Water supply and sanitation in England and Wales

England England England is a country that is part of the United Kingdom. It shares land borders with Scotland to the north and Wales to the west; the Irish Sea is to the north west, the Celtic Sea to the south west, with the North Sea to the east and the English Channel to the south separating it from continental... and Wales Wales Wales is a country that is part of the United Kingdom and the island of Great Britain, bordered by England to its east and the Atlantic Ocean and Irish Sea to its west. It has a population of three million, and a total area of 20,779 km²... : Water and Sanitation

}
}}
|-
! style="text-align:center; background:lightblue;" colspan="3"|Data
|-
! style="text-align:left; vertical-align:top;"|Water coverage (broad definition)
|valign="top"| 100%
|-
! style="text-align:left; vertical-align:top;"|Sanitation coverage (broad definition)
|valign="top"| 100%
|-
! style="text-align:left; vertical-align:top;"|Continuity of supply (%)
|valign="top"| 100%
|-
! style="text-align:left; vertical-align:top;"|Average urban water use (litre/capita/day)
|valign="top"| 145 (2008–09)
|-
! style="text-align:left; vertical-align:top;"|Average urban domestic water and sewer bill for 20m3
|valign="top"| £27.5/month (2008–09)
|-
! style="text-align:left; vertical-align:top;"|Share of household metering
|valign="top"| 33% (2008)
|-
! style="text-align:left; vertical-align:top;"|Non-revenue water

Non-revenue water

Non revenue water is water that has been produced and is “lost” before it reaches the customer. Losses can be real losses or apparent losses . High levels of NRW are detrimental to the financial viability of water utilities, as well to the quality of water itself...

|valign="top"| 19%
|-
! style="text-align:left; vertical-align:top;"|Share of collected waste water treated
|valign="top"| 100%
|-
! style="text-align:left; vertical-align:top;"|Annual investment in WSS
|valign="top"| £61/capita (2000-2005 average)
|-
! style="text-align:left; vertical-align:top;"|Share of self-financing by utilities
|valign="top"| 100%
|-
! style="text-align:left; vertical-align:top;"|Share of tax-financing
|valign="top"| 0%
|-
! style="text-align:left; vertical-align:top;"|Share of external financing
|valign="top"| 0%
|-
! style="text-align:center; background:lightblue;" colspan="3"|Institutions
|-
! style="text-align:left; vertical-align:top;"|Decentralization to municipalities
|valign="top"| No
|-
! style="text-align:left; vertical-align:top;"|National water and sanitation company
|valign="top"| None
|-
! style="text-align:left; vertical-align:top;"|Water and sanitation regulator
|valign="top"| Yes (since 1989)
|-
! style="text-align:left; vertical-align:top;"|Responsibility for policy setting
|valign="top"|
|-
! style="text-align:left; vertical-align:top;"|Sector law
|valign="top"| None
|-
! style="text-align:left; vertical-align:top;"|Number of service providers
|valign="top"| 28
|}
Public water supply

Water supply

Water supply is the provision of water by public utilities, commercial organisations, community endeavours or by individuals, usually via a system of pumps and pipes...

and sanitation

Sanitation

Sanitation is the hygienic means of promoting health through prevention of human contact with the hazards of wastes. Hazards can be either physical, microbiological, biological or chemical agents of disease. Wastes that can cause health problems are human and animal feces, solid wastes, domestic...

in the England

England

England is a country that is part of the United Kingdom. It shares land borders with Scotland to the north and Wales to the west; the Irish Sea is to the north west, the Celtic Sea to the south west, with the North Sea to the east and the English Channel to the south separating it from continental...

and Wales

Wales

Wales is a country that is part of the United Kingdom and the island of Great Britain, bordered by England to its east and the Atlantic Ocean and Irish Sea to its west. It has a population of three million, and a total area of 20,779 km²...

has been characterized by universal access and generally good service quality. Salient features of the sector in the United Kingdom compared to other developed countries is the full privatization

Privatization

Privatization is the incidence or process of transferring ownership of a business, enterprise, agency or public service from the public sector to the private sector or to private non-profit organizations...

of service provision and the pioneering of independent economic regulation in the sector in Europe. There has been a substantial increase in real tariffs between 1989 and 2005, whilst independent assessments place the cost of water provision in the UK as higher than most other major countries in the EU. The government body responsible for water regulation, together with the water companies, have claimed improvements in service quality during the same period.

