Blog Post: Wednesday February 21, 2018

Whatever the structure of the sector, we need more water efficiency

Whatever the structure of the sector, we need more water efficiency

As Cape Town continues its countdown to Day Zero, when taps run dry, through its current restrictions of 50 litres a day per person (we currently use around 150 each…), it’s a timely reminder that this could happen in the UK in our lifetimes if we don’t build greater water efficiency into economic growth. A recent report by trade body Water UK showed that communities right across England and Wales can expect more frequent, more intense and longer droughts in coming decades. And believe it or not, there have already been pockets of drought in Scotland, with Edinburgh being the driest place in the UK in April 2017.


Imagine our economy or society trying to function without water (let alone the natural environment). No school, workplace, transport system or hospital can stay open without it. One estimate of the economic impact of severe drought put it at £1.3bn per day – that estimate is two years old and economies grow rather than shrink, so it’s bound to increase.


And the combination of population growth and reduced supply can be toxic – more people, less water. The good news is, water efficiency can help. The UK water industry has stepped up its work on water efficiency. But building it into policy right across the country means we can make the water we do have go further.


Earlier this month, Shadow Chancellor John McDonnell repeated Labour’s commitment to moving from the current system of private monopoly companies in England and Wales to a network of regional, publicly-owned water companies.  


Other models could include the current Welsh Water model, and national co-operatives. There’s a lot to learn from the experience of the energy sector in Germany on community-owned models. And see this 2015 blog by my Waterwise colleague Aaron Burton on the energy model on the Isle of Eigg and lessons that could be learnt for water.


Any regular readers of my views will know that I’ve praised the scale of ambition on water efficiency in the UK government’s 25 Year Environment Plan for England. Waterwise challenges and supports everyone in the UK to aim higher on water efficiency, and we look forward to drawing on that plan to deliver ambitious water savings, not only working with the industry but also using government levers on planning, housing, products and energy.


But we’re going to need to be more water-efficient whatever the structure of the water sector. So this blog explores what Labour’s new model could deliver in terms of ambitious water savings. And whether under this model, water efficiency could deliver even more for society, the environment and the economy.


Resilience to climate change


Water efficiency can help mitigate climate change as well as adapt to it. Wasting less water in homes and buildings reduces the energy used by the water industry to pump and treat water and wastewater. But it also reduces energy and carbon at the point of use. Under Labour’s plans to remove the profit motive in the water and energy industries, the government could very simply make sure that every home and building in the country was only using and heating the water it needed.


Imagine Company X, delivering water and energy at cost to Region A or City B. When the framework for Company X was created, the incentives wouldn’t be to sell more, but to supply less – only what’s needed, with water and energy efficiency measures and leakage detection at the heart of the service. For every single customer in A or B. There would be no need to convince distant investors who want to see big capital spend – in a world where more flexible approaches, with smaller assets (which could be as small as a smart water and energy meter in one home), are a better fit for the uncertain scenarios and challenges society faces. The impact of this in terms of saved carbon, energy and water should be factored into the cost-benefit analysis for Labour’s plans.


Clear government responsibility for the whole water cycle could also have benefits. Linking surface water management and sustainable drainage with water recycling and re-use is one – managing both floods and drought at community scale. Drainage features could be managed for recreation and amenity on both public and private land, supported by local volunteers. And the proliferation of plans in the water sector – all with different timeframes and associated processes – could all be brought together, bringing significant efficiency savings.


Wider social benefits


And what about tackling homelessness? Labour’s new model for energy and housing could work with a raft of new council housing to ensure that the new homes are not wasting water. And for private developers, the government could simply require them to offset the total new demand of their build via a principle of water neutrality (the current government could do this now, but developers have lobbied against it). We all agree that more homes are needed. But I worry that in the same way that many homes now built in clear flood risk areas are destined for those who can’t afford to live elsewhere, in coming years the same could happen for water-scarce areas, with these becoming a dumping ground for those who can’t afford to live where water is more plentiful. In the UK. It sounds unthinkable but Water UK’s report shows that it’s credible.


Water companies currently have a statutory duty to supply new homes and buildings. Wherever these are built. And without being consulted on the water scarcity in those areas. Under Labour’s new regional model, I would expect publicly-owned water companies to have a seat at the table when regional housing plans are being developed. So homes would be built, but in places that it makes social as well as economic (and environmental) sense to build them.


Sustainable economic growth


Wholesale water companies in England and Wales are under pressure to deliver greater resilience of supply. They’ve done a lot on this already. But a home or building is only as water-efficient as the people you put in it, so we all have a responsibility as individuals to waste less. Water companies can’t deliver this alone. And at Waterwise we’re increasingly worried at the impact on water efficiency of the new water retail market that opened in 2017.


Companies, charities, schools and hospitals can now choose a water retailer to act as their go-between with the wholesale water company actually providing the water. This was supposed to lead to more water efficiency, with the new retailers realising it meant they could offer their customers water, energy, carbon and financial savings. In practice, the response has been patchy (recognising some positive examples), meaning that in some areas water use is actually increasing as wholesalers are no longer permitted to offer these services to schools, hospitals and businesses in their patch, and not all retailers are picking up the challenge. Regional companies acting across the picture, from source to tap, and not driven by a need to make returns for their investors, could work this resilience out in a different way. Not driven by concerns about bills and returns, but by the wider public good only – not this wider public good balanced against returns.


Which leads me to my next point. There are many concerns currently about funding for the NHS, and for schools. A publicly-funded water sector could put reducing public sector water and energy waste, and therefore bills, at the heart of its work. It could be a primary duty on the new water companies. Why not? Water companies currently deliver a public good, and they take this seriously, but their structures complicate it. Publicly-funded regional water companies would be part of a wider public sector conversation about ‘outcomes’- a favourite regulatory word.


What role does a water sector model play in more ambitious water efficiency?


The current water industry model is almost 30 years old. The challenges are different now to then – and more diverse and less certain. Climate change scenarios are just that – scenarios, not predictions. And we’re all going to need to change our behaviour, on water as with plastics and energy use.


I’m not advocating any one model – Waterwise works with anyone and everyone to deliver more water efficiency in the UK. There are opportunities in the current model to drive greater water efficiency in networks, through relationships with customers, and via government policies on planning, housing, product standards and energy. But this blog post seeks to point out that there are opportunities in other models too

– and suggests that water efficiency, for the sake of society, the economy and the environment, can and should be mainlined into both and all approaches. To enable us to meet the social, economic and environmental challenge of climate change.


I worry that otherwise, in the same way that food banks have become more and more widespread, water will be so scarce in coming decades in the UK that it’ll be out of reach for some of us. After all, do we really think the richest echelons of society in Cape Town will be joining the queues with their plastic bottles?

Keywords: drought > international > policy >