THE ROLES, ACHIEVEMENTS
AND POLICIES OF THE DETR, THE ENVIRONMENT AGENCY AND OTHER PUBLIC
AND PRIVATE BODIES
221. The Water Act 1989 abolished
the public Water Authorities and disposed of their functions to
private companies and nongovernmental organisations. Under
the provisions of this Act, now amalgamated with other legislation
relating to the water industry, functions relating to water supply
and sewerage provisions were transferred to Water Service Companies.
To regulate the industry and protect environmental and public
interests, two bodies were established: it was decreed that the
National Rivers Authority (now incorporated into the Environment
Agency) would be the environmental regulator, and the Office of
Water Services (OFWAT) would be the financial regulator. The
Department of the Environment (now the Department of the Environment,
Transport and the Regions) would be responsible for national policy
and relations with the EU. As Mr Alan Davis from the DETR told
the inquiry in oral evidence, "it is a complicated picture
with a lot of players".[501]
222. A view of the whole arrangement
was put forward by the British Medical Association who recommended
that local communities should be involved in "discussions
and strategies" for sewerage services, and that an integrated
environmental health impact assessment should be included in the
UK's National Environmental Health Action Plan: this should itself
be revised to include mechanisms for local consultation as part
of the planning process.[502]
A more specific point was raised in oral evidence by the Soil
Survey and Land Research Centre, who reported that not only had
the Environment Agency not been given any responsibility for soil,
but that there was "confusion" over which government
department should lead in matters relating to soil (the gap and
the confusion arose from the same, semantic, source: that is,
that two terms could be applied to the same referent - "soil"
which implies an environmental resource, and "land"
which implies an economic resource).[503]
Several planning issues were also raised, along with specific
criticisms of the various `players'.
Planning Issues
223. A few witnesses raised planning
issues in relation to the way the system works at present. Water
Watch were concerned about the revocation of sewerage agency agreements
with Local Authorities. Since privatisation, several companies
have cancelled sewerage agency agreements with Local Authorities
and taken the work inhouse. Agency agreements date back
to the period prior to regionalisation of the water industry in
1973: they meant that Local Authorities carried out design and
project management on small sewerage schemes. This matter has
already been raised in paragraph above where we discussed problems
of ratinfested sewers, and reported that the Robens Centre
was concerned that, unless Local Authorities have an agency agreement
with the local water company, they cannot gain access to the sewers
to set bait for the rats.
224. Water Watch pointed out
that they have some sympathy with the companies in wishing to
end these agreements, but there are drawbacks. One such is the
loss of local knowledge, another the loss of local consultation.
The biggest drawback is the loss of access to information. When
agency agreements are ended, they told us, all information, including
maps of sewerage mains, pumping stations and CSOs, will be transferred
to CDROM. Anyone - even Local Authorities - wishing to
retrieve this information may be charged[504]
by the companies although the information is needed by highway
and planning departments, and for the monitoring of local development
plans. In Bradford, Water Watch alleged, planning permission
for 150 homes was granted "with only minor modifications
to the downstream sewerage system". They reported that Yorkshire
Water had assured the Local Authority the drainage infrastructure
was satisfactory and refused to allow the Planning Department
access to the relevant drainage area plan on the grounds of commercial
confidentiality; but when councillors finally gained access to
the plan after the houses had been built, they identified three
unsatisfactory CSOs. The Water Industry Act 1991 places a duty
on sewerage undertakers to provide Local Authorities with copies
of relevant particulars of sewers and sewermodifications,
but companies "far too often" claim commercial confidentiality
as a way of circumventing these requirements.[505]
We agree with Water Watch's Mr Bowler, who stressed in his oral
evidence that "we have to start dismantling this notion that
somehow commercial confidentiality exists on these things".[506]
225. Other planning issues were
brought to the attention of the inquiry by Mr M.A. Jones.[507]
One such was the fact that, though planning permission is needed
for the construction of new sewage treatment works, it is not