Water resources and uses

On average, only about 10 per cent of freshwater resources in England and Wales are abstracted. Water companies abstract almost half of this amount. The remainder is used for cooling power plants, other industries, fish farming and other uses. Water companies use mainly surface water (two thirds), but also groundwater (one third).

The amount of water available in England and Wales to meet the needs of people and to sustain the water environment varies greatly between different places and seasons, and from one year to another. Parts of Wales and the English Lake District are well endowed with water, while water is scarce in parts of Eastern and Southeastern England. Parts of England were affected by severe drought in 1976, 1995 and 2005-2007.

Household water use in England and Wales stood at about 145 litres/capita/day in 2008/09. Total water supply for domestic and commercial customers in England and Wales was 14.5 billion cubic metres per day in 2009.

Quality of service

The quality of water and sanitation services in England and Wales is regularly and comprehensively monitored by the economic regulator, OFWAT. OFWAT statistics show that service quality has improved since the early 1990s, i.e. shortly after services were privatized. For example, the number of unplanned interruptions, properties at risk of low pressure, the share of complaints that were not answered within five days and combined sewer overflows have all declined, while sewage treatment works compliance has increased and river water quality has improved. A comparison with service quality in other areas of the European Union is difficult, since in few other countries such comprehensive water and sanitation service quality data are being published as it is being done by OFWAT.

Drinking water quality is also universally high, although isolated incidents where quality falls have occurred. For example, in June 2008 about 250,000 people in Northamptonshire

Northamptonshire

Northamptonshire is a landlocked county in the English East Midlands, with a population of 629,676 as at the 2001 census. It has boundaries with the ceremonial counties of Warwickshire to the west, Leicestershire and Rutland to the north, Cambridgeshire to the east, Bedfordshire to the south-east,...

were being told to boil tap water for drinking after routine tests by Anglian Water

Anglian Water

Anglian Water is a privatised water company that operates in the East of England. Named for East Anglia, apart from Norfolk, Suffolk and Cambridgeshire it also covers Lincolnshire, Essex, Bedfordshire, Buckinghamshire, Northamptonshire, a small part of north Nottinghamshire and Greater London...

found cryptosporidium

Cryptosporidium

Cryptosporidium is a protozoan that can cause gastro-intestinal illness with diarrhea in humans.Cryptosporidium is the organism most commonly isolated in HIV positive patients presenting with diarrhea...

Infrastructure

Physical assets of private water and sanitation companies in England and Wales include 1,000 reservoirs, over 2,500 water treatment works and 9,000 sewage treatment works. More than 700,000 kilometres of mains and sewers are buried beneath the ground – that’s enough to stretch to the moon and back, or a distance 200 times greater than the UK’s entire motorway network.

Policy and regulation

The economic regulator of water companies in England and Wales is the Water Services Regulation Authority, OFWAT. The Environment Agency

Environment Agency

The Environment Agency is a British non-departmental public body of the Department for Environment, Food and Rural Affairs and an Assembly Government Sponsored Body of the Welsh Assembly Government that serves England and Wales.-Purpose:...

is responsible for environmental regulation, and the Drinking Water Inspectorate

Drinking Water Inspectorate

The Drinking Water Inspectorate is a section of Department for Environment, Food and Rural Affairs set up to regulate the public water supply companies in England and Wales....

for regulating drinking water quality in the United Kingdom. Drinking water standards and wastewater discharge standards in the U.K., as in other countries of the European Union

European Union

The European Union is an economic and political union of 27 independent member states which are located primarily in Europe. The EU traces its origins from the European Coal and Steel Community and the European Economic Community , formed by six countries in 1958...

