Water companies ‘sold off reservoirs that could have eased drought’

·7-min read
Reservoirs - WALES NEWS SERVICE
Reservoirs - WALES NEWS SERVICE

Water companies have sold off reservoirs that could have helped ease drought to housing developers, the former head of Natural England has said.

Dozens of reservoirs across the country have been given up by water companies, while no new ones have been built in the last 30 years.

Writing for The Telegraph, see below, Andrew Sells - who was head of Natural England between 2014 and 2019 - said the sell-off, with no replacements, was evidence of water companies putting profits before water resilience.

Thames Water, Severn Trent and Southern Water are among those to have sold off some of their reservoirs in recent years.

Thames Water, which announced on Tuesday that it would soon bring in a hosepipe ban for its 15 million customers, has sold off 25 reservoirs since the 1980s, according to the GMB Union.

That includes a reservoir at Cheshunt, which it sold in 2006 to developers to build 249 flats after the water company said it was no longer needed, as well as a water storage facility in Enfield, sold to a house builder.

A 2018 document from Southern Water said the company would need to decommission 43 of 93 pre-1900 reservoirs between 2023 and 2030.

In 2015, South West Water sold off a disused plot, including its Kilworthy reservoir - which went for £170,000 - in a bid to cut costs and bills. The plot was advertised as a potential “Grand Designs” project, with planning permission for a house.

Sir John Armitt, the chairman of the National Infrastructure Commission - which has called for more reservoirs to be built - said: “It’s been three decades since the last major supply reservoir was built in England and the situation we are facing this summer indicates what we can expect to happen with increasingly regularity in the future.

“If we want to avoid severe shortages in future, we can’t afford to take our foot off the pedal once the rain comes and this summer becomes a memory.”

Chris Binnie, a water engineer who has advised the Government, said the sold-off reservoirs were often smaller ones connected to local water treatment plants that had been closed partly to save money. “It’s not that economical to keep the small ones going,” he said.

Dr Andy Hughes, a reservoir expert who has advised Thames Water and Southern Water, said companies often kept reservoir facilities but were unable to use the water from them, as they were no longer connected to working treatment facilities.

“Most companies have at least one or two reservoirs that they no longer want,” he said.

Water industry sources said companies faced pressure from Ofwat to close old facilities to save money, as well as scrutiny from the regulator over the financial benefit of opening new ones.

Water companies say they face widespread opposition in building new reservoir facilities, despite a recognition they will be increasingly needed under drier conditions as a result of climate change.

Thames Water has spent more than a decade attempting to construct a £1 billion reservoir to serve more than eight million people in Abingdon, Oxfordshire. The plans were first rejected by the government in 2011 and have been the subject of local opposition.

There are plans for a handful of new reservoirs across the country, but only one - the £100 million Havant Thicket project, near Portsmouth - actually has planning permission.

“We need to make the bureaucratic hoops easier,” said Mr Hughes.

A spokesman for Water UK, the industry body, said reservoirs were “just one of the sources used to supply water to customers”.

The spokesman added: “New reservoirs are subject to lengthy scrutiny from regulators about their near-term need and value for money, as well as planning permission.

“One new reservoir - Havant Thicket – is due to be completed by the end of this decade, and companies have made a further 18 proposals which are under consideration in a new streamlined arrangement introduced by regulators to speed-up and facilitate their decision-making and make it more likely that projects can proceed.”

Companies ‘put short-term profits ahead of long-term water supply’

By Andrew Sells, chairman of Natural England from 2014 to 2019

Fifty years ago, my father had a small business in East Anglia which built lakes, including those at Balmoral and the RSPB headquarters in Bedfordshire.

In the subsequent half a century, many farmers across the country have learned the lessons of droughts in winter as well as summer, and built reservoirs on their land.

At the same time, several of our water companies preferred to build houses on some of their reservoirs (Thames Water refuses to say how many) and last week we learnt that together they have built precisely zero new reservoirs in the last 30 years, despite population growth of about 10 million.

No doubt some reservoirs had reached the end of their working lives - but in abandoning this critical infrastructure, without any replacements, they have again put short-term profits ahead of long-term water supply.

Long before this news came, the water companies were in the politicians’ sights. In January, the environmental audit committee found that a “chemical cocktail” of sewage, agricultural waste, plastic and persistent chemicals was polluting our rivers and concluded that “the public are rightly shocked when they discover that untreated or partially treated sewage is dumped into rivers”.

A separate investigation found that Southern Water “deliberately poured sewage into the sea to avoid financial penalties and the cost of upgrading and maintaining infrastructure”. The company was fined £90 million – thus reducing its capital available for investment, putting pressure on customers’ bills and taking the company nearer to bankruptcy.

The Southern Water case hit a new low, because the judge concluded that the company covered up its actions by “very significant under-reporting of illegal spills and cooperation was grudging, partial and inadequate”.

The environmental audit committee found that the chief executive of Severn Trent was “disingenuous” when responding to their questions. Yet no director of a water company, as far as I know, has been fined or sanctioned.

Equally culpable, and perhaps more so, are those who regulate the water companies - in particular Ofwat and the Environment Agency.

The former has allowed the water companies over the last 20 years to borrow unsustainable levels of debt, while paying out excessive dividends to shareholders rather than invest in capital equipment (for the moment ignoring excessive executive pay and bonuses). Ofwat’s financial resilience review is far too little, too late.

The Environment Agency has failed to enforce the law about dumping raw or partially treated sewage into our rivers - so sewage is abundant in many rivers, often when there is no “storm overflow” excuse.

Whether privatisation was a good idea or not is for historians to decide, but what is clear is that the subsequent regulation of the water industry has been a disaster. With masterly understatement, the environmental audit committee concluded that “public confidence in the regulatory structures is understandably low”.

Increasingly, the public cares about nature, the environment, the state of our rivers and the supply of water. In many ways, this government has a good record. These are not new problems but long-standing issues which have not been tackled by successive governments and are being highlighted by a hot summer.

Five years ago I tried, as chairman of Natural England, to stop a large salad washing plant from polluting the River Test. I met a brick wall of resistance, until I eventually discovered that the Environment Agency had issued a permit consenting to this pollution - now ceased, I am pleased to say.

The River Wye is in a terrible state, largely thanks  - or, more accurately, no thanks - to farming activities upstream. Many of our unique chalk streams are in a dire state and abstraction levels are at unsustainable levels.

What is to be done? I have been urging ministers to establish a body, independent of Ofwat and the Environment Agency, to take a fundamental look at the regulation of the water companies and a longer term strategic look at our water industry.

If I had the chance to put one question to a Rishi Sunak-Liz Truss debate, it would be: will you please commit to set up an independent inquiry into the water and sewerage industries, their regulation and the long-term strategic needs of the country?

Transparency of data is critical to effective regulation. Without the voluntary work of some dedicated citizen scientists, we would not be aware of half of our problems. One immediate step we could take would be to ensure that such groups are properly funded by the water companies in their area and ensure that their evidence is scientifically defensible and admissible.

The defence of the nation is often quoted as the supreme duty of government. Keeping its people fed and watered seems just as important.