HL Deb 17 December 1987 vol 491 cc911-4WA
Baroness Macleod of Borve

asked Her Majesty's Government:

Whether they are in a position to announce their conclusions on the policy and consultation paper on the National Rivers Authority which was published in July.

Lord Belstead

There were nearly 350 responses to the Government's consultation paper from a wide range of organisations and environmenal interests. The proposal to create a National Rivers Authority to take over water authorities' regulatory and river basin management functions after privatisation of their main functions was widely welcomed.

My right honourable friend the Secretary of State today placed in the Library of both Houses copies of the responses of those who agreed that their responses could be published, together with a memorandum which sets out the Government's decisions on the issues raised in the consultation paper.

The memorandum reaffirms our commitment to the creation of a National Rivers Authority. We consider it essential that the regulatory functions of the water authorities remain in the public sector, together with the broader range of river functions. These functions—water resource planning and control, land drainage and flood protection, the protection of the water environment and the improvement and development of fisheries, and navigation, where it applies—must be the responsibility of a public body, answerable to Ministers and to Parliament.

The National Rivers Authority will have full statutory responsibility for these functions, including responsibility for operational work. The Government do not consider it appropriate for the NRA's role to be limited to a purely regulatory or auditing role. However, it is not necessary for all the operational work associated with the NRA's functions to be carried out by the NRA's own employees. The Government anticipate that a significant amount of work will be contracted out by the NRA on the basis of fully competitive contracts. The NRA will be required to ensure that as much of its work as possible is done on the basis of competitive tendering. The basis of the contracts for such work will have to take full account of the market conditions and the nature of the work. It will be open to the privatised utility companies to compete for such work, but it would not be acceptable for the NRA to be dependent on the privatised utility companies for the carrying out of such work as part of their conditions of appointment or licence, though, in the short term, special transitional arrangements between the NRA and the privatised utility companies may be required in some areas in respect of some functions.

The NRA will be separate from the Director-General of Water Services, and will be a non-departmental public body, with a board of up to 12 members. The chairman and eight members will be appointed by my right honourable friend the Secretary of State; two by my right honourable friend the Minister of Agriculture, Fisheries and Food, and one by my right honourable friend the Secretary of State for Wales. Details of the organisation and the arrangements for the representation of regional interests are outlined in the memorandum.

The NRA will be constituted immediately after the main legislation to allow for the privatisation of the water authorities has received Royal Assent. Before then, substantial preparations are needed within each water authority. The Public Utility Transfers and Water Charges Bill, currently before Parliament, will give water authorities express powers to prepare themselves for privatisation and restructuring. My right honourable friend the Secretary of State is asking each water authority to prepare proposals for a scheme of organisation on the basis of guidelines which will be issued by the department and to submit them to him within a month of Royal Assent to the Public Utility Transfers and Water Charges Bill.

In order to advise on each authority's proposals for reorganisation, my right honourable friends and right honourable friend the Secretary of State propose to appoint an advisory committee, to be called the National Rivers Authority Advisory Committee. The terms of reference are to advise us on the implications for the water authorities of the reorganisation needed to provide a separate organisational structure for their water and sewerage functions, and the functions that will be performed by the new National Rivers Authority; to advise on the acceptability of the scheme proposed by each water authority; and to ensure that it will enable the NRA adequately to fulfil the tasks proposed to be allocated to it. My right honourable friend the Secretary of State will make a further announcement about the chairman and other members of this committee as soon as possible.

We are confident that these arrangements will enable water authorities to start soon on the necessary preparations for privatisation and restructuring so as to provide for the successful transfer to the private sector of the vast majority of the jobs in the water industry, together with the transfer of the regulatory and river basin management functions of water authorities in an important new national authority in the public sector.