, are determined by the EU (see EU water policy).

Service provision

In England and Wales water and sewerage services are provided by 10 private regional water and sewerage companies and 16 mostly smaller private "water only" companies.

Local government service provision (before 1973)

Before 1973 water and sanitation services was provided by water undertakings and sewerage and sewage disposal authorities respectively. Until the 1950s there existed over a thousand water undertakings, with administrative boundaries similar to those of local government boundaries. By the early 1970s their number had been reduced to 198 by a gradual consolidation process aimed at achieving economies of scale

Economies of scale

Economies of scale, in microeconomics, refers to the cost advantages that an enterprise obtains due to expansion. There are factors that cause a producer’s average cost per unit to fall as the scale of output is increased. "Economies of scale" is a long run concept and refers to reductions in unit...

. Out of the 198 water undertakings 64 were run by individual local government authorities, 101 by joint boards comprising several local government authorities, and 33 were statutory privately owned water companies, some of which date back to the Victorian era. At the same time there were over 1,300 sewerage and sewage disposal authorities, most of them run by individual local government authorities. The sector thus was highly fragmented.

Water resources management was entrusted to 29 river authorities created in 1965. Their responsibilities included water conservation, land drainage, fisheries, control of river pollution and, in some cases, navigation.

Public regional companies (1973-1989)

Through the Water Act 1973 the government established 10 Regional Water Authorities in order to achieve even greater economies of scale, especially in sanitation, compared to the prior gradual consolidation of water undertakings. The reform was also aimed at putting in practice the principle of integrated river basin management, especially concerning the planning of investments in wastewater treatment. Given the small size of many river basins in England and Wales, in practice the area covered by each of the Regional Water Authorities typically contained more than one river basin.

Interestingly, the Regional Water Authorities were not only in charge of water supply and sanitation, but also of water resources management, thus opening the possibility of conflicts of interests since the same institution was in charge of abstracting water and discharging wastewater on the one hand, and controlling these same abstractions and discharges on the other hand. The Water Act left open the possibility to contract out water supply and sanitation services to local authorities. However, in practice this did not happen, and substantial assets were transferred from local governments to the new water authorities. Since the transfer was internal to the public sector, no compensation was paid to local authorities. Local authorities also initially held a majority of the Board seats of the new organizations. The private statutory water companies, which provided water to 25% of the population, escaped reorganization and were left to operate as before.

With the election of Margaret Thatcher

Margaret Thatcher

Margaret Hilda Thatcher, Baroness Thatcher, was Prime Minister of the United Kingdom from 1979 to 1990...

in 1979 the water and sanitation sector initially remained public, but the government attempted to make the enterprises operate more along commercial lines. As a result the number of employees in the sector declined from 61,000 in 1976 to 52,000 in 1985, real operating costs declined, tariffs were increased above the inflation rate and the share of self-financing of investments increased. However, government regulators also cut back on investments. While the industry became profitable, the rate of return on assets based on replacement cost values remained low at less than 2%. As part of the attempt to commercialize the service providers, the Water Act 1983 reduced the number of Board members of the water authorities. However, it also eliminated the local government representation on the Boards and made all Board members appointed by Ministers, thus further centralizing the sector.

Privatization (1989)

In 1989 the government privatized the ten public regional water authorities through divestiture (sale of assets). The authorities' functions related to water resources management were separated and retained by the public sector. At the same time the regulatory agency OFWAT was created, following the model of infrastructure regulatory agency set up in other sectors such as telecommunications and energy.

