Water Supplies (Hansard, 1 May 1996)

Lord Lucas

The Environment Agency's report,Review of Water Company Plans to Safeguard Summer Water Supplies, underlines the exceptional lack of rainfall and consequent impact on water resources in many parts of the country during the past 12 months. It confirms the extent of the measures which the water companies are taking to maintain supplies even if this summer is as dry as last. Over £400 million of capital expenditure has been announced in England and 148WA Wales—investment which will be financed without increasing prices to consumers.

The Environment Agency's assessment is that the companies are taking appropriate measures; and that, despite the present level of many reservoirs and aquifers, these measures should be sufficient to enable essential supplies to be maintained in all areas even through a hot, dry summer. But there is no room for complacency and, should dry weather continue into the autumn, further measures could be required.

On 1st September last year, my right honourable friend the Secretary of State for the Environment announced that he was putting in hand with the agency, the Director General of Water Services and representatives of the water companies a review of water resources and water supply in the longer term. This work is continuing and we expect to publish a report later in the summer.

Provided, that the costs of supply are met, the environment is properly protected, and waste is avoided, the aim should be to provide consumers with the water they want. Within the framework of sustainable development, it will however be necessary to make sometimes difficult choices about the extent to which supply should be guaranteed in extreme droughts for inessential as well as for essential purposes. These are matters on which there is a need for dialogue between companies and their customers, in the light of the costs and benefits of different levels of security of supply.

The work on the review so far suggests that the basic framework for making water resource and supply decisions is sound, and the water companies, the Office of Water Services (OFWAT), and the Environment Agency, with the involvement of the Government where necessary, should be able to reach satisfactory decisions on the management of existing resources and the provision of new resources where needed. In planning and managing water resources and supply, particular attention needs to be given to the following points:

changing pattern and structure of demand for water use; it is essential that present and likely future requirements should be better understood.

appropriate use should be made of the scope for influencing demand for water through tariff structures and selective metering. The high costs of meeting some water uses, particularly at times of peak demand, should be met directly and fully by those who make use of the water. It should be possible to do this without impacting on charges to meet basic household needs—whereas under present charging arrangements the costs of meeting peak demands are averaged across all consumers.

water supply systems must be managed efficiently and economically. In particular, in the interests of customers and the environment, leakage levels should be reduced as rapidly as possible to economic levels. Methods of estimating leakage 149WA should be fully applied and improved. OFWAT has been discussing leakage reduction programmes with companies and will be publishing information on this shortly.

increased efficiency in the use of water should continue to be sought. Immediate responsibility for this lies with domestic and industrial consumers, and manufacturers of domestic equipment. The Environment Act 1995 gave water companies a new duty to promote efficient water use by consumers, and the Director General of Water Services new powers to supervise the use of the duty; further information on the subject will be published shortly.

in the light of these factors and in consultation with the Environment Agency, water companies need to review urgently and comprehensively, if they are not already doing so, the reliable yields of each water resource system, with a view to establishing their adequacy and whether additional resources will be needed to meet properly-managed demand. These reviews should take account of the likely impact of climate change so far as it can be predicted. In some locations, new resources may well be needed and plans should be made to provide them in an environmentally satisfactory manner.

The report will in particular seek to identify the issues on which further work is needed, the timetables for completing it, and who should be responsible for carrying each matter forward.

The Director General proposes to put to my right honourable friend shortly proposals for changes in arrangements for compensation of consumers for failures of supply.