Water UK has warned that Defra’s draft strategic policy statement (SPS) to Ofwat runs the risk of vital investment being delayed until a future price review.
The trade body’s response to the SPS, which sets out government priorities for the coming price review, criticised Defra for not providing clarity on ambitions. This, Water UK said, could impair investment decisions at PR24 and see spending deferred.
Its response highlighted “the lack of concrete direction” in the statement on how companies should deliver long-term targets, which “contrasts sharply with the government’s statements of determined action”.
The group representing water and wastewater companies said Defra’s SPS in its current form “will be ineffective in ensuring that the government’s priorities are met in a timely – and environmentally sustainable – manner”.
“Our concern is that without more clarity on the specific goals the government wants delivered, there is a high likelihood that vital investment will be deferred in favour of perceived short-term pressures. Waiting until the 2030s for that investment will be too late – as a country, we cannot afford to waste the 2020s, and the delay will also increase cost.”
Work on combined sewer overflows (CSOs) would be better focused on those that may harm waterways, Water UK suggested, rather than all overflows, as the SPS currently says. The trade body noted the level of investment required to address all CSOs would risk overshadowing other work and add to bills without providing benefits.
The document lacked sufficient attention on essential asset health and drinking water quality, it said.
The organisation suggested setting explicit expectations for each price review for water companies on their path to longer-term environmental goals.
Water UK said the draft statement provided only some limited degree of accountability for Ofwat. It suggested parliament take a more active role through a select committee or annual hearing to update on the SPS.
The body called for “greater collective ambition to make the next price review transformative” by making catchment and nature-based approaches “truly mainstream”.