required for the erection of plant at existing works or for the
installation of pipelines. Pipelines pose a risk of environmental
damage if they cross vulnerable areas especially, Mr Jones told
us, along the coastal margins. Though "in most cases"
planning authorities are "aware of" any proposed pipeline
routes, the water companies are not obliged to consult with anybody
before installing them.[508]
Water Watch also pointed out that water companies have powers
of compulsory purchase for land needed for new or replacement
sewage works or for pipes. They fear that companies may purchase
new sites in order to free existing land for development. "In
the case of pipelines," they told us, "there are no
requirements for environmental assessments, no independent valuations
and no quality control studies. Wildflower meadows have been
damaged, drystone walls badly replaced and planning laws flouted".[509]
Regulatory Structure
DETR
226. The Government told the
inquiry that the aim of the Department of the Environment, Transport
and the Regions (DETR) is "to create and sustain an effective
policy and legislative framework" so that the Agency may
"successfully protect and enhance the freshwater and marine
environment". Ministers also advise the Director General
of OFWAT about what the water companies' priorities for investment
should be and "seek to promote efficiency by the water companies
in all their activities". At EU level, the DETR represents
UK interests; at home, it seeks to ensure that, once implemented,
EU Directives are properly complied with.[510]
227. The UK position to date
has been that water policy should be based on sound science and
guided by risk analysis and a costbenefit approach. Since
coming into office, the present Government has been reviewing
a number of aspects of policy, including water quality, but Ministers
are still considering what stance they want to adopt in the long
term.[511]
228. The DETR is not without
its critics, especially within the water industry. Some of the
dissatisfaction centres on what is perceived as a lack of clear
guidance. Severn Trent Water, for example, complain that they
do not get "clear and timely" advice about environmental
policy so "inconsistencies" can arise which "adversely
impact on the stability of the investment planning process".[512]
The Water Services Association reported that the water industry
needs "a stable, long-term regulatory environment to develop
its strategies", so the most important contribution the Government
can make is to provide a clear long-term framework for pollution
control generally and sewage treatment specifically. Consequently,
they look to the DETR to give guidance about how regulations should
be interpreted and applied so that they can comply with them;
to clarify practical interpretive issues so that appeals can be
avoided; and to make quick decisions on any appeals that do arise.[513]
Ministry of Agriculture,
Fisheries and Food/Department of Health
229. The Ministry of Agriculture,
Fisheries and Food (MAFF) is responsible for advising on the safety
of food, especially for queries relating to the use of sewage
sludge in agriculture. The Department of Health provides advice
to both DETR and MAFF on public health aspects of sewage treatment
and disposal.[514]
The Environment
Agency
230. The Government told the
inquiry that, under the terms of the Environmental Protection
Act 1995, the Environment Agency was established as an independent
body bringing together the functions of the former National Rivers
Authority, the Pollution Inspectorate and the 83 local Waste Regulation
Authorities in England and Wales.[515]
Among other duties, it is required to preserve or improve the
quality of rivers, estuaries and coastal waters. It also has
specific duties arising from a number of EU Directives on water
quality, and is a statutory advisor to the Secretary of State.
Its brief is to minimise the effects of sewage disposal to land,
sea and air. There are distinct limits to its remit.
231. Firstly, its remit does
not include the regulation of smell nuisance, which remains a
Local Authority function.[516]
Secondly, though it has power to control the release of dangerous
substances from point sources, it has only limited powers to control
discharges from diffuse sources.[517]
Thirdly, though responsible for implementing health criteria
set by the DETR in consultation with MAFF and DoH, its public
health powers and responsibilities are both limited and somewhat
confused.
232. Where environmental regulatory
decisions have health implications, there are statutory consultative
mechanisms in place so that the Agency gets the right advice.
Oddly, however, relevant EU Directives do have a human health
component, and it is the Environment Agency that has the responsibility
for delivering the requirements of the Directives in this country.
