Blog Type, IPT Blog, Industry Sector, IPT, Ethics & Sustainability, Energy | January 2016

Securing the UK’s Water Supply

The widespread urbanisation of people in the UK, and indeed worldwide, creates a number of challenges that need to be addressed in order to ensure the efficient functioning of a city. While attention has focused on future-proofing transport and communications networks, perhaps most crucial of all is the need to ensure a safe, secure and sanitary water supply.

Challenges to the Industry

There are a variety of challenges facing the future of water from growing populations, climate changes, environmental standards and the rising demands of consumers. It has been estimated that the UK’s population will reach 73 million by 2037. This population growth is particularly concentrated in London and the South East which already suffers from a water deficit. The impact of climate change is also more heavily concentrated in the South East which has seen a further reduction in summer rainfall. Climate change also increases the likelihood of flooding, which is another cause for concern.

The water industry currently sets out plans that look 25 years ahead, however following a meeting with OFWAT and DEFRA it is likely they will be planning for nearer to 50-60 years ahead. The industry has been able to track the changes in rainfall in the past to give an indication of the future rainfall, however given the effects of climate change this is becoming more difficult. The future will no longer look like the past. A second area which requires planning ahead for is the use of water. Water is extracted for more than just drinking, farmers use it for irrigation and it can be used for recreation. For many of these usages when water is extracted, it is hard to return it in times of shortage.

The role of the Environment Agency was criticised as it has too many priorities, which subsequently resulted in an idea that water companies should be in charge of flood management, something they did until 1989. This was met with mixed responses, with the financial and reputational risk being a major cause for concern. As well as this, flood defences are expensive and there was little consensus on whether the public would want to pay for this service, despite currently paying for it through taxes. OFWAT has a very narrow view of “willingness to pay,” as a result it is unlikely that water companies would provide flood defences unless the government legislated for it.

Looking Ahead

The effects of the aging workforce mean there is a shortage of young skilled people entering the water and utilities industry. Anglian Water has a large apprenticeship programme and takes on a significant number of graduates to try and combat this. People will be key to the resilience of the industry. There will need to be more innovative ways to market water.

Australia have an effective water trading scheme, potentially the most effective in the world, of which a similar scheme has been reproduced in some parts of the UK, with other companies looking into it. The trading has been occurring within water catchment areas rather than from areas with a large water surplus to those of a deficit. This approach is not without its drawbacks as water is hard to ship round the country, making this an expensive approach.

The energy industry is more reliant, partly due to the “Big Freeze” in the winter of 1962 where electricity and gas got cut off, and as a consequence huge investments were made. Additionally, the government intervened to make energy more efficient. The probability of water being cut off is less likely than that of energy, which also makes it less of a political priority. Energy sector planning is less long term but more influenced by government regulation. Smart meters was another discussed by participants at the event as a means of encouraging the reduction of water consumption. This is something Anglian Water included in a recent business plan but they couldn’t prove the ‘willingness to pay’ and subsequently dropped it.

Flooding was a recurring topic during the discussion. Houses are being built on flood plains because house building is viewed as a bigger priority than flooding or the environment more generally. Flooding is likely to be the biggest impact on the UK as a result of climate change and so having adequate flood defences is even more important. Successive governments have looked into flood mapping and so predicting these flood events is more accurate.

Secure water a pipe dream?

The discussion provided many ideas for making the water industry more resilient. Some of these are long term ideas, other blue sky ideas. The issue isn’t a lack of ideas it is a lack of political will. The tightness of OFWAT’s “willingness to pay” prevents the industry from driving these changes themselves. While the government’s focus remains on flooding and the short term aftermath it is unlikely that any great changes to water policy can be expected. The current method of water extraction isn’t sustainable; it is unlikely it ever will be. At the other end of the debate, with a ballooning population it is unlikely demand for water will decrease, especially as people are reluctant to give up their power showers.

Words by Catherine Hunter.

With thanks to the event's chair and speaker: Huw Irranca-Davies MP, Chair, Environmental Audit Committee, House of Commons; and Jean Spencer, Director of Regulation, Anglian Water.