An Independent Report commissioned by Ofwat is warning that water resources planning may not have always delivered timely, best value solutions for customers, the environment, and the economy.

Photo: Thames Water Beckton desalination plant

The water sector regulator commissioned the Report to consider how the water resource planning regime in England may need to adapt if it is to remain fit for purpose and continue to deliver value for society, the economy and environmental outcomes into the future.

The Report by independent consultant Trevor Bishop, former Director of Strategy & Planning at Ofwat, cites a number of examples, including:

• Thames Water’s Beckton desalination plant which has not performed as anticipated and with hindsight may not have represented the best solution to manage peak demand pressures in London.
• The water resources planning process has not yet delivered a suitable solution to the challenges on the Rivers Test and Itchen and appears unlikely to do so until beyond the 2027 deadline.

“It appears that gaps are emerging between theoretical plans for water resources and the reality on the ground”, the report says. According to Bishop, any such miscalculation increases the risks of:

• Loss of public water supply with social, economic and public health issues
• Additional damage/stress on the environment
• Poor investment decisions leading to higher costs for customers with suboptimal investment and management
• Reduced confidence in the sector as a whole

Next generation of solutions will have "greater risk of poor delivery and/or missing outcomes"

With many catchments either at, or close to or beyond their sustainable limit and effectively closed to new annual abstractions, the report says the next generation of supply/demand solutions will:

• be more complex – reliance on new and emerging technology/interventions
• include a new generation of large-scale infrastructure solutions (transfers, reservoirs etc.)
• be more contentious – will require greater customer participation and acceptance
• have greater risk of poor delivery and/or missing outcomes
• be costlier with average £/megalitre likely to be considerably higher than a decade ago

Practical delivery risks (supply chain, skills/capacity etc.) are “not generally well incorporated” into water resource planning

Further pressures include the impacts of climate change and increased water demand due to population growth, coupled with a reliance on customer participation/cooperation “at a time when confidence and trust in the sector is less than ideal.”

The report warns that practical delivery risks (supply chain, skills/capacity etc.) are “not generally well incorporated” into water resource planning and that a number of companies are struggling with supply chain and skills issues for AMP7 delivery (smart metering, reuse, desalination etc.).

In addition, the current approach “may mask material risks, increase costs and provide a false confidence in security of supply.”

In order to reduce the risk of making suboptimal investment choices, the water resources planning community “will need to think and act differently”, Bishop suggests.

Need for high quality plans has never been more critical and the risks/consequences of failure never greater

The Report says:

“The need for high quality water resources plans has probably never been more critical and the risks/consequences of failure never greater. Whilst the performance of water resources planning overall has undoubtedly delivered significant value, the report highlights that the process may have also informed some poor decisions with impacts on security of supply, cost to customers and environmental outcomes. “

It also draws attention to a number of ‘near misses’ with regard to potential failures of water resource planning, citing as an example the summer of 2022 across parts of Devon and Cornwall where South West Water had to manage the rapid drawdown of two key reservoirs in response to high water demands the company k. The scale and pace of the drawdown appears to have exceeded planning assumptions and required the company to reappraise water resource investment requirements. Amongst measures to mitigate a further dry winter the report points out that the company initiated development of two desalination plants which had not been identified as required through the formal WRMP process.

Trevor Bishop is warning that without change the water resource planning process is at risk of lower quality planning in the future and poor investment choices.

The report details the following three key areas for improvement:

• Planning framework, governance, leadership and oversight
• Efficient, effective and proportionate process
• Technical Review – which would focus on the trade-offs between value, cost, transparency and confidence in decision making

The assessment also highlights the need for a National Centre of Excellence for Infrastructure (NCoEI) to drive, coordinate and ensure efficient and effective delivery of timely and sustainable infrastructure solutions.

In addition, Bishop is proposing the creation of a National Leadership Group to provide a ‘controlling and coordinating mind’ for water resources planning/management at a senior level in a similar approach to the current National Drought Group model.

Ofwat commissioned the Independent Report to consider how the water resource planning regime in England may need to adapt if it is to remain fit for purpose and continue to deliver required value for society, the economy and environmental outcomes into the future.

Publishing the report, the water sector regulator said:

“The report sought input and insight from a range of relevant assessments, individuals and organisations. The report is the reflections of the independent author.”

Click here to download the full report Water Resource Planning – Case for Change