The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Rebecca Pow)
It is late, but I think we are all still very focused on this issue, which is a tricky one. To be talking about sewage at this time of night is really focusing the mind. I congratulate my right hon. Friend the Member for Tunbridge Wells (Greg Clark) on securing this debate concerning Southern Water and the issues he is facing in his constituency. He is a strong spokesman for his local area, and rightly so. I just want to touch on this whole issue because we are talking about water and a water company, and water is so important in our lives. It plays an important role in our 25-year environment plan and there is a whole section on water in the Environment Bill, which had its successful Second Reading in this Chamber earlier tonight. Some of the things in the Bill will touch on issues raised by my right hon. Friend.
The Government recognise the need to secure long-term water supplies due to climate change and our growing population, so we expect the water industry to take more action in several areas, such as reducing demand for water alongside investing to increase water supplies. The industry also needs to take action on sewerage infrastructure. We recently consulted on a range of measures to reduce personal water usage, including a call for evidence. The need for investment in infrastructure is well set out in the draft national policy statement for water resources infrastructure. I am concerned, however, about the quality of the water environment, and there is more to be done. In the case of some water companies, a great deal more needs to be done.
Last week, the Environment Agency launched a consultation on how we protect and improve the water environment. The “Challenges and Choices” consultation explores how we can work together to manage our waters and deliver significant improvements to water bodies in England in the face of increasing pressures, one of which is housing and the growing population. Given such challenges, the Government want a water sector that delivers more for the customer and the environment. The Government and regulators are challenging the sector to improve its environmental performance, put customers at the heart of the business, and restore trust in the sector. I believe that my right hon. Friend actually used the word “trust” in his powerful speech.
Companies are responding to the challenge and have put forward proposals in their business plans committing to improve performance and offer bill reductions to customers, but there is much more to be done. For example, too much water simply leaks from the system, and significant investment is needed to improve the resilience of our water supplies and to improve service and environmental standards. In July, as my right hon. Friend might remember, the previous Environment Secretary called a meeting with all the water company chief executives to hold them to account over their performance towards customers and the environment. It was quite a groundbreaking moment that received a lot of coverage because he was quite ferocious with the companies.
Several companies, including Southern Water, had recently been assessed by the Environment Agency as demonstrating unacceptable levels of environmental performance. Companies were also challenged over customer service and leakage performance. As a relatively new Environment Minister, I am now working with regulators to put pressure on water companies to do more to increase resilience, enhance the environment and provide customers with value for money.
Water, as we all know, is a really precious commodity, and it needs to be treated as such. I want to be clear that Government and regulators are committed to taking action and holding water companies to account for their poor performance. Earlier this month, Ofwat issued a penalty against Southern Water of £126 million due to serious failures in the operation of sewage treatment works and for deliberately misreporting performance information. This was the largest enforcement action ever taken by Ofwat and resulted in a £3 million financial penalty and £123 million in rebates to be paid out to customers over the next five years.
I am pleased that Southern Water has made commitments to be more open and transparent about its performance with respect to the environment, and there have been changes in management personnel at the company. Additionally, Southern Water has now committed to reduce pollution incidents by 41% by 2025, along with reducing supply interruptions by 51%. The Environment Agency has set out ambitious measures in the water industry national environment programme, which will result in £4.4 billion of investment by water companies in the natural environment between 2020 and 2025, and £547 million of that investment relates to Southern Water. I am optimistic that that will help to tackle some of the biggest challenges facing the water environment, from the spread of invasive species to flow affected by chemicals and nutrient pollution. It is imperative that we clean up our water and, as Environment Minister, I want to see improvements.
To help to prevent sewage flooding incidents such as those that my right hon. Friend mentioned in his constituency, water and sewerage companies have a number of duties in relation to drainage, wastewater and sewerage, including a duty to effectually drain within their areas of operation. Drainage and wastewater infrastructure must be better prepared for extreme rainfall events to reduce the risk of overloaded sewers flooding homes or overflowing into rivers and the sea, which is simply unacceptable—my right hon. Friend referred to some incidents where that happened. I am committed to ensuring that water companies are making those preparations. That is why the Environment Bill contains a measure to place drainage and wastewater planning on a statutory footing, because whereas the water that comes out of our taps has previously been dealt with on a statutory footing, interestingly, sewage has not and has instead been dealt with through a voluntary arrangement. I am optimistic that that will be a strong feature of the Environment Bill, which we have talked about tonight.
