Waterwise policy update - April 2010 Print
Since March 2009 there has been a vast amount of policy and regulatory activity on water efficiency, and on other issues which provide the potential to take water efficiency further, across the UK. Waterwise has been active in these policy and regulatory discussions, and continues to help drive the agenda. Waterwise is recognised as the leading UK authority on water efficiency and our advice and opinions are regularly sought by policy-makers. Waterwise has been working with governments (including at local level), regulators, elected representatives and opposition parties to drive policy and regulatory change towards mainstreaming water efficiency.

Water efficiency remains unique in that it is a key tool for the UK both in tackling climate change and adapting to it.

Water efficiency is essential for mitigation, because of the carbon costs of heating water in homes, buildings and offices for cooking, bathing and cleaning (in homes this accounts for five percent of the UK’s total greenhouse gas emissions), and for industrial processes. Wasting less hot water reduces the carbon footprint at the user end, but it also does so at the supplier end, as the water company is required to pump and treat less water and wastewater. So water efficiency can make significant, quantified contributions to the UK’s carbon targets of 80 percent by 2050 and 34 percent by 2020.

Water efficiency is also essential to the UK’s climate change adaptation plans – every sector of the economy is dependent on water, some areas of the UK are already suffering water stress (with some in England classified by the Environment Agency as under serious water stress), and it is known that in the near future there is going to be less water and more people in the UK. Demographic changes which mean that much of the new housing will be built in water-stressed areas, and an increase in single-person households which use more water per head, will exacerbate this impact. So less water will need to go further – through water efficiency.

Waterwise work

In the last year Waterwise has taken this agenda forward in part through its UK manifesto – published in April 2009, this has been a useful tool for discussion with policymakers and politicians in the run-up to the imminent general election. Phase II of our Evidence Base for Large-scale Water Efficiency in Homes is well underway, and its first report, published in February 2010, analysed nine large-scale water efficiency projects, based on an improved methodology, a comparison of actual and measured savings, and quantified water, energy and carbon savings, and cost-benefit analysis, for a range of measures, projects, and partnership retrofitting scenarios. As part of the Evidence Base, Waterwise also published an updated Best Practice Guide to Water Efficiency Retrofitting, which includes the use of the Carbon Emissions Reduction Target (CERT) scheme to help fund retrofitting programmes.

Waterwise (now jointly with Waterwatch Scotland) held the fifth meeting of the Saving Water in Scotland Network Roundtable, attended by the Scottish Climate Change and Water Minister, Stewart Stevenson MSP, and Scottish Labour's spokesperson on the Environment, Rural Affairs and Climate Change, Sarah Boyack MSP: discussions focussed on how to build on the links between water and energy, in housing and industry.

Waterwise continues to play a key role in the Blueprint for Water coalition of NGOs in England, and its discussions with the Minister and Parliamentarians.

Waterwise continues its high-level discussions with Ministers and officials across government departments dealing with water, energy, housing and finance, and with opposition spokespeople and backbenchers, and its practice of responding to government consultations and submitting written evidence to Select Committees.

At a Waterwise event for water companies at the House of Commons in October, UK Water Minister (for England) Huw Irranca-Davies MP, said that “Defra enjoys a strong and positive working relationship with Waterwise, and I am glad to support the valuable work they are doing on promoting water efficiency.” He went on to single out seven areas of Waterwise’s work for particular praise. Scottish Water Minister Stewart Stevenson MSP has also been very supportive of Waterwise.

Policy and regulatory developments

Since the last March 2009 there has been a vast amount of policy and regulatory activity on water efficiency, and on other issues which provide the potential to take water efficiency further, across the UK.

The final determinations for PR09 for 2010 to 2015 in November 2009 for England and Wales approved funding for six large-scale water efficiency schemes and the introduction of water efficiency targets and the revenue correction mechanism. This represented significant progress, and Waterwise’s Evidence Base for Large-scale Water Efficiency in Homes was widely-praised for its contribution to the process, by water companies and Ofwat (Phase II of the Evidence Base includes an improved methodology, and measured carbon and energy savings as well as water). The Water Industry Commission’s price determination for Scottish Water for 2010 to 2015 included funding for the first ever trial of domestic water metering. The Water Resource Management Plan process has also played an important role in driving water efficiency.

