Water companies need to double the level of annual investment in wastewater treatment for the next AMP cycle to tackle the contentious issue of managing combined sewer overflows (CSOs), according to the chair of the Environmental Audit Committee.
Speaking at the UK Environmental Law Association (UKELA) annual conference, Philip Dunne said Ofwat’s role was key to solving the issue but would be reliant on guidance issued by Defra ahead of the next price review.
Together with anticipated legislation within the Environment Bill and targets to be set by the Environment Audit Committee, Dunne said the timing of momentum around CSOs is “near perfect” to align with the Secretary of State issuing guidance for Ofwat to set pricing parameters for PR24.
“I hope our inquiry and all the work being done in this area will encourage the government to be bold in recognising that water treatment needs at least as much priority as water supply when it comes to working out what companies should be spending money on,” he said.
He noted that water companies have been spending, in aggregate, around £1 billion a year since privatisation. “My view is they need to start spending double that to make a real impact,” he said, adding that the Green Recovery spending being permitted by Ofwat for the remaining three years of AMP7 shows companies are willing to spend money and Ofwat is willing to let them.”
Last month, Ofwat gave the provisional green light to an additional £1.3 billion of investment during AMP7 that included nature-based solutions and bathing water spending.
Dunne added that regulators should be encouraging water companies to invest in and use real-time monitoring to remove the burden from the overstretched Environment Agency that relies on rudimentary testing techniques.
A recent Public Accounts Committee heard that the EA has resisted suggestions to update its approach to monitoring despite having the tools available.
Dunne motioned a private members Sewage (inland waters) Bill, which although did not complete the passage to law, several of its focal points have been added to the Environment Bill. Water companies, the EA and Secretary of State will all be required to report on the use of overflows.
He previously told Utility Week this would keep water quality on the government’s agenda to be held accountable in a way it has never been before.