That measure will ensure that sewerage companies fully assess their wastewater network capacity and develop collaborative solutions with local authorities and other bodies responsible for parts of the drainage system. That will be in addition to the statutory plans that companies already publish on managing long-term water supplies. South East Water, the water supplier for Tunbridge Wells, recently agreed and published its plan. I expect Southern Water to work collaboratively with South East Water to ensure that their plans align. Again, the Environment Bill contains measures on getting water companies to work together much more collaboratively, so that their plans overlap, whether they share the same boundaries or whether, as in this instance, one has the water coming out of the tap and the other deals with what goes down the loo. There will be a duty to work together much more closely on those issues.
The Government have also published a surface water management action plan, which sets out the steps we are taking with the Environment Agency and others to manage the risk of surface water flooding. The plan sets out 22 actions to improve our understanding of the risks of flooding and strengthen delivery. Key actions include making sure that infrastructure is resilient—something that I think my right hon. Friend was getting at—joining up planning for surface water management and building local authority capacity. One of the actions in the plan is to make drainage and wastewater management plans, and that is now in the Environment Bill. Ofwat has recommended that water companies should already have started their action plans, so Southern Water should be starting to formulate its plan. In addition, the autumn Budget allocated £13 million to tackle risks from floods and climate change at the national level. Local authorities have the opportunity to bid for some of that funding to address local needs.
My right hon. Friend also talked about new housing developments and the pressure that they can put on drainage systems. I fully understand—because he painted such a clear, if ghastly picture—what he said about the situation in Paddock Wood and the new housing there and in surrounding areas. I have a great deal of sympathy with those who have had to experience these sewage events. As a slight aside, Southern Water does not have a good record of responding to complaints either—indeed, it has a very poor record—and I imagine that a lot of those affected will have made complaints.
The national planning policy framework was revised in July 2018 and stated that sustainable drainage systems—SuDS, which I am a fan of—should be given priority in new developments in flood risk areas. The NPPF strengthened existing policy to make clear the expectation that SuDS are to be provided in all new major developments, unless demonstrated to be inappropriate. Local flood authorities must also be consulted on surface water drainage considerations in planning applications for all major new developments. This really ought to go some way to address issues raised by my right hon. Friend. Water companies should be consulted on these planning applications, and the plans should be rejected where it is thought that the infrastructure really is not suitable. Water companies will charge new developments for connection to the sewerage systems, so they have that right to charge where they think we need more connections, and they should use this money to pay for any upgrades.
The economic regulator Ofwat is currently in the final stages of its price review process with the water companies. Ofwat has pushed Southern Water to improve its performance, make efficiency savings and reduce bills. I support Ofwat in its work with Southern Water to help it to bring its business plan up to standard. Without a doubt, evidence highlights that the performance of Southern Water has left a great deal to be desired. If improvements are not forthcoming, I shall be requesting a meeting with Southern Water. I believe my right hon. Friend asked whether I would step in and take some serious action, and I shall be doing that and asking some serious questions.
Greg Clark
I am grateful for the commitment that my hon. Friend has given to take action. Will she agree to meet me, and perhaps some of the residents in my constituency, to discuss the response to her meeting with Southern Water, so that we can make an assessment of whether things are heading in the right direction?
Rebecca Pow
Of course I will meet my right hon. Friend. We want water companies that are working effectively and efficiently, and we need to understand the pressures they are under and how to deliver for all new houses. We are committed to building new houses as a Government. We need new houses, but they need to function properly, with the right infrastructure, so of course I will meet him.
In conclusion, we want to see a water industry that puts customers at the heart of the business, contributes to communities, and protects and enhances our precious natural environment. I will continue to push the sector and hold water companies, such as Southern Water in this case, to account if necessary.
Question put and agreed to.