Ofwat has launched a new consultation on environmental incentives aimed at supporting water efficiency and more sustainable drainage across all types of new development to achieve sustainable new homes.
Image source: Ofwat consultation paper Environmental incentives to support sustainable new homes
Introducing the consultation, Ofwat said many water companies already offer developers discounts on their new connection charges for meeting certain standards of water efficiency or sustainable drainage.
The regulator is now consulting on establishing a common framework for environmental incentives through changes to its charging rules. According to Ofwat, for environmental incentives to be effective, they should:
- be transparent;
- be stable and fair;
- support innovation;
- be accessible to all;
- complement wider policy;
- build trust and confidence.
The consultation paper says that a common framework for all water companies could influence developer behaviour more effectively, particularly with developers operating on a regional or national basis. According to Ofwat, they would be able to see the benefits of building more sustainable homes more easily and be able to adopt a standard approach to home building irrespective of which company's area they operate in, potentially improving their own efficiency and reducing costs.
In addition, a common framework would also establish a basis and approach for new appointees to be compensated, for example, for investment and ongoing maintenance of development-level water recycling arrangements.
Ofwat said it will also be proposing other changes to new connection charging rules for English companies in a separate consultation during 2023, including some revisions to arrangements for infrastructure charges and charges to fund environmental incentives. The focus of the consultation will be to ensure that, where competition for developer services remains weak, developers are sufficiently protected.
Closing date to submit responses to the consultation is 1 August 2023 – click here to download the consultation document.
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