Two independent reviews set up by the UK and Welsh assembly Governments to drive water policy in England and Wales reported in this year – the Cave Report on Competition and Innovation in Water Markets in April 2009, and the Walker Report on Charging for Household Water and Sewerage Services in December 2009. Both reports recommended that the full, long-term value of water be reflected in the regulatory framework – governments and political parties have welcomed both reports and committed to water legislation following the general election. Waterwise worked particularly with the Walker Review team, and the final report reflected many longstanding Waterwise policy positions, such as including water efficiency in government energy efficiency retrofitting schemes, addressing the bias towards capital expenditure which acts as a disincentive to larger-scale water efficiency (despite Ofwat’s welcome revenue correction mechanism, as this will only come into force every five years), and that a smart metering group be set up by Ofwat to link in with the plans for smart energy meters in every homes in Britain.

The Walker Report also recommends a national education strategy to influence behaviour change, with Waterwise as one of the two “favourites” recommended by stakeholders to run this, and a review of current water efficiency labelling schemes, with Waterwise and the Bathroom Manufacturers Association working closely with government and other key players, including in the private sector. Finally, Walker recommends requiring water companies to meter where a wider cost-benefit analysis is positive – based on a new methodology which includes the full, long-term value of water and scarcity – and says that this should lead to 80 percent metering in England and 65 percent in Wales by 2020.

The House of Commons Select Committee on Environment, Food and Rural Affairs, in its report on PR09 (July 2009) recommended a fundamental review of the role of Ofwat, with the value of water at its core, and reflecting a renewed emphasis on water efficiency and water demand management (including in the context of competition).

The Floods and Water Management Bill (in the UK Parliament at the time of writing, and expected to gain Royal Assent before the 2010 General Election), contains one measure on water efficiency – updating the 50-year old hosepipe ban restrictions.

No new regulatory measures have been set in place to drive water efficiency in existing homes in England, Wales or Scotland in the last year. Because of economic pressures on the housing market, plans to make the Code for Sustainable Homes in England mandatory for all housing from 2010 at Level 3 (105 litres per person per day) have been restricted to the energy efficiency measures only. However, the first ever introduction of water efficiency into Building Regulations for England and Wales is due to come into force in April.

In Scotland, the government’s energy efficiency action plan makes the link between water and energy efficiency, and the Scottish Climate Change Act includes not only the new water efficiency duty for Scottish Water but also a provision to mandate water efficiency in Scottish Building Regulations at a later date.

Waterwise has played a role in all of these developments.

Remaining challenges

Government policy in England and Wales has strengthened the regulatory framework for water efficiency in new homes in recent years, but these measures are still bedding down, and existing homes remain a bigger challenge.

Despite government moves to allow compulsory metering in water-stressed areas in England, and water company plans to move to 50 percent metering in England and Wales by 2015 (57 percent in areas of serious water stress), there has been no wider government commitment to full metering in England. In Scotland the first domestic metering trial has been funded in the price determination for 2010 to 2015, but neither the Scottish nor Welsh governments is committed to full metering.

While the UK water companies are taking forward significantly larger water efficiency programmes than a few years ago, representing innovation, including as a result of Waterwise’s widely-praised Evidence Base for Large-scale Water Efficiency in Homes, this still accounts for a tiny proportion of their expenditure when compared with supply-side measures. There remains a lack of incentive for larger-scale water efficiency in the regulatory framework in England and Wales for water. In Scotland the process is now beginning, through Scottish Water’s new water efficiency duty.

Water efficiency is far from mainstreamed across the economy and government policy in the UK. Opportunities to include it in policies, schemes and incentives such as those relating to the development of the low-carbon economy, and in national energy efficiency retrofitting schemes, have rarely to date been taken up. Developing the UK manufacturing base for water-efficient products is a significant opportunity for the UK’s low carbon economy, as are jobs from joint water and energy retrofitting schemes, but these are not factored into current government strategies.

Finally, adaptation policies still do not mainstream water efficiency in all cases – flood risk management often dominates adaptation, but water efficiency needs to be equally considered by all organisations, and governments.

Waterwise policy priorities

Waterwise will continue to work with all governments, regulators and elected representatives in the UK, including at local level. Our priorities will continue to be:
• Reflecting the full value of water in the regulatory framework
• Ensuring greater water efficiency in existing homes, through product standards, labelling, behaviour change, retrofitting, fiscal and financial incentives, social housing standards, water neutrality and other measures
• Incentivising greater water efficiency by non-domestic users of water, including both the public and private sector, through procurement, incentives and other measures
• Ensuring that water efficiency is factored into climate change adaptation policies and strategies, and those to meet carbon targets and develop the UK low carbon economy
• A clear road-map to full water metering
• Driving the regulatory and wider agenda for water efficiency in new homes and buildings

Waterwise will seek to further develop its activity on the Northern Irish policy and regulatory agenda in the coming year.