Draft Strategic Policy Statement a missed opportunity to address the long-term challenges facing England’s water sector

The Government’s draft Strategic Policy Statement (SPS) is a ‘missed opportunity’ to ensure that the water industry can make significant progress before the end of the decade in addressing the many long-term challenges it faces, such as responding to the climate crisis, a growing population and improving the health of our rivers, according to trade body Water UK.

Water UK welcomed the focus in the draft SPS on the long-term but called for clearer direction from the Government. Water UK calls for the Price Review, carried out by the economic regulator Ofwat, to ensure that investment decisions put the industry on the right track to meet Government targets on net zero, ensuring that water supplies are resilient to climate change, and ambitious environmental improvements.

Without this, Water UK warns that the 2020s could be a ‘wasted decade’ and meeting the Government’s targets would ultimately cost customers more – or they may not be met at all. The lack of concrete direction in the SPS to meet these targets is described as ‘incomprehensible’ and contrasts sharply with Government’s stated intent and rhetoric.

Elsewhere, Water UK criticised the draft SPS for not making proper use of the provisions made by Parliament for Government to set a strategic direction to Ofwat. The failure to do so was described as ‘negligent’ in the response.

Water UK is also calling for the Government to show greater ambition in transforming how investments are made, by setting a ‘natural by default’ presumption that catchment or nature-based solutions are used unless alternative approaches provide better long-term value to customers and environment or are legally required.

There also needs to be a greater role for Parliament in ensuring accountability and transparency in Ofwat’s decision-making. Ofwat should be required to explain to Parliament how the decisions they take put the industry on the right track to meet Government targets.

Responding to the draft statement, Christine McGourty, Water UK Chief Executive said:

“The Climate Emergency means that water companies will need to invest more to ensure resilient supplies to keep the taps running for future generations and meet their ambitious Net Zero 2030 target.

“The time to act is now, so we are calling for the Government to be bold and ambitious in its Strategic Policy Statement, to ensure the sector can make the investment needed to meet all the challenges head-on, while also ensuring that customers who are struggling to pay get the help they need. We simply cannot allow the 2020s to be a wasted decade.”

 The full response is available on the Water UK website here.