The ongoing pollution of our rivers by sewage is a topic of great concern, as are the roughly equal contributions of agriculture and urban runoff. Well done to Fergal Sharkey, Wildfish, The Rivers Trust and others for shouting from the rooftops and for highlighting the issue and finally getting it firmly on the agenda of government and regulators. The time has come to work with everyone involved to develop practical, affordable solutions to a growing challenge. We need to understand the issues and work together if we are to fix our rivers.
So this piece is not an apologia for the water companies, nor the Environment Agency, nor Ofwat, nor government – all of whom have some responsibility to bear for the current situation. More, it is an attempt to stimulate a broader understanding of, and a discussion about the solutions to, what is now accepted by everyone as a significant problem. Nor is it a detailed technical analysis, it is a set of observations based on nearly 50 years working in the water sector in various guises. You should also note that although the water companies abstract, treat and deliver our drinking water this issue is not going to be addressed in this piece, other than by comparing the regulatory environment for drinking water with that for sewage treatment – there are glaring differences.
I am going to talk about four issues:
- The source of the problem
- Regulation
- Solutions
- Financing and the ownership of water (companies)
The source of the problem
Obviously it is more sewage than our systems can cope with, that much is commonly accepted. What is far from clear is whether the problem is actually worse and, if so, how much worse, than 10 or 20 years ago before the lobbyists and the media got the issue onto a wider agenda.
Since Victorian times, our sewerage and sewage treatment systems have recognised that when it rains the flow in the sewers increases until it reaches a point where the sewers (which were substantially over-designed by Victorian engineers who did not have the constraints of today’s engineers) cannot cope. In order to avoid flooding our streets, houses and sewage works the excess flow is discharged into rivers -which, at least in theory, will themselves have risen by then and able to accept the diluted sewage with no long term ill effect. The circumstances (flow rates) at which those discharges occur were set, and then engineering designed, using the best knowledge and expectations of the day. So discharges from sewers and sewage works are far from new.
These were days when the public, rightly or wrongly, trusted scientists and engineers to make the right decisions on behalf of society. But things have changed. ‘Back in the day’ many of our rivers were so polluted that few people would dream of swimming in them; the conditions attached to consents to discharge treated sewage were designed with river ecology in mind, not bacteriological contamination; the chemicals associated with things like nonstick pans, fireproof carpets and sofas etc did not even exist, we did not put wet wipes down the toilet (they didn’t exist) but it and we recycled our milk bottles because we didn’t have plastics to use in their place. It was a different time with different technology and different societal expectations. What was known and what was acceptable then has changed.
Has the size of sewers and sewage works kept up with the growth of populations? I don’t know, but I do know that ‘we’ used to design them for expected populations many years ahead. That led to an interesting paradox. Those systems effectively ‘over-performed’ because in their early days they were under loaded. As the load on the sewers and sewage works increased, the performance would deteriorate until it reached the design criteria.
I would argue that something much more significant has changed, namely public expectations. When I started my career in the environmental sector 50 years ago, it was a niche topic talked about and acted on by a handful of interested specialists. Over the last 25 years, many aspects of the environment have become mainstream issues and society’s expectations have increased substantially. What was acceptable in 1973 his certainly not in 2023. The publication of sewer overflow data and the pretty(?) maps showing the scale of the issue has brought this to the attention of the public. The acknowledged problems, allegedly largely to do with chicken farming, on the Wye have been well publicised, and the problems on Feargal Sharkey’s beloved chalk streams are real and of concern albeit not generalisable in the way he has done. Nonetheless, all of these examples hit the media with increasing frequency and raise the public’s awareness and concern, legitimate or otherwise, about our rivers. No surprise then that what was considered acceptable, perhaps even best practice, in Victorian times or even 20 years ago will no longer meet public expectations
Regulation
There does appear to be a growing recognition that, apart from anything else, there has been a major failure of regulation that has made a significant contribution so where we are now. So how does regulation of the water industry (not) work?
Every five years the industry basically does a deal, known as the Periodic Review (of prices) that sets the maximum amount the companies can charge customers in exchange for delivering a long series of maintenance requirements and improvements (known as AMP/WINEP[1]) to the environment. The calculations also involve setting a rate of return on investment for shareholders; if you put your money in the bank then you expect some interest back on it, consider dividends (as either a shareholder or a loan provider) to be the equivalent of that interest. The environmental improvements required are ultimately dictated by the Environment Agency, although they themselves receive ‘guidance’ from Defra about those requirements in the light of early estimates of the potential cost. So Government has their fingers in the pie from the very beginning.
I have been involved, to a greater or lesser degree, in all 8 Periodic Reviews to date and recall that on every occasion the EA wanted to do more and the Companies wanted to do more than Defra/Ofwat would allow. Indeed the customer ‘Willingness to pay’ surveys conducted as part of the PR process generally showed that customers were prepared to pay more for these improvements. I recall, back when I was negotiating the water quality requirements for the 1999 Periodic Review, trying to persuade Defra and the regulators to commit more investment to sewer overflows – we knew back then that there was an emerging problem. But no, they either could not or would not understand the issue and were certainly not willing to allow for expenditure on them while there were other more pressing problems to deal with.
Let’s remember that, whatever it might say in the legal documents that created it, Ofwat’s primary focus has always been on keeping bills low and the Environment Agency has been a puppet of government rather than the brave voice for the environment that we all welcomed when it was set up. The arm of the EA responsible for environmental protection has been stripped bare by cut after cut after cut and whilst there are good people doing their best working in the EA they are demoralised by the lack of resources to do the job they want to do.
