Inter-water company transfer must “double” over the next 10 to 20 years, a senior water official has told the environment, food and rural affairs select committee.
Dr Sebastian Catovsky, deputy director of water services at the Department of Environment, Food and Rural Affairs, (Defra) said that greater transfers between regions is “crucial” to remedying water stresses across England.
The National Infrastructure Assessment, published earlier this week, identified transfers as one of the key tools for remedying potential water shortages.
Giving evidence to the committee’s inquiry into the regulation of water on Wednesday (11 July), he said the 4 per cent of water currently traded between companies “probably needs to double over the next 10 to 20 years”.
He said that the National Policy Statement (NPS), which Defra is currently drawing up with a view to publishing later this year, could facilitate the infrastructure required for inter-regional transfers.
“The NPS is there to identify need for new infrastructure. We recognise that we can’t leave it just to individual companies. There will be some transfers that we need a national view on.”
He also said recent stiff fines for water companies had been a “wake-up call” for the industry, adding that he would have preferred companies “investing rather than paying fines”.
Labour MP Angela Smith, who is a member of the committee as well as chair of the all parliamentary group on water, said the government has a “real role” ensuring that transfers take place, potentially requiring the establishment of new Thames Tideway project style delivery vehicles.
Thérèse Coffey, water minister, said the industry had “more to do” on getting rid of offshore tax arrangements but is “making progress”.
“I understand concerns about financial gearing but we have seen positive indications by water companies that they are getting with the programme.
“They are on board if not as quickly as they might have been.”
Speaking to the committee in the morning session on the same day, Ofwat’s chief executive, Rachel Fletcher expressed disappointment that water companies are not collaborating enough to tackle problems such as climate change and population growth.
She said: “We need as a sector to think about the bigger picture about transferring water from one region to another.