The Resilience Task and Finish Group set up by Ofwat to consider what resilience means for the wider water sector has put forward 10 recommendations in its final report, saying “the challenges are significant and it will take many years for the sector to build resilience.”

The group’s work will feed into Ofwat’s ongoing reform of the policy framework for the PR19 price review and inform the wider resilience policy landscape - the UK and Welsh governments introduced a new primary duty on resilience for Ofwat in the 2014 Water Act.

The regulator is currently developing its policy response to the new duty and has committed to publishing further thinking in December, including in response to the Task Group report.

The report has identified the following three main groups of resilience challenges:

• A step change in approach is needed to build resilience -  with a greater need for partnership and softer infrastructure solutions where appropriate. This step change will, in particular, require far greater engagement with customers to understand their expectations on service levels and to enable a more active role for customers in building resilience.
• A clear overview of the resilience of the sector does not exist - this has come from a lack of an agreed definition of resilience, a dearth of consistent measures and no fixed resilience standards.
• It is unclear as to whether the current structure of the sector and the form of economic regulation encourage legitimate resilience investments to be made. It is also unclear if decisions are being made on the appropriate geographical scales to build resilience in an effective way.

The group has reviewed a considerable amount of evidence from a wide range of stakeholders and sources to produce the following 10 recommendations:

1. Agree a shared definition of resilience for the sector.

2. Increase public engagement and education.

3. Ensure clear routes for funding legitimate resilience measures.

4. Ensure coherent planning for resilience at both a national and regional level.

5. Establish wastewater, sewerage and drainage plans.

6. Improve understanding of risk and failure.

7. Ensure services are resilient under different water sector structures.

8. Develop benchmarking, standards and metrics.

9. Ensure existing plans are stress-tested.

10.Establish a water and wastewater resilience action group.

The group has acknowledged that although the recommendations will feed into Ofwat’s policy development work, not all of them are directly for Ofwat, commenting:

“It is clear that resilience will not be achieved through simply implementing a set of recommendations. The challenges are significant and it will take many years for the sector to build resilience.”

“Clearer and smoother pathway for funding resilience-building measures should be in place by 2017”

On the issue of funding resilience investment, the report says that a clearer and smoother pathway for funding "legitimate resilience-building measures" should be in place by 2017, in time to inform PR19. Ofwat needs to provide clear guidance from on its treatment of resilience investments when it considers business plans, the group says. There also needs to be flexibility to fund innovation against a wide assessment of costs and benefits. At the same time water companies and customer groups must develop improved methods to test customer acceptability of risks and costs, commenting that “willingness to pay is a poor representation.”

The report proposes that there needs to be a better consideration of the most appropriate mix of hard infrastructure (e.g. below-ground networks and large physical assets) and soft infrastructure (e.g. community-led projects and sustainable urban drainage systems) for individual circumstances. This would require a clearer framework for developing, regulating, funding and evaluating soft infrastructure and community-based resilience.

Ofwat should specifically look at how and whether its framework could enable water companies or others to fund distributed assets and/or to manage assets at a community level, the report says.

Water companies should have individual wastewater and sewerage plans linked to SuDs

The group is also calling for national wastewater and sewerage strategies and for each company have an individual wastewater and sewerage plan linked to SuDS, wider drainage issues  and rainwater and greywater harvesting through the parallel development of drainage plans.

The report also makes the key point that Ofwat’s approach and assessment of impacts needs to enable and incentivise resilience in a fragmented and/or evolving sector - where not all the stakeholders are within the regulatory, licensed, regime.

Ofwat is under no obligation to act on any of the recommendations made by the independent Task and Finish Group.

Click here to download the full Resilience Task and Finish Group report