Water Industry (Schemes for Adoption of Private Sewers) Regulations 2011

Lord Knight of Weymouth Excerpts

Tuesday 17th May 2011 Grand Committee

[Lord De Mauley]

My Lords, I welcome the opportunity to introduce these draft regulations to your Lordships. Their purpose is to effect the transfer of private sewers and lateral drains to the statutory water and sewerage companies. Under similar arrangements, sewers constructed prior to October 1937 were, under the Public Health Act 1936, automatically adopted as public sewers and are maintained by the water and sewerage companies. However, since then adoption has been undertaken on a voluntary basis. While it was the likely intention of the 1936 Act and subsequent legislation that sewers should be adopted, for various reasons that has not happened on a universal basis. Even where adoption agreements were reached and new sewers constructed to the requisite standards, the adoption process was not always followed through.

The result is a legacy of unadopted private sewers and drains that has accumulated since 1937. Very often, the owners of these assets—typically householders—are unaware of their responsibilities and liabilities. The repair and maintenance of private sewers can be very expensive for individual householders. Where drainage arrangements are shared, it can be difficult to recover costs from those who use the sewers but are unaffected by any problems. Private sewers may run beneath a neighbour’s land or a highway, such that access is both difficult and costly.

While many private sewers function satisfactorily, the disparate ownership of these assets, which are essential to everyday life and important to public health, means that they are not always maintained in an economic and integrated way to a consistent, high standard. Many of us are aware of examples of persistent sewerage problems that require attention. In addition, there is the inequity that private sewer owners pay not only for the maintenance of their sewers but also, through their sewerage charges, for the upkeep of pre-1937 sewers, which are maintained by the water and sewerage companies. The transfer proposed in the regulations will place the owners of post-1937 private sewers on a similar footing to those with pre-1937 sewers. Successive consultations have concluded that an overnight transfer to the water and sewerage companies is the preferred approach.

Not all sewers will be transferred. Those which carry only surface water and do not discharge to a public sewer will not be transferred. The same will apply to sewerage systems that serve a single, centrally managed site or cartilage, as for example might be the case with a shopping mall or industrial estate. Systems that drain to private treatment facilities or to septic tanks and the like are also excluded.

Action is necessary to redress the failures of the 1936 Act. The objective is to ensure better maintenance of what are currently private sewers, resulting in less environmental pollution, the minimising of threats to public health, fewer complaints from householders and businesses about what is perceived to be a costly and unfair burden, and fewer disputes requiring local authority intervention. In the longer term, an integrated approach will achieve a better managed sewerage system that will have lower maintenance costs and will be more resilient and effective. The water and sewerage companies which already have a sewer maintenance capability are well placed to take this on.

The impact assessment estimates that additional costs will add to water bills an average of £5 per annum from 2011, rising to £8 per annum by 2019, with a range from £3 to £14 across the companies. While increases in charges can never be welcome, at up to a little over £1 a month, these relatively modest annual increases are to be preferred to a system in which costs fall unequally across water charge payers or unfairly on individuals. Overall, they represent a sound investment in the future maintenance of essential assets. The transfer exercise does not itself trigger major expenditure on those parts of the system that are currently working satisfactorily; it will be for the water and sewerage companies to assess and prioritise what is essential short-term maintenance, repair or replacement.

The draft regulations provide, at Regulation 3, for the Secretary of State and Welsh Ministers to make schemes for the transfer of private sewers and private lateral drains to the statutory water and sewerage undertakers. Sewers are defined as all drains that are shared. Lateral drains are those which serve a single property but lie outside the boundary of that property. Pumping stations which form part of the system will also be transferred. In order to qualify for transfer, private sewers and lateral drains must be connected to the public system on 1 July 2011. The transfer itself will take place on 1 October 2011, with the exception of pumping stations, which may be transferred individually or in groups at any time before 1 October 2016. As I have said, sewers and related equipment that carry surface water only and do not discharge to a public sewer will not be transferred. Sewers constructed after 1 October will be the subject of separate proposals for mandatory adoption arrangements that are not under consideration today, but which should be the subject of consultation shortly.

Regulation 4 makes provision for the Secretary of State and Welsh Ministers to make supplementary schemes for transfer. Private sewers and lateral drains which are connected to a public sewer between 1 July and the commencement of Section 42 of the Floods and Water Management Act 2010, currently planned for 1 October 2011, will neither qualify for transfer on 1 July nor be subject to new-build arrangements for adoption which will be effective upon commencement of Section 42. Unfortunately, it was not possible to synchronise the dates: therefore it is necessary to introduce a supplementary transfer scheme to cater for sewers connected between these dates. Supplementary transfer is planned for 1 April 2012.