The matter is further complicated by the fact that the concept
of "harm", including human harm, is included in the
Environmental Protection Act 1990 with regard to the control of
major industrial processes under the IPPC,[518]
but the Act does not apply directly to sewage discharges.[519]
The British Medical Association concludes - unsurprisingly -
that the Agency's own view of its role as regards health is "ambiguous"
and that its remit should be extended so that it is "explicitly
clear" that Agency responsibilities towards the environment
include addressing the health implications of the wider environment.[520]
233. The Agency has, however,
begun to address some issues which, while perhaps primarily germane
to the wider environment, impact on human health through the food
chain. It has developed a measure of pollution called a "Direct
Toxicity Assessment" (DTA) that is aimed at controlling dangerous
substances (heavy metals, chlorinated solvents, pesticides and
other organic substances). The DTA will not measure individual
substances in effluents; rather it will seek to control the impact
of effluents as a whole. The Agency has developed a protocol
for using the DTA to control the toxicity of wastewater discharges,
along with suitable tests and methodologies: the proposal was
circulated in the summer of 1996. As a result, it has been decided
to undertake a demonstration programme, which is due to report
at the end of 1999.[521]
234. Many specific criticisms
were aimed at the Environment Agency by witnesses to this inquiry.
Most of them focused either on the slowness with which appeals
were resolved, or on questioning the Agency's willingness and/or
ability to monitor effectively and prosecute infringements of
the regulations. On the appeals procedures, Anglian Water reported
that the average time for issuing a consent is 125 days, but the
system is considerably more protracted if a case goes to appeal.[522]
Appeals against discharge consents are often referred to Environment
Agency Headquarters and then to the DETR.
235. By June 1997 there was a
total of 836 outstanding appeals,[523]
168 in one region alone (Yorkshire).[524]
In oral evidence, a representative of the Environment Agency
estimated the number of outstanding appeals as "about 1,000",[525]
82 of which "quite possibly" date back to 1991.[526]
The water companies complain that the delay makes it impossible
for them to plan their investment: environmentalists complain
that, while the appeals are pending, the water companies continue
to discharge effluent at what the Environment Agency has already
decided is an inadequate standard. The backlog of appeals should
be dealt with both immediately and expeditiously to avoid these
anomalies.
236. On the other question relating
to the Environment Agency's willingness to monitor and prosecute,
the issues were discussed above in paragraphs and will not be
repeated here. The Environment Agency's defence against such
criticisms is that they do more than the statutory minimum in
some cases, and that their function is to monitor compliance with
the Directives, not to take responsibility for health or other
issues. When asked whether the Agency could guarantee the safety
of bathers and other recreational water users, Mr Chris Chubb
said that "the crucial thing is that we monitor for compliance
with the Directive and not for beach management purposes":[527]
health is the responsibility of Local Authority Environmental
Health Departments, not theirs.[528]
Either this is an example of a minimalistic and legalistic approach
to the duties of an Environment Agency, or it is an example of
the gaps in public protection that open up because the system
of control and management is a ramshackle Heath Robinson affair.
In either case, we do not find it reassuring.
237. In addition, there are allegations
that the Environment Agency fails to prosecute failures and infringements.
The Campaign Against Sewage in the Sea at Sunderland, for example,
claimed that "there have been no prosecutions of [Northumbrian
Water] ... even when ... sewage waste has been blowing across
cliffs and major roads in the region".[529]
CASSS would like to see the Environment Agency proactive in environmental
matters and prosecuting "clear failures".[530]
The Aire Valley Conservation Society alleged that there are 14
sewage works in the Yorkshire region alone which do not comply
with discharge consents and "the Agency fails to prosecute".[531]
238. The Environment Agency believe
that they are "demonstrating a robustness towards the water
industry in terms of enforcement and in terms of standards".
