Today’s publication of the Government’s Water White Paper has generated a wide range of initial comments – some welcoming the overall approach, while others have expressed concern about its implications.

Water UK, the body that represents all the UK water and wastewater companies at national and EU level, has refrained from making any detailed initial comment. It said it was pleased that the White Paper “recognises that ours is a successful industry”. However, the voice of the water companies said that the Paper had proposed some far-reaching changes which its members would need to consider carefully.

The CBI said that in a difficult economic climate, and given the scale of investment needed in the UK’s water infrastructure to ensure it is resilient and fit for purpose, it was critical that policy makers and regulators maintained certainty for investors. The employers’ organisation said that while the paper had sought to maintain investor certainty, its implications were “bigger than the sum of its parts.”

“Thorough consultation with industry will be needed to ensure no unintended consequences emerge that could impact on the UK’s competitiveness.”

"Paper signals substantial shake-up"

Leading professional services consultancy PricewaterhouseCoopers said the paper signalled a substantial shake-up of the sector over the medium term. However, Richard Laikin, UK Water Sector Leader, PwC, said that both the water  companies and investors alike would welcome the government's rejection of forced legal separation of the water companies' activities - an idea mooted by the Cave Review.

Richard Laikin commented:

“As a consequence of these moves, there will likely be a trend towards increased consolidation in the sector, for example the smallest water companies will find it easier to merge or be acquired by larger water companies. There will also be a less complex regulatory approval process by which larger companies may merge or acquire others.

“As ever, the devil will be in the detail, which will only emerge with the publication of the draft Water Bill and associated technical consultations by Defra, Ofwat and the Environment Agency in the New Year.”

“Concerns about over-abstraction have been fudged”

Environmental NGOs have broadly welcomed the proposals, but several have expressed concerns about timescale and implementation.

Describing the White Paper as a plan “with no bottle”, the Wildfowl & Wetlands Trust said that while the measures outlined could reduce water use and better safeguard wetlands,  action was delayed and concerns about urban flooding and over-abstraction had been fudged.

Carrie Hume, Head of Conservation Policy at the Wildfowl & Wetlands Trust said:

“Wetland drainage systems that soak up floodwater in towns and cities are easy to create, often inexpensive and highly effective.

“But standards for their installation have still not been published while the concept of retrofitting around existing urban areas is all but ignored.

“And the Government has offered disappointingly little to encourage reduced water use. Water meters do cut consumption and stronger inducements promoting their installation could have been very effective.

“Unless we harness the power of nature to help prevent flooding we are in for a seriously tough time with major flooding events like those of 2007 in Gloucestershire, which cost £3.4 billion, readily happening again.

“And unless we seriously tackle over-abstraction from rivers and elsewhere, it will be crisis management for our children because we didn’t have the bottle to tackle the problem when we had the chance.”

The WWF welcomed the paper but expressed concern about possible delay in implementing the measures. The NGO said it was particularly important that the Government should take urgent steps to resolve future water-management issues and introduce stronger protection for the environment.

Customer watchdog the Consumer Council for Water welcomed the publication of the Water White Paper. Chief Executive Tony Smith said:

“There are a large number of developing issues of concern to water customers that need to be addressed and we hope that this document, with a bill to follow will focus on those matters.”

“Over the next few weeks we will be examining the White Paper in detail to understand how government propose to address these issues of genuine customer concern.”

Draft Water Bill to be introduced in early 2012

 Next steps for the Government will be the publication of a draft Water Bill for pre-legislative scrutiny in early 2012 followed by the introduction of a Water Bill as soon as Parliamentary time allows. The Government will also produce a new strategic policy statement and social and environmental guidance for Ofwat during 2012.

Together with the Environment Agency, the Government will support catchment pilots across the country, with particular focus on 25 which will be evaluated in early 2013. New arrangements will also be put in place to work with stakeholders on the design of a new abstraction regime in early 2012.

The Government said it was also planning to intensify efforts to deal with the legacy of unsustainable abstraction and would publish information on progress on the Restoring Sustainable Abstraction programme in 2012. Final social tariff guidance in early 2012 and a draft guideline for the next water resources management planning round during 2012 will also be produced.