Tariffs

Tariff level. Water and sanitation tariffs in England and Wales have increased by 44% in real terms between 1989 and 2008–09 and are among the highest in the world. The average household water and sewage bill in England and Wales was £330 in 2008-09. According to a 2006 survey by NUS Consulting Group the average water tariff (price) without sewerage in the U.K. for large consumers was the equivalent of US$ 1.90 per cubic metre. This was the third-highest tariff among the 14 mostly OECD countries covered by the report. A study commissioned by the German industry association BGW in 2006, compared the average household water and sanitation bill (as opposed to the tariff per cubic metre that the NUS study used as a comparator) in four EU countries. This study showed that water bills in England and Wales were the highest among the four countries. Average water bills (excluding sanitation) were 95 euro per year in England and Wales, higher than in Germany, France (85 euro) or Italy (59 euro).

Comparison of annual water and sanitation bills in four EU countries

	Water tariff	Sewer tariff	Total
Germany	€85	€111	€196
England and Wales	€95	€93	€188
France	€85	€90	€175
Italy	€59	€40	€99

Source: Metropolitan Consulting Group: VEWA - Vergleich europaeischer Wasser- und Abwasserpreise, 2006, p. 7 of the executive summary

Taking into account differences in subsidies and service quality, the cost of supplying water at an equalized service level would be 84 euros in Germany, 106 euro in both France and England/Wales, and 74 euro in Italy. Concerning sanitation, unequalized tariffs are the highest in Germany at 111 euro per year, 93 euro in England and Wales, €90 in France and only €40 in Italy. Equalized costs net of subsidies are, however, highest in England and Wales with €138, followed by France (€122), Germany (119 euro) and Italy (85 euro).

Tariff structure and cross subsidies. Metered connections are charged at a volumetric rate, while unmetered connections are charged at a flat rate based on the rateable value of the property. The rateable value system was intended as a cross subsidy from wealthier to poorer households. However, since rateable values are often outdated, the subsidy is poorly targeted. Since more and more highly rated households opt for metering, flat rates for the remaining unmetered customers are being increased to compensate for the lost revenue. As a result, the already imperfect cross-subsidy system is unwinding. An Independent Report on Charging for Household Water and Sewerage Services published in 2009 by Anna Walker

Anna Walker

Angela Walker is an English television presenter who has presented such programmes as, Wish You Were Here...?, Big Strong Boys, Holidaymaker, Garden Challenge, Garden Invaders and Tomorrow's World....

recommended a package of help to ensure that "the transition to metering is not to cause real problems of affordability to those on low incomes".

Tariff review procedures Water and sanitation tariffs are regulated by OFWAT, which sets caps for tariff changes over five-year periods. In the 2000-2005 review period OFWAT mandated an average annual reduction of tariffs of 1.6%. However, in the 2006-2010 review period it has allowed an average annual increase of 4.2%.

Affordability As a proportion of income, in England and Wales the cost of water and sewerage together works out at less than 1.5% of weekly earnings. More details on tariffs in England and Wales are provided in OFWAT's annual reports on water and sewerage charges

Investment and Financing

Average annual investments in water and sewerage in England and Wales were £3.3 billion in 2000-2005 and £3.6bn in 2005-2010, according to OFWAT, which corresponds to £61 per capita per year. According to the industry association Water UK, between 1980 and 2010 the water and wastewater industry in England and Wales will have invested over £88bn.

Investments are financed primarily through self-financing and borrowing in the capital market. In March 2006 overall borrowing stood at £23.5bn for England and Wales. Net returns on this borrowing in 2006 were 6.6%.

Efficiency (Water losses)

Efficiency of service provision has many dimensions, of which only one (water losses) is treated here.

