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The coalition sounds right note on water

7 July 2010

The Society of British Water and Wastewater Industries (SBWWI) welcomes the broad objectives outlined in the new coalition government's ambitious ­programme, as set out in The Coalition: Our Programme for Government. The document sets out in clear and succinct terms the government's targets and ambitions. Drawing directly from both parties' manifestos, the programme has a far higher public profile than any other political and legislative agenda in recent memory. In macro-economic terms, the coalition is focusing on spending cuts rather than tax rises to shoulder the burden of deficit reduction. With a commitment to increase health spending in real terms, and political pressure to maintain education and defence spending, there is going to be enormous budgetary constraints on other departments. The Department for Environment, Food and Rural Affairs and the Environment Agency will not escape without significant cuts in their budgets, which in turn will have an impact on SBWWI members. Direct reference to the water industry is limited. There is a commitment to examine the conclusions of the Cave Review (competition and innovation in the water industry) and the Walker Review (charging for household water and sewerage services) and to "... reform the water industry to ensure more efficient use of water and the protection of poorer households"'. This approach is mirrored in the coalition's desire to take forward the Pitt Review to improve flood defences. SBWWI is hopeful that the aforementioned steps will be high on the new government's agenda and lead to issues such as regulation and the regulatory cycle, sustainable urban drainage systems and local authority involvement in surface water drainage, and responsibility for the drainage network being decisively addressed. Some SBWWI members may be disappointed that the programme does not include a clear commitment on the transfer of private sewers. The coalition, in its desire to achieve more efficient use of water, seems to indicate that it is in favour of domestic water metering. SBWWI is of the opinion that the public would be far more conservative - with a small "c" - in its use of water if people were aware of its true cost. Under the heading of climate change, the coalition states that it will establish a smart grid and roll out smart meters. Why not include water in this programme? It would provide government - through the water companies - with the ability to adopt flexible tariffs, which would both protect poorer households and constrain "luxury" consumption. Non-regulated water infrastructure investment, particularly relating to new housing and commercial and industrial developments, is a key source of revenue for SBWWI members. There is concern that there isn't a clearer focus in the coalition programme on a strategy to get Britain building again. Key Conservative themes such as making it easier for social tenants to own or part-own their homes, and making ­planning decisions and estate design more local and collaborative, are featured along with a pledge to review the "unfair" Housing Revenue Account. However, there is no headline pledge to build, for example, 200,000 new homes each year. Social housing is notable by its absence. Innovative small and medium-sized enterprises are a strong constituency amongst SBWWI's membership. They are also targeted by the coalition as one of the key drivers in getting the British economy moving again. There is an aspiration, for example, to award 25 per cent of government contracts to small and medium-sized enterprises, with all government tenders published online and free of charge. Influencing water industry procurement practices so that they are simpler, more transparent and less costly for SBWWI members and deliver better outcomes for water companies is a key objective for SBWWI in 2010/11. In summary, SBWWI welcomes the ambitious goals the coalition has set itself. We will continue to lobby government and contribute constructively to reviews and committee reports to ensure that the voice of the water industry supply chain is heard. Carol Hickman, executive director, SBWWI
Source: Disconnector

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