst cases of external flooding in addition to internal flooding.

We expect that additional investment by companies before 2005 will be considered by Ofwat, as part of the logging-up process, and I understand that Southern Water has agreed to spend an additional £10 million on major flood alleviation schemes in the period up to 2005. In the longer term, as part of the current price control regime, to which the hon. Gentleman referred, Ofwat asked sewerage companies to include a prioritised list of projects and costs in their business plans for 2005–10. Companies could include costed proposals to extend or improve their sewerage network.

I understand the pertinent points that the hon. Gentleman made about the level of investment and dividend, efficiency savings and costs to consumers. Southern Water's draft business plan suggested a 35 per cent. increase, but that was the initial business plan. The regulator will put those plans under rigorous scrutiny. I am sure that all the assumptions and bids will be carefully scrutinised. I want to see continued improvement, but I do not want the cost simply to be passed on to consumers. Efficiency gains, company profits and long-term investment programmes must be considered. We would expect the regulator to look at all those issues, and I have every confidence that the regulator will do so.

My Department's role in the review is to make clear to companies, regulators, customers and investors the Government's views on such issues, as well as the maintenance and renewal of sewerage assets. In the initial guidance that the Secretary of State issued to the director general of water services in January, it was made clear that sewerage undertakers' assets should be maintained in a way that will deliver a high standard of serviceability to customers and the environment and that, within the priorities of water company programmes, there needs to be an increase in the rate at which companies rectify sewer flooding problems if they are to get on top of the situation. That guidance has been given to the regulator. We want to ensure that sewer flooding and sewer repair and maintenance continue to be high on the agenda of both Ofwat and the companies.

As part of the current stage of the price review, we are considering issues that should be included in the final periodic review guidance to Ofwat, which will be published in January. That ministerial guidance relates to the kind of priorities that we want to see. I can assure the hon. Gentleman that all the issues that he has raised, including costs, will certainly be taken into consideration as we prepare that guidance.

Mr. Chidgey

I can see that the Minister is getting to the end of his response, so I want to intervene quickly. One of the issues that he has perhaps not been able to address so far is that of local authorities being in the loop with water companies as statutory consultees. I mentioned that in my remarks. Could he perhaps give me some guidance on what is proposed in that respect?

Mr. Morley

I am happy to do so. Those are important issues, and we are considering that point. It is true to say that water companies are not currently statutory consultees in the planning process. I agree that, in relation to further housing development in Eastleigh, it is important for Southern Water to be involved in the process to understand the projections, so that it can consider the implications for its infrastructure. We have addressed that to a very large extent.

Planning guidance, which is issued by the Office of the Deputy Prime Minister, makes it clear to planning authorities that they need to work closely and at an early stage with water and sewerage undertakers, so that new water supply and disposal infrastructure is timed to coincide with the development that it serves so that, if expansion in needed, the plans for that investment can be put in place. Of course, that is the point of structure plans and district plans, which are publicly available so that everyone who has an interest can be aware of what is planned for the long term.

I understand that there is no evidence to suggest that those non-statutory arrangements are inadequate. My information is that Southern Water is often consulted on planning authorities by the local authorities and that it is happy to offer guidance and advice, so it feels very much involved. Of course, if it were felt that the current arrangements, which are based on planning policy guidance, were not satisfactory, we might want to consider that in the future.

Mr. Chidgey

To provide a little more information, it is correct that discussions between Southern Water and Eastleigh borough council are good at present, but that is as a result of several years of frustration. I make the point again that planning officers in the borough council have had to suffer the frustration of asking for comment from the water company on large-scale planning applications coming through their office, and have had the sorry situation of not getting a response at all. That is the issue—is compulsion necessary? Does a statutory obligation need to be placed on the water companies so that they are part of this planning process?

Mr. Morley

The simple answer to that, if the situation is working, is no. If the situation is not working, however, we may have to look at other measures.

On the hon. Gentleman's final comment about fines in relation to pollution, I recognise that that is an issue. He will know that fines are a matter for the courts, and they often depend on the circumstances in relation to the particular advice. The issue is often raised with the Department, and I will certainly bear his comments in mind.

I have a great deal of sympathy with the hon. Gentleman's case. Southern Water has given undertakings that proposed improvements are to be made, which I hope will deal with some of the problems. In the longer term, on the price review, we expect water companies to put in place proper long-term plans to deal with the issue of sewer flooding, which will be part of the ministerial guidance. I repeat to him that that final guidance will go out in January. We are in the process of compiling it, and I will take seriously the comments that he has made.

Question put and agreed to.

Adjourned accordingly at twenty-four minutes to Four o 'clock.