According to OFWAT leakage in England and Wales has declined significantly from 228 litres/property/day in 1994-95 to 141 l/p/d in 2006-07, enough to supply the needs of 10 million people. According to the Environment Agency, many companies in the UK have reduced their water loss to the economic level of leakage. This is the level at which, in the long-term, the marginal cost of leakage control is equal to the marginal benefit of the water saved. The rate of reduction in leakage has slowed for many companies because the most obvious causes of leakage have been detected and addressed, leaving only less apparent leakage problems. Models have been developed and fine-tuned to assess the economic level of leakage. A summary of the debate on these models can be found in a recent report by OFWAT.
According to a comparative study commissioned by the German water industry association BGW average water losses in the distribution network in England and Wales have been estimated at 19 percent. They are lower than in France (26 percent) or Italy (29 percent), but higher than in Germany, where they are apparently only 7 percent. The study states that its methodology allows for an accurate comparison, including water used to flush pipes and for firefighting. This is consistent with the International Water Association's definition of non-revenue water

Non-revenue water

, which includes authorized non-metered consumption such as for flushing and firefighting.

OFWAT does not use percentage figures when it assesses leakage levels. Also it assesses only leakage and not broader losses. It is thus difficult to compare figures from the comparative study cited above with OFWAT figures for England and Wales.

Metering

A particularity of water tariffs in England and Wales is the low share of metering. Most users are not billed on a volumetric basis and have no financial incentive for water conservation. Since the 1990s efforts have been made to increase the share of household metering, which reached 33% in 2008 for the UK. The Environment Agency would like to see 75% of households metered by 2025. Studies show that water meters lead to a 5-15% reduction in household water use. Meters are typically only installed at the request of customers.

In 2006 the Environment Agency announced it favours compulsory metering in water-scarce southern England. The measure is controversial. Consumer groups fear it will penalise poorer families with lots of children, and the disabled, who use more water. The announcement also represents a U-turn for Labour, which fiercely opposed compulsory water meters when in opposition, describing them as a 'tax on family life'. In March 2006 the company Folkestone & Dover Water Services was granted the power to install compulsory water meters in a landmark ministerial ruling under which it was given 'water scarcity status' by Environment Minister Elliot Morley

Elliot Morley

Elliot Anthony Morley is a former Labour Party politician, who was the Member of Parliament for Glanford and Scunthorpe from 1987 to 1997 and then Scunthorpe from 1997 to 2010. In 2009, he was accused by The Daily Telegraph of continuing to claim parliamentary expenses for a mortgage that had...

. In a written ministerial statement, Mr Morley said: 'In many parts of the country, water is a precious resource which we can no longer simply take for granted.' The company says that Folkestone and Dover has a very dry climate, making them it one of the driest areas in the UK. Many parts of the Middle East had more rain than this area and it is getting even drier and warmer thanks to climate change.

Environmental criticisms

There have been widespread cricisms of a perceived failure of the privatised companies to address persistent environmental problems associated with the water network. In July 2011, the Independent cited a report from the Policy Exchange thinktank pointing to a significant decline in river quality due to abstraction carried out by water companies.

In 2009, an investigation conducted by the BBC's Panorama concluded that the operation of more than 20,000 Combined Sewer Overflow pipes (CSO) was leading to the routine spillage of untreated wastes around Britain's coastline, potentially leading to very dirty water around some of the most popular beaches in the UK. The CSOs, intended for use in very rare occasions, were not covered by the existing legislation for waste emissions.

Operational criticisms

A 2001 study by the Public Services International

Public Services International

Public Services International is a global union federation of public sector trade unions. It 620 affiliated unions, in 160 countries, representing 20 million workers...

Research Unit, which is affiliated with trade unions and opposes privatisation, stated that

tariffs increased by 46% in real terms during 1990-2000
operating profits have more than doubled (+142%) in eight years, between 1991-2000
investments were reduced and
public health was jeopardised through cut-offs for non-payment.

External links

Water UK
OFWAT, the economic regulator for the water and sewerage industry in England and Wales
Environment Agency 's water quality website
Water Resources Management in Cooperation with Agriculture project

The source of this article is wikipedia, the free encyclopedia. The text of this article is licensed under the GFDL.