Speaking to water firms at Water UK’s City Conference, Stewart said: “Clearly we ought to be smarter about thinking about how we work with water companies, and I’d be really interested in ideas coming forward from you about ways in which you might see a self-interest in contributing to flood schemes.”
He added that, although the government would contribute £2.3 billion over the next six years, “we should leverage much more initial money”.
“The water sector is one clear way because obviously these floods cause chaos for your pumping stations, chaos for your sewerage etc,” he said.
Pennon Group chief executive Chris Loughlin agreed, saying: “There’s not enough investment and, despite the brave words from government, there will never be, in my opinion, enough investment from the government, it has to have some private sector finance.”
He added that flooding was a “hot potato”. “We will need a new way forward,” he said, “and one day we will have to come back to this issue.”
Last October, Ofwat chief executive Cathryn Ross opened the door to water companies taking on responsibility for co-ordinating and implementing flood defences, suggesting they are “in the frame” for taking over from the Environment Agency on delivering flood schemes.
There are mixed views in the sector on roles of water companies in flood defence. One of the UK’s biggest water companies, Severn Trent Water, has said it supports the idea of a debate on water companies’ role in flood defences. However, Anglian Water has argued that partnerships with councils can work just as well, without the need for a “sweeping reform of ownership and responsibilities”.
The debate intensified with the recent floods, with respected economist Dieter Helm calling for a “radical rethink” on flood defence including greater responsibility for water companies.
The government has pledged to review flood defence spending, but the Department for Environment, Food and Rural Affairs recently told Utility Week it still has “no plans” to review water companies’ roles on flooding.
Over the Christmas period, Yorkshire Water was heavily affected by severe weather, and was forced to draft in support from fellow water companies – Wessex Water, Northumbrian Water, and Welsh Water – to help it battle floods. Utility Week understands the firm could face costs of up to £55 million.
Analysts have predicted that United Utilities, which was also badly affected by this winter’s floods, could face costs of up to £50 million.