Has the government identified the most relevant strategic priorities for Ofwat? If not, please provide details of the priorities that should be included.
Ofwat has a broad set of responsibilities including consumer protection. The LGA is most interested in the priorities that directly affect local government and we welcome the stronger focus on environmental protection.
Government recently consulted on the draft policy statement on Environmental Principles and in addition to the strategic priorities identified for Ofwat, a requirement to undertake their functions should also be aligned with the outcome of this consultation exercise.
Government should then consider requiring Ofwat to encourage water companies to produce a route map to achieving net-zero by 2030. The route map should include the water companies’ activities and their supply chain and the achievement of milestones linked back to the payment of shareholder dividends.
Does the strategic policy statement effectively set out government’s expectations of Ofwat in supporting delivery of our priorities? If not, please identify where these expectations could be made clearer.
The revised statement sets out expectations of Ofwat that will be welcomed by local government, for example in challenging the water companies to support an increase in the use of nature-based solutions, and to prioritise improvements to protected sites. Defra’s 25 year Environment Plan sets out an ambitious programme of reforms and new duties for councils such as the requirement to produce a local nature recovery strategy. It is not clear how councils will be able to engage water companies in this process so it is helpful that the policy statement makes an explicit reference to partnership working, and that Ofwat should use the regulatory framework to ensure that the water companies are tackling nutrient pollution, where appropriate.
Government should consider requiring Ofwat to encourage water companies to meaningfully engage with councils, as primary customers, on strategy development.
There is a role for Ofwat to ensure that water companies can design and deliver river-basin catchment and nature-based solutions by engaging with the Local Development Plan drafting process, particularly around the Non-Statutory Spatial Framework and the Green Infrastructure Strategy elements, to ensure that land is allocated and designated as necessary for water catchment to address extremes of both water supply shortage and of flooding.
Do you consider that this statement to Ofwat is clear and easy to understand? If not, please identify any areas that could be clarified.
An area to be clarified relates to paragraph 21 on pollution. The text sets out the need for water companies to ensure that all measures are needed. However, we know that the issue that has raised much public interest is the repeated contamination of waters despite the use of regulatory instruments. There is a need to review whether the regulatory instruments do comply with the "polluter pays" principle in such a way that they are an effective deterrent.
Further clarity is also needed on how there can be upfront investment (with government, private investment and water companies) in water supply infrastructure and water catchment management in water-stressed areas prior to further growth as identified in the planning process.
We welcome further information from Defra and Ofwat on how the statement of principles will be applied, and when councils can expect to see a stronger challenge to the water companies on their environmental responsibilities.