They reported that they are currently prosecuting a water company
"at least once every ten days for offences" and "not
shirking from the enforcement activity".[532]
Surfers Against Sewage quoted figures relating to the prosecution
rates of the various regional Environment Agencies from an ENDS
Report 25 April 1996,[533]
which we reproduce here:
| Region
| Prosecutions 1996-97
| Prosecutions since 1989
|
| Anglian |
8 | 32
|
| Northumbrian
| 0 |
12
|
| North West
| 0 |
31
|
| Severn Trent
| 5 |
48
|
| Southern
| 5 |
19
|
| South West
| 2 |
19
|
| Thames |
3 | 29
|
| Welsh |
7 | 44
|
| Wessex |
0 | 10
|
| Yorkshire
| 0 |
30
|
| TOTAL:
| 30
| 265
|
The Minister's concern was not so
much the rate of prosecution as the seriousness accorded to such
cases in the courts. He told us that "the courts in many
cases do not award penalties that are justified by some of the
offences" and in particular, that heavier penalties should
be exacted from serial offenders.[534]
We would encourage him, therefore, to pursue his concerns in
a constructive way.
239. Specific questions were
raised which we found disturbing. Water Watch reported that they
had learned that sewerage undertakers could "buy" variations
to discharge consents whilst work was being carried out at sewage
treatment works. "An example of this practice," they
said "relates to a STW in West Yorkshire. An officer of
the Agency agreed a £500 payment for a variation of 18 months
duration. The decision appears to have been taken by a single
officer".[535]
Another disturbing instance was the case raised by Mr David Davies
of the Shellfish Association of Great Britain when the Environment
Agency waived a discharge consent without telling the local shellfish
farmers.[536]
"They would never have let us know," he told the inquiry,
"we would not have known, other than it was our shellfish
monitoring that picked it up".[537]
Something similar was mentioned by Water Watch's Pete Bowler,
who told us in oral evidence that he had "discovered only
last week ... that there is a cold weather exemption for discharge
consents" and "a lying snow exemption".[538]
240. We cannot possibly say whether
any of the accusations in the foregoing paragraphs have any substance,
but we are concerned that they are being made. In oral evidence,
the Environment Agency's Dr Martin Griffiths said that "the
public need to be assured that there is adequate environmental
protection".[539]
Sadly, we have concluded that the attitude of the Environment
Agency does not give such reassurance. When asked if there should
be a more open and public debate about environmental protection,
Dr Mance commented that there might "be a difficulty of there
being too much information on this in the public domain";[540]
a suggestion which appears to us flippant and condescending.
We contrast this statement with the repeated emphasis of the Institute
of Wastes Management, that the Agency needs to put information
"on to a public record for people to see" far more quickly
than it does at present.[541]
The IWM suggested that, since there is a requirement on industry
to report to the Agency within certain timescales, there should
be a similar requirement on the Agency to report to the public:
this seems reasonable to us.[542]
241. Another aspect that does
not reassure us is the Agency's preoccupation with costs. Listening
to their oral evidence, one could be forgiven sometimes for imagining
that the Environment Agency is a subbranch of OFWAT. For
example, in answer to a question concerning what environmental
obligations the Agency would be likely to lay on the water companies
in the next price review, Dr Geoff Mance replied that: "at
present [it] is not stating a list of obligations ... What it
is doing is putting out into the public domain ... a document
clearly stating all the things it requires them to cost so the
Director General can indicate the price implications";[543]
and "It is for the Secretary of State then to guide us ...
as to the pace of environmental improvement he believes is acceptable
given the potential impact on prices".[544]
242. Similarly, in its written
evidence the Agency reported that their "precautionary"
approach to endocrine disrupters in sewage effluent (potentially
a very high profile concern in the future) should involve "a
number of specific preventative actions taking account of relative
costs and benefits".[545]
Added to the fact that the Government seem to be playing the
same game - announcing, for example, that "there is a cost
benefit issue" involved in trying to protect recreational
water users other than those who can be strictly defined as "bathers",[546]
we are deeply concerned that no public body interprets its responsibilities
as actively, and solely, campaigning for health and environmental
protection.
