Water companies propose policy overhaul in face of economic and environmental challenges

Posted: Monday 28th June 2010

Water UK has published ‘Meeting future challenges – Blueprint for policy action’. The paper shows how policy changes in the next two years can enable the water industry to build on success for the long-term benefit of customers, society and the environment.

Blueprint 2010-2012

The blueprint calls for policy change to remove barriers to progress in four areas: customer relations, industry incentives, regulatory rigidity, and access to finance from capital markets.

It shows the industry’s success to date as a platform for change, and the complementary roles of regulation and competition in creating fresh approaches to water use in the industry and interest groups.

The proposals include:

Environmental improvement

More measured pace in future with focus on what matters to customers

Customer involvement

Greater involvement in company plans and price-setting through a stronger consumer representative body

Competition

Removing barriers to competition through upstream water trading

Affordability

Establishing a consensus on social tariffs

Protecting low income customers by slowing down the pace at which existing cross-subsidies are unwound

Price signals

More use of price signals through flexible abstraction and discharge consents

Challenges 2010-2030

In the next two decades, the UK water industry must overcome new challenges to its ability to provide water and sewerage services at the quality and price required by an advanced society in the 21st century.

These challenges are of a different order from those faced in the two decades since privatisation in 1990. They are:

· meeting threats from pollution to the high quality of tap water

· managing surface water, flooding and coastal erosion using natural processes where possible

· managing water resources to provide an affordable public supply without harming the environment

· reducing greenhouse gas emissions while at the same meeting higher standards time

· adapting the service to climate change by increasing the resilience of critical assets

WaterUKChief Executive, Pamela Taylor, said:

“The industry has the experience and expertise to be as successful in overcoming the new challenges as in dealing with the massive problems it faced in the 1990s.

“We are in a good position to move forward and the credit goes to policy-makers and regulators as well as management. But now we need a fresh approach.

“The companies will be held back if the assumptions on which policy has been based don’t evolve to meet very different challenges. They have come together to make the case for change in the next two years that will equip them for the next twenty.

“The blueprint is ambitious but realistic. It will help improve the industry’s performance without putting at risk its achievements. We are pleased that early discussions with the Environment Agency on flexible consents and the Consumer Council for Water on customer involvement have been very positive.

“We hope that ministers will respond positively to our proposals and re-set the policy compass for a strong water service, satisfied customers and a healthy environment.”




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