Without good regulation, any organisation is likely to skip around the edges of the rules potentially leading to bigger and bigger problems – remember the banking collapse?!
The answer? Re-fund the EA with a clear brief to be the voice of the environment, enable them to overtly criticise Government when they take small or large actions to the detriment of the environment; equip them with resources to properly monitor the state of our rivers and the discharges into them. It is a fact that the data underpinning the quality designations of many of our rivers is miserably poor in quantity, and it’s those designations that ultimately drive investment.
And this is where I want to make a brief passing reference to drinking water. That side of the water industry is regulated by the Drinking Water Inspectorate, a body with around 50 employees, has a key role in ensuring that our drinking water is safe. They operate a self-monitoring regime (yes, the companies take and analyse their own samples) which as never been subject to question and which has underpinned a dramatic improvement in the quality of our water for many years. The quality of our tapwater is rarely questioned,, so what can we on the ‘dirty’ side of the business learn from how DWI operates and the culture that underlies that continuous improvement in the quality of tapwater since privatisation?
Solutions
Reading my Twitter feed, and following this whole saga for the last couple of years, I see that the proponents in current court cases are asking for, no ‘demanding’, an ‘immediate’ halt to discharges. They are misleading their supporters. With all of my 50 years’ experience, I cannot think of a way to stop these discharges ‘immediately’. Their supporters face disappointment even if the judges find in their favour. I read irresponsible talk from those who propose to ‘block the pipes’ – what will that achieve other than flooding sewage into ‘Mrs Jones’ house and I can’t imagine that helping their cause.
I don’t propose to delineate a technical resolution here, just to note that there are solutions, both traditional (lots of concrete!) and more interesting and novel such as nature-based approaches but these cannot be delivered overnight, and it’s only fair to point out that they do not come for free.
These solutions can, and should, take account of all of the pressures and opportunities in a river catchment, Integrated Catchment Management is not a new idea but one which seeks a re-birth and more support from regulators and government. Good NBS can help address multiple issues (remember at the top I spoke about the triple pressures on our rivers – agriculture, urban runoff and sewage?). Just imagine what we could achieve if the parties responsible for various sources of pollution came together with environmentalists to seek the best overall solution for the catchment. I don’t believe in miracles, but I do believe that well co-ordinated collaborative action might get us close to one. Read more about the existing Catchment Based Approach here https://catchmentbasedapproach.org/
Financing and the ownership of water (companies)
If we start from the acceptance that, whatever the solutions are, they will need paying for then we inevitably come up against the question of who will pay. The headlines could lead us anywhere “stop Director’s bonuses”, “reduce director’s pay”, “stop paying dividends”, “shareholders must pay”, “we have paid for this already, we should not have to pay again”, “anyone but customers” are typical refrains – and I’m not going there, because it’s above my paygrade. As is the structure of the water sector, but I do have some thoughts on that which might inform your debate about this latter question.
Some of us can remember 1974, when treatment of water and sewage was taken out of the hands of the local authorities and placed with newly formed Water Authorities. In the hands of the local authorities these services had been the forgotten cousin and had received almost no investment and were almost entirely unregulated in practise. The water authorities were supposed to change this and, to some extent they did although they were not able to find the level of investment necessary to bring our rivers up to the emerging standards required at that time and, most specifically, by the various European directives coming into force. Eventually a combination of political ideology and a recognition of the potential cost of bringing things up to scratch led to privatisation, with the new water companies being able to raise finance in ways that were not possible to the old water authorities and would not show on the public sector borrowing requirement (which was as big an issue then as it is now).
Many would argue that the current model with water companies being commercial businesses who, like many other businesses, operate within and on the boundaries of strong regulation has effectively failed. It is a truism that “regulators are always likely to be outwitted, if not captured, by the profit-driven businesses they are trying to curb”. There is a revolving door of staff between Ofwat and the water companies and let’s not forget that the Chairman of Ofwat for the last decade was formerly the head honcho at Yorkshire and Anglian! We have seen this before with the banks, where everything was fine until it wasn’t and the final analysis declared a failure of regulation.
So what other models might we consider? The commercial model has failed, the nationalised model (in one form or another) was unable to finance the necessary improvements, so what next?
Welsh Water (Dwr Cyrmu) had a chequered history before it finally settled as a not-for-profit company financed by debt and retained surpluses/profits. It has no shareholders and is run for public benefit.
Liv Garfield has recently proposed what might be a new form of company along similar lines.
A recent article in the FT offers helpful insights into the challenges and anything written by Dieter Helm on this topic is well worth reading.
Whilst water IS, inevitably, a regional monopoly and probably not suited to a full-scale for-profit model, the one thing on which all commentators except the political idealogues agree is that re-nationalisation would not help solve the problem.
Geoff Roberts has worked on improving the rivers of Yorkshire, and the Aire in particular, since he started with Yorkshire Water in 1974 where he rose “not quite to board level” representing the company with EA, DWI, HSE and had the ‘environment’ brief for the Kelda Group (YW’s parent company). More recently he has been a trustee of The Aire Rivers Trust sine 2013 and Chairman of the Trust for the last six years. He is passionate about getting our communities to love their rivers again.
[1] Asset Management Plan/Water Industry National Environment Programme