Regulation 5 makes provision for certain exemptions, including for railway land which would present operational difficulties for water and sewerage companies, and for Crown land, where the arrangement is for sewers to be transferred unless relevant land is “opted out” of transfer. Regulation 6 makes provision for sewerage undertakers to make a declaration to vest private sewers by publishing notice in the London Gazette and the local press, and by sending individual notices to the owners of private sewers. Regulation 7 provides that where there are existing declarations, the provisions of the regulations shall not apply. Regulations 8 and 9 provide that outstanding appeals will be discontinued and that Section 104 adoption agreements that have been executed will cease. Where a sewer remains to be built or connected, a Section 104 agreement will remain valid. Existing legislation provides for a right of appeal to Ofwat against transfer of assets for both the owners of private sewers and third parties through whose land a drain may pass or who may be disadvantaged by the transfer.

Finally, the regulations are relatively short-lived in that they are subject to a sunset clause effective in 2016. They provide for a once-and-for-all transfer of private sewers, lateral drains and associated private pumping stations. Once the transfer is complete, by 2016 for pumping stations, the regulations will serve no further purpose and will be repealed automatically. I hope that noble Lords will accept them.

[Lord Knight of Weymouth]

My Lords, I apologise that I was not here for the opening of the Minister’s speech. I had not been made aware that today’s running order had changed, and I worked off the business papers rather than today’s list. It is just one of those things.

I should say at the outset that we very much welcome the regulations. They reflect the work that we did in government. If you are one of those people who live on an estate with private sewers and you are impatient for them to be adopted by the sewerage undertaker, you might be asking why it has taken so long. We had a consultation in 2003, another one in 2007, a third one in August last year, and now finally we have the legislation needed for this to take effect from October this year.

Certainly some of my former constituents in Shepherd’s Croft in Portland will be delighted. They live in former prison officers’ accommodation where the Crown used to be the owner of the estate and the housing. They are responsible for the sewerage, which was never brought up to the standard at which the water company was willing to take it on. There remained a whole series of problems about who would pay, the Crown or the residents, when sewage was bubbling up in people’s gardens. I do not think any of us wants to see that. It will be a relief to them and to many others around the country that a way forward has now been found. That very much informs my fulsome support for what is being done here.

I have a couple of questions for the Minister. I have read the accompanying papers, which are very helpful and complete. Indeed, the completeness is probably the reason why I might not have grasped some of the detail. Once I got on to the latter pages, the details might have passed me by, and I can only apologise if my questions are answered in the detail. It appears that over the long term there are good net benefits to be had from making this change. My reading was that after 32 years the net benefit would start to accrue. Obviously that is welcome, but it is important to ask about the short-term costs being borne by the sewerage undertakers. If my reading of the notes is right, the costs are around £1 billion which then has to be absorbed by customers because ultimately the sewerage undertakers, the water companies, will seek to recoup those costs from their customers. The analysis shows that the cost to individual customers of recouping them would be between £3 and £14 per annum.

I am interested in finding out more about how that might break down. I know that this is difficult to anticipate, but I am sure that the department will be in communication with Ofwat about how this is going to be regulated to ensure that customers are treated fairly. For example, it will be interesting to know the difference between business customers and domestic customers. In the announcements that have been made about South West Water customers, and how their situation might be improved given the high water bills paid by domestic users in that region, there is a proposal that business customers should pay more so that domestic customers pay less. That raises a legitimate question not only for the water companies, the sewerage undertakers, but also for businesses across the country about whether they will be the ones asked to pay the bulk of the costs of dealing with the legacy of private sewerage and drainage systems. Alternatively, will they be applied evenly across domestic customers as well?

There is a also question about whether the geographic distribution of these costs will be evenly spread or whether, because of regional variation—in the case of the south-west, the large extent of the coast and the cost of sewerage treatment in that area is high—each undertaker will have effectively to wash their face. Questions will be raised with regard to South West Water in particular, which I know has been very active given the Walker report and other things. Will South West Water’s customers end up losing the benefit of the announcement made by the Chancellor in the Budget if they have to pay extra costs because of the particular liabilities in that region?

My only other question concerns the exemption in Clause 5 of the statutory instrument for private sewers and exempt private lateral drains on Crown land. This goes back to my experience as a constituency MP in Dorset, where prison officers’ houses were built on Crown Estate land and subsequently have been sold on. Where the lease to such properties has been passed on but the freehold remains in Crown ownership, will homes in those circumstances be exempt from this transfer because they are on Crown land or will the transfer go ahead, allowing them to benefit from the sewers being maintained and the possibility of the roads then being adopted as well? I know that this is a big issue for some residents. Having made those comments, I am happy to support the regulations.