243. Depicted above are a number
of areas in which the Agency has been found wanting. It must
seek to rectify these problems if public trust is to be gained
and justified. However it may be that some problems - such as
outstanding appeals on consents - will require an injection of
resources to enable a prompt resolution. While the Minister's
loyalty to his colleagues forbade him saying so, we detect in
his words a tacit admission that the Agency, like the PHLS, has
been under-resourced.[547]
We understand that ways to address the imbalance of resources
between the regulator and the water companies, at least, are being
discussed.[548]
We hope that these talks come to a swift and successful conclusion.
OFWAT
244. The water and sewerage industry's
financial regulator is the Office of Water Services (OFWAT), a
nonministerial government department. The Government told
us that the Director General's duties are laid down in Section
2 of the Water Industry Act 1991: his primary duty is "to
ensure that water and sewage companies can carry out and finance
the functions specified in the Act. Subject to that he has to
`protect customers, promote efficiency and facilitate competition'...
He does not control company profits or dividends".[549]
245. OFWAT's method of operating,
as described in the Director General's written evidence,[550]
is quite complex. The Director General sets limits on the annual
price rises ("K" factor) and initiates periodic reviews:[551]
companies must produce Asset Management Plans which detail how
they intend to invest their profits and meet their environmental
obligations. Preparations are currently in hand for the third
periodic review (AMP3), which will cover the years 20002010.[552]
The Director General draws upon advice from independent "reporters"
(usually professional consulting engineers) to help challenge
the water companies' estimates of costs. He also receives information
from the Environment Agency each year about companies' progress
in delivering the improvements for which customers are paying;
and the companies send him annual "July returns". Using
this information, he analyses and reports on aspects of company
performance. If the "July returns" give rise to concern
about company performance, he can conduct an investigation of
that company. "The Director's role, therefore," he
reported, "is exercised both at a periodic review of prices
and annually through active monitoring".[553]
246. It is not to be expected
that OFWAT, alone of the other bodies, would escape criticism.
We might have expected that most of the critics would have been
arguing that the Director General had failed to keep bills down.
However, the most common arguments were (from the water companies)
that his demands were preventing them meeting legitimate public
expectations, and (from campaigning organisations) that he was
failing to control water company profits or failing to ensure
profits are reinvested in improvement, or both. Both groupings
believe that standards should be improved and they must be paid
for: it is just a question of how these improvements are to be
funded. The Director General's view is that improvements can
be funded from operating efficiencies; other bodies, as we noted
above in paragraphs 216-219, do not necessarily agree.
247. OFWAT's role was the subject
of some criticism. The most common complaint about Mr Byatt was
that his demands were preventing companies from meeting a legitimate
public demand for a better service. According to Water Watch,
"future investment ... is threatened by OFWAT's current approach
to environmental improvement investment within the current price
review".[554]
Several SSSIs, they said, are affected by pollution from sewage
works or CSOs. "One conservation body," they say, "has
already taken legal advice which suggests that OFWAT could be
subject to Judicial Review if it fails to ensure adequate capital
is available to prevent damage to SSSIs".[555]
The Water Services Association said that the duty of OFWAT should
be to "maintain and improve existing assets, secure high
levels of service to customers [and] achieve the environmental
and public health objectives set by Government and enforced by
the Environment Agency"; doing this "may involve increases
in charges above the prevailing rate of inflation," they
said, "particularly since the prospect of further efficiency
gains ... is diminishing".[556]
248. The Director General has
chosen to interpret his duty to customers only as protecting their
pockets. We regret that he does not interpret his obligation
as extending to ensuring that they get the best possible service
- the service which they want - for the money they pay. He has
also neglected to extend his sphere of influence to other duties
which the 1991 Act laid on him: according to written evidence
from the Government, under Section 3 of the Act he has a duty
"to further the conservation, enhancement of flora, fauna
and geological or physiographical (landscape) features of special
interest".[557]
However, he has repeatedly insisted that his job is pricecontrol
and that it is up to the DETR to decide environmental policy.
