The Environment Agency has launched a new consultation on proposed changes to water quality permitting charges - the first time permit charges have been reviewed since 2018.

The proposed changes will significantly increase charge income for the Environment Agency (EA), allowing it to take tougher action on pollution. 

The EA said the increased funding will allow for more boots on the ground working to regulate water companies, as well as the advancement of digital and data capabilities to target efforts in the right places.

EA intends to increase the amount of front-line regulation

The environmental regulator intends to increase the amount of front-line regulation including:

• increase assurance and scrutiny of the water industry’s investment programme
• carrying out more evidence and intelligence led site-based audits and inspections of permitted water company assets and management systems
• collecting, assessing, and analysing monitoring data from water companies
• preparing for, responding to, and recovering from water company pollution incidents that have minor or minimal impact on the environment
• for more serious water pollution incidents costs will continue to be recovered directly through time and material mechanisms
• transform water industry regulation through using enhanced intelligence-led approaches to regulation and embedding best practice within industry
• integrate and develop better water quality environmental planning on a catchment basis
• develop the regulatory relationships with water companies to develop long-term compliance plans
• improve digital capacity and to enhance the ability to regulate the water industry in a modern and effective way
• accelerate the permitting process, modernise the permit stock and support innovation in catchment-based permitting

For water quality permits the EA is proposing to:

• increase permit application charges, including additional charges for habitats assessment
• increase most annual subsistence charges
• introduce new annual subsistence charges for permits held by sewerage undertakers operating the public sewerage system and treatment activities

The lengthy 56 page consultation document includes dozens of separately itemised price increases for discharges.

New subsistence charges for “discharges of sewage effluent by sewerage undertakers” will have greatest impact 

Water quality charges were last updated in 2018 and since then inflation rises have put pressure on the Environment Agency’s funding. Most existing permits are held by water companies - the sector will see the biggest proposed increase in charges. The proposed introduction of new subsistence charges for “discharges of sewage effluent by sewerage undertakers” will have the greatest impact on the water industry.

As part of the Storm Overflows Discharge Reduction Plan, the EA is seeking to further tighten conditions of permits to significantly restrict and reduce the number of spills from storm overflows to the environment. The Agency said it may refuse to issue a permit if it believes the applicant will not meet the requirements of the permit.

Customers from other sectors – including agriculture, recreation, and hospitality – will also see increases.

The Agency is seeking to recover the full cost of its services through the charges which have been reviewed to reflect changes in the cost of delivering the services, inflationary pressures and incorporating the cost of new services that will improve the way it regulates the water industry.

The consultation paper says that the cost to undertake the necessary water quality permitting and regulatory activities is greater than the fees currently being charged. As a result, the Agency is unable to:

• inspect and audit assets as frequently as it should
• make best use of the data available to target interventions
• drive innovation and performance
• carry out sufficient monitoring to understand and assess environmental impacts and risks

EA has increased regulatory duties under the Environment Act 2021

The paper also points out that the EA has increased regulatory duties under the Environment Act 2021 which has additional implications for how it regulates water companies, including:

• supporting the development and implementation of continuous water quality environmental monitoring and responding to regulatory needs highlighted by the data
• implementing and delivering the statutory Storm Overflows Discharge Reduction Plan to reduce discharges and adverse impacts
• requiring the Environment Agency and water companies to publish data on storm overflow operation on an annual basis
• supporting development of near real-time reporting of storm overflow performance and responding to operational needs highlighted by the data
• driving the delivery of the Drainage And Wastewater Management Plans
• increase funding to support asset management plans

Additional funding essential to achieve ambitions to deliver more regulatory inspections, smarter regulation and hit water quality targets 

According to the environmental regulator, additional funding will be essential to achieve ambitions to deliver more regulatory inspections, smarter regulation and hit targets to improve water quality.

The Agency comments in the paper:

“We recognise that this transformation in regulation will be significant and will take time to fully realise. The increase in our front-line regulation will be phased in over the course of two years as we recruit and train new officers. We plan to prioritise investment in data and digital services in this transitional period whilst an enhanced presence in front-line staff is being established. This will help us realise maximum benefits of an expanded and improved approach to regulation.”

The changes will see the creation of a more specialised workforce, including additional dedicated specialist officers, that focuses solely on water company regulation and better use of data intelligence to direct regulatory effort and decision making.

Deadline to submit comments on the proposals is 11.59pm on 11 March 2024. The changes to permitting are due to come into force in spring 2024.

Click here to download the consultation document Charge proposals for water quality permits

Click here to access the online consultation