Asked by: Lord Goddard of Stockport (Liberal Democrat - Life peer)
Question to the Department for Environment, Food and Rural Affairs:
To ask His Majesty's Government what directions they intend to give Ofwat to reduce or abolish standing charges, to ease the financial burden on consumers, particularly the poorest.
Answered by Lord Benyon - Minister of State (Foreign, Commonwealth and Development Office)
Ofwat and the Consumer Council for Water (CCW) wrote to water companies on 18th October 2022 regarding water bills and requested companies to:
Defra expects all companies to make sure households are aware of the support schemes available to help those struggling to pay their bills. That includes bill discount schemes such as Watersure and social tariffs, payment holidays, adjusting payment plans and getting support for customers on managing their personal finances.
Asked by: Lord Goddard of Stockport (Liberal Democrat - Life peer)
Question to the Department for Environment, Food and Rural Affairs:
To ask His Majesty's Government what assessment they have made of the effectiveness of OFWAT in relation to the imposition of obligations on water companies to reduce losses through leakages over the last three years.
Answered by Lord Benyon - Minister of State (Foreign, Commonwealth and Development Office)
The Environment Secretary made it clear that water companies must improve their environmental performance and deliver more for customers.
Water companies have targets set by Ofwat that they need to meet (performance commitments), and reducing leakage is one of these. They face automatic financial penalties when these are missed.
Ofwat also has enforcement powers in regard to legal obligations companies have in legislation or their license. If a company significantly misses its leakage performance commitment this could indicate the company might be breaching a legal obligation, which would prompt Ofwat to investigate further.
Ofwat has already put in place clear financial consequences for companies that underperform on leakage. For example, in 2018 Thames Water was found to have breached its general duty under Section 37 of the Water Industry Act 1991 in regard to leakage. Enforcement action resulted in them paying rebates totalling £120 million back to customers, comprising underperformance penalties of £55 million and an additional £65 million to reflect failures of the company.
Ofwat has also set requirements for water companies to cut leaks by 16% and reduce mains bursts by 12% by 2025. In July, Ofwat reported that industry wide leakage has reduced by 11% since 2017-18. Water companies have committed to delivering a 50% reduction in leakage from 2017 to 2018 levels by 2050, and we expect Ofwat to challenge companies to deliver this and monitor progress.
In addition, water companies will need to contribute to delivery of Defra’s proposed Water Demand Target under the Environment Act 2021 to reduce the use of public water supply per person in England by 20% by 2037. This includes a 31.3% reduction in leakage by 2037, a pathway for companies to meet their 50% reduction in leakage commitment by 2050.
Asked by: Lord Goddard of Stockport (Liberal Democrat - Life peer)
Question to the Department for Environment, Food and Rural Affairs:
To ask His Majesty's Government what direction they have given, if any, to OFWAT to increase the penalties imposed on water companies for failing to rectify or prevent water leakages.
Answered by Lord Benyon - Minister of State (Foreign, Commonwealth and Development Office)
The Environment Secretary made it clear that water companies must improve their environmental performance and deliver more for customers.
Water companies have targets set by Ofwat that they need to meet (performance commitments), and reducing leakage is one of these. They face automatic financial penalties when these are missed.
Ofwat also has enforcement powers in regard to legal obligations companies have in legislation or their license. If a company significantly misses its leakage performance commitment this could indicate the company might be breaching a legal obligation, which would prompt Ofwat to investigate further.
Ofwat has already put in place clear financial consequences for companies that underperform on leakage. For example, in 2018 Thames Water was found to have breached its general duty under Section 37 of the Water Industry Act 1991 in regard to leakage. Enforcement action resulted in them paying rebates totalling £120 million back to customers, comprising underperformance penalties of £55 million and an additional £65 million to reflect failures of the company.
Ofwat has also set requirements for water companies to cut leaks by 16% and reduce mains bursts by 12% by 2025. In July, Ofwat reported that industry wide leakage has reduced by 11% since 2017-18. Water companies have committed to delivering a 50% reduction in leakage from 2017 to 2018 levels by 2050, and we expect Ofwat to challenge companies to deliver this and monitor progress.
In addition, water companies will need to contribute to delivery of Defra’s proposed Water Demand Target under the Environment Act 2021 to reduce the use of public water supply per person in England by 20% by 2037. This includes a 31.3% reduction in leakage by 2037, a pathway for companies to meet their 50% reduction in leakage commitment by 2050.
Asked by: Lord Goddard of Stockport (Liberal Democrat - Life peer)
Question to the Department for Environment, Food and Rural Affairs:
To ask Her Majesty's Government what discussions they have had with (1) Ofwat, and (2) the Environment Agency, in 2022 about (a) leakages of potable water, (b) sewage discharge into rivers and seas, (c) shareholder dividends, (d) executive bonuses, and (e) gearing of balance sheets, by water companies; and what steps they took, if any, as a result of those discussions.
Answered by Lord Benyon - Minister of State (Foreign, Commonwealth and Development Office)
Officials regularly discuss with Ofwat and the Environment Agency a number of issues across the water sectors covering all of the subjects in your questions and more. As a result a number of steps have been taking, for example, launching the Storm Overflow Plan [ Storm overflows discharge reduction plan - GOV.UK (www.gov.uk)], the consultation on introducing mandatory water efficiency labels [ UK mandatory water efficiency labelling - GOV.UK (www.gov.uk)] and the Ofwat's consultation on dividends and company performance [ Consultation on proposed modifications to strengthen the ring-fencing licence conditions of the largest undertakers]. Copies of these documents are attached to this answer.
Asked by: Lord Goddard of Stockport (Liberal Democrat - Life peer)
Question to the Department for Environment, Food and Rural Affairs:
To ask Her Majesty's Government, further to the Written Answer by the Parliamentary Under Secretary of State for water, forestry, rural affairs and resource management on 30 June 2014 (202032), what recent assessment they have made of using Kielder Water as a water source linked to a national water grid; and what directives, if any, have been issued to water companies to ensure the subject is included in their Water Resources Management Plans.
Answered by Lord Benyon - Minister of State (Foreign, Commonwealth and Development Office)
In its 2019 Water Resources Management Plan (WRMP), Northumbrian Water identified a water surplus available for trading from the Kielder Water Resources Zone. However, no other water company took this forward, due to the costs of the project compared with alternate solutions to secure water supplies.
In line with the aims of the National Framework for Water Resources, the Water Resources North regional planning group is assessing how Kielder might be able to support national water resources resilience in the future. In the autumn of this year, we will see draft regional plans and 2024 WRMPs consulted on publicly, and we expect to see water transfers, bulk supplies and connections considered against all other options.