That answer almost makes you long for housebuilders to be regulated. If a putative OfHouse took the approach of the utility regulator in Northern Ireland, it could simply tell regulated housebuilders to improve their standards, and then ask for efficiency savings of 7 per cent in addition.
That’s not the way it works in the market. Instead, the government sets standards and the market responds. Competition should work its magic, companies innovate and the reward for the best is expansion. The penalty for the worst is loss of market share – and perhaps failure.
Now we are seeing the same standards debate around sewerage. The adoption of private sewers by water companies has brought this to a head, and no-one wants to see housebuilders press ahead with developments where sewers will fail to meet future standards and be left in limbo.
The Welsh Assembly is tackling this issue and will shortly require all sewers to be built to national standards that will allow them to be adopted by the water companies.
In England, however, the situation is more complex. The Department for Environment, Food and Rural Affairs (Defra) consulted on standards, but there were two sets of responses that gave it pause.
One set was the housebuilders, which argued in a familiar plaint that it would add costs.
The other set raised the question of sustainable urban drainage systems (Suds) and whether the two sets of standards should be aligned.
The simple answer is yes, of course they should be aligned. But that doesn’t mean one can’t be put in place now and the other added over time. And Suds must be a particularly hard nut to crack – in my seven years at Utility Week I have seen very little progress on the issue, despite some dedicated proponents and a general feeling in industry and politics that it is a good thing.
Regulations on Suds are not ready, and they are so far from being ready that Defra should ask itself whether it is using Suds to avoid confronting housebuilders. If so, it should be braver. This uncertainty helps no-one and especially not water companies, which will be responsible for the sewers for decades after the housebuilders have moved on. The sooner Defra implements standards on sewerage, the more quickly housebuilders – at least the best of them – will be able to respond.
If housebuilders truly believe that meeting new standards on sewerage will put their business in jeopardy, they might wonder whether they should be in that business at all.
This article first appeared in Utility Week’s print edition of 21st September 2012.
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