249. From the beginning of his
discussion with us he was at pains to emphasise that the environmental
obligations placed on the companies in 1994 were nothing to do
with him;[558]
he explained to us that "the benefits which the environment
is getting ... are very considerable" and that "the
proper carrying out of functions as far as environmental improvements
is concerned is a matter for the Secretary of State".[559]
While he, personally, would like to see environmental improvements,[560]
he described his role in relation to policy formulation as "to
remind ministers about costs"[561]
and summed up his position thus: "I have always said that
if environmental aspirations move too fast then prices will go
up ... I am the person who drew attention to this issue right
at the beginning several years ago and I have not changed my position
on that one".[562]
We deduce from his words that his object in denying any responsibility
for the environment is to protect himself from blame if prices
rise. For example, he reasoned: "if the Government brings
in a new policy then that may result in some increase in prices
... It will be quite clear to the public, and it seems to me absolutely
right that these things should be clear, that is what is going
on".[563]
Fortunately, perhaps, as we have previously noted, we do not
consider that price rises will be necessary.[564]
250. Our chief regret is that
he has not consulted adequately with Government departments, the
Environment Agency or with other specialist bodies before taking
decisions, so that gaps have opened up in the regulatory structure.
The consequence is, in the words of Water Watch, "we are
faced with the possibility of water companies hiding behind the
skirts of one regulator to avoid the requirements of another".[565]
251. Much of the evidence presented
in our discussion of the regulators' performance raises questions
as to the accountability of the water companies and of the regulators
themselves. It is important that both the environment and consumer
interests are properly represented and that the representatives
act in a wholly transparent way. We raise two suggestions which
may go part of the way to improving the situation: firstly, that
consideration should be given to the role of the proposed regional
chambers in securing a proper dialogue between the regulators,
local water companies and communities; secondly, that `league
tables' providing easily comprehensible information upon the companies'
relative performance should be published upon the Internet and
advertised in newspapers in the same way that the schools' tables
are published. The information required would be upon performance
in the core business and upon investment in addition to the existing
levels of service indicators.
501 Q2. Back
502 Ev
p.9. Back
503 Q209. Back
504 Ev
pp.106-7; Q341. Back
505 Ev
p.107. Back
506 Q342. Back
507 Ev
p.141. Back
508 Ev
pp.141-42. Back
509 Ev
p.107. Back
510 Ev
p.130. Back
511 Ev.
p.132. Back
512 Ev
p.110. Back
513 Ev
p.125. Back
514 Ev
p.131. Back
515 Ev
p.131. Back
516 Ev
p.60. Back
517 Ev
p.73. Back
518 Q67. Back
519 Ev
p.66. Back
520 Ev
p.9. Back
521 Ev
p.73. Back
522 Ev
p.23. Back
523 Ev
p.23. Back
524 Ev
p.94. Back
525 Q84. Back
526 Q85. Back
527 Q94. Back
528 Q95. Back
529 Ev
p.30. Back
530 Ev
p.31. Back
531 Ev
p.94. Back
532 Q108. Back
533 Ev
p.44. Back
534 Q914. Back
535 Ev
p.106. Back
536 See
above paragraphs 73-77. Back
537 Q299. Back
538 Q343. Back
539 Q62. Back
540 Q65. Back
541 Q781,
also Q844. Back
542 Q781. Back
543 Q86. Back
544 Q86. Back
545 Ev
p.73. Back
546 Q32. Back
547 QQ
919, 865. Back
548 Q919. Back
549 Ev
p.131. Back
550 Ev
p.114. Back
551 Ev
p.131. Back
552 Ev
p.61. Back
553 Ev
p.115. Back
554 Ev
p.106. Back
555 Ev
p.105. Back
556 Ev
p.125. Back
557 Ev
p.131. Back
558 Q715. Back
559 QQ719,
723 also 725. Back
560 Q755. Back
561 Q751. Back
562 Q753. Back
563 Q756. Back
564 See
paragraph 216. Back
565 Ev
p.105. Back
|
