Posted: Friday 21st February 2014

The Environmental Industries Commission (EIC) has welcomed changes to the latest draft of the Government’s Water Bill, following its passing of the Commons’ Committee stage.

Following a sustained lobbying campaign by EIC and its member companies, amendments to the Bill have been accepted which will legally require Ofwat to “secure the long-term resilience of water undertakers’ supply systems…including by promoting appropriate long-term planning and investment by relevant undertakers.” In effect, this now provides the water industry’s supply chain with a concrete and legally-binding base from which to hold the Government and the Regulator to account should it fail to address to the damaging effects of the cyclical ‘boom and bust’ investment pattern seen within the industry since its privatisation and the introduction of five-yearly AMP cycles.

Commenting, EIC’s Executive Director Matthew Farrow said:

“EIC has, over many years, led the campaign to end ‘boom and bust’ and see an end to the damaging effects it has on the water industry, including regular and predictable rounds of job losses, the migration of skilled workers to more stable sectors, and difficulties for businesses within the supply chain to manage their staff, workflows and stock efficiently. Successive governments have formally acknowledged the problem of cyclical investment, but a solution to the problem has always been deemed too difficult and the issue kicked into the long grass.

On the back of last year’s Infrastructure UK recommendations report ‘Smoothing investment cycles in the water sector’, and now with Ofwat’s new duty around ‘resilience’ explicitly having to take the supply chain into account, we are beginning to see genuine, tangible progress. But we can not be complacent, as a legal obligation without sanction or recourse in the event of failure can only be so effective, and EIC will continue to monitor the progress of the legislation closely.”

Chris Hoggart, Chair of EIC’s Water Management Working Group and Environmental and Customer Experience Manager at Optimise added:

“True resilience in the water sector requires not only an availability of physical infrastructure, but the ability to deal with extreme events. To design a system resilient to these events requires the experience and expertise of those who have dealt with them previously. Each time there is a regular cycle of redundancies we have seen experienced engineers and scientists leave the industry, and their wisdom leaves with them.

“Extreme occurrences like droughts and flooding are unfortunately happening with increased regularity and severity – at home as well as abroad. A truly resilient water supply chain, free from the effects of boom and bust, would not only be able to utilise a more knowledgeable workforce at home to mitigate these problems, but would be able to export these skills abroad, boosting exports and creating jobs.”

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