'There's a Hole in my Bucket, dear Boris, dear Boris'
David McNeice, Director in DWF's Water practice, analyses the Public Accounts Committee's report on the outlook of "Water Supply and Demand Management", the alarming levels of water leakage and the support water companies need from government.
On 10 July 2020 the Public Accounts Committee published a rather damning and bleak report on the outlook of "Water Supply and Demand Management".
Within the report was a specific indictment at the government's (specifically the Department for Environment, Food & Rural Affairs' (Defra)) failure to deal with the want to lower water prices against the need to invest in infrastructure, as well as the alarming statistic that more than three billion litres of water are wasted every day through leakage alone.
For those whose memories don't cast far enough back or who aren't subjected to re-living nursery rhymes through children or grandchildren, the nursey rhyme the title of this article has borrowed ("There's a Hole in my Bucket" for those who had thought I might have lost my mind) has never seemed so apt.
The rhyme goes thus; there is a hole in the protagonists bucket, in order to fix the bucket, our hero needs straw, in order to cut the straw he needs an axe, in order to sharpen the axe he need water to whet the sharpening stone and in order to get the water he needs a bucket….which has a hole in it.
This is the problem the water companies are faced with.
Before we consider how to resolve these issues, or what recommendations the report suggests, we need to understand the magnitude of the problem.
As set out in report, the peak of water leakage/wastage was 4.5billion litres a day in the early 1990s. There was some significant improvement throughout the rest of the decade, to limit this leakage to 3billion litres/day; however, in the past 20 years, there has been no improvement. Putting this in to context, this is 1/5 of Great Britain's total water usage being lost to leakage.
This has been put in even starker context in light of Covid-19, and the report's suggestion that there are water shortages, and that potential the UK will "run out of water within the next 20 years".
The report labels these last 10 years, "a decade of complacency and inaction", with nothing more than rhetoric given by Defra to urge water companies to "do better". There are incentives in place with water companies to penalise them for wastages, with the hope that leakage will fall by 16% by 2025 (Ofwat). The report's recommendation is that Defra's name and shame water companies "not pulling their weight" with league tables and intimates additional penalties for the worst performers.
The short sightedness is that it is not always (or even often) the water companies fault.
The whole prospect of this Catch-22 stems from issues with infrastructure. The Public Accounts Committee does not hold back in pointing the finger at government who "has been too slow to implement policies that could improve water efficiency" .
The suggestion is that not enough has been done to resolve the tension that water companies face between needing to invest in infrastructure and the pressure to keep water bills affordable for consumers.
Fundamentally, and in line with our nursey rhyme hero, there is a dire need in the UK's water industry to fix the hole in the bucket. Although some criticism levied at water companies may be fair in some circumstances, the buck does not (nor can it), stop there.
This author's view is that there needs to be significant support and funding from central and local governments on improving infrastructure; such that it is not just left the water companies whose hands are tied by government, the Secretary of State and local planners.
The question then is where does the money come from? This author is at odds with the Public Accounts Committee's recommendation that what is needed is, "guidance to water companies on the level of investment needed to ensure resilience by 2050", when earlier saying there is a potential that the UK will have ran out of water by 2040.
There needs to be more than rhetoric and hyperbole, there needs action; and in order to act, there needs to be cash support to the water authorities, agencies and companies.
In the current economic downturn, of which we will continue to feel the effects of for the next decade, it is going to be even harder to deliver both cost savings and strategic infrastructure funding. This is even more concerning when the main calls for infrastructure improvement are split between development of water management, waste management and flood alleviation, the latter being more concerning with climate change and the rising water levels in the UK.
Although the Public Accounts Committee in relation to water management is a great start, it doesn't seem point out issues we already know, and point the finger at government who was asleep at the wheel for the last 20 years. Action needs to be taken now, or the hole in the bucket is going to getting an awful lot bigger.
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