Establishing a new mandate for the water sector
We need the UK and Welsh governments to set a smaller number of clearer objectives to inform the decisions made by regulators and water companies. We recommend this is done through a new mandate for the water sector, enabled by:
- Clearly defined outcomes. This should be achieved via two new overarching “apex” targets, one each for the environment and public health,
- Confirmation of the level of acceptable risk. This should be achieved via new legally binding resilience standards, and
- Accountability and focus. This should be achieved via clear remits and refocused duties for regulators.
Clearly defined outcomes
We consider that the objectives of the Water Framework Directive, targets under the Environment Act, the Bathing Waters Regulations, as well as many of the targets and regulations applying to rural and urban land management, should all be updated and consolidated to centre around three main long-term public policy objectives. These reforms to environmental legislation must ensure:
- A simpler legislative framework to enhance environmental protection
- Better targeting where meeting long-term objectives will require different courses of action in different catchments
- Investment focussing on reducing harm and the sources of harm. Actions must deal with the sources of harm, not just visible symptoms.
Legally binding resilience standards
Government should:
- Set legally binding resilience standards. They should cover drought resilience, peak water demand, forward-looking asset health measures and flooding resilience.
- Ensure resilience standards are underpinned by requirements and guidance with measurable and stress-testable outcomes
- Use an interim update to the Strategic Policy Statements to ensure reform of economic regulation so that water companies are sustainably funded through investment to meet those new resilience standards.
Clear remits and refocused duties for regulators
- Enact a new, small number of duties for the economic regulator and set a focused Strategic Policy Statement to deliver the priorities of the government of the day.
- Strengthen regulator co-operation, particularly in areas of environmental performance and enforcement.
- Put in place new arrangements to provide more transparency and regular consideration of how well government, regulators and companies are delivering the government’s priorities.
- Give regulators the flexibility to attract and retain the right people.
- Provide for at least some full-time or near full-time non-executive members on the Boards of the economic and environmental regulators.
