Select Committee on Environment, Transport and Regional Affairs Memoranda

Memorandum by North Yorkshire County Council (DWB 17)


  1.  The proposals for new style licences, stronger controls and tackling the legacy of past abstraction problems are broadly welcome. They emerge from earlier consultation in which the County Council played a full part and point towards a much more sustainable approach. This will be delivered through new Catchment Area Management Plans. The proposals are, of course, driven mainly by environmental considerations. The County Council does not consider that their delivery would unduly reduce the security of public water supplies. Despite concerns expressed by the water industry it is expected that the Environment Agency will adopt a flexible regime in determining future time limits on major licences and in deciding whether to remove certain licences which, in the opinion of a water company, have been kept in reserve for four years or more against drought contingency. The introduction of time limits is expected to give public water supply abstraction licences a relatively long life and thus counteract company fears about the inability to justify major investment or to cope with new accountancy arrangements for depreciating assets over an unreasonably short time. It is to be expected that any dormant licences held as a hedge against drought would feature in the statutory drought contingency plans which companies will be required to prepared and maintain. They will thus receive appropriate regulatory consideration by the Environment Agency.

  2.  While the draft Bill is consistent with the Government's decisions following consultation and is compatible with many of the County Council's previous comments there is concern about the adequacy of proposed procedures for objecting to licence applications. A 28 day period for submitting objections is too short for formulating objections to potentially complex matters. Such a limited period is incompatible with the desire to make the regulatory system serve wider environmental purposes as may be expressed by third party interests. Nor does it take account of the fact that some licences are more contentious than others and may therefore warrant extended consultation procedures. Indeed selected major abstraction licence applications should be subject to the voluntary code for extended consultation which the Environment Agency has piloted on Integrated Pollution Control and perhaps other matters. There is a case for making this code mandatory and arrangements for handling abstraction licence applications should not foreclose this possibility.


  3.  Views are sought on whether publicity for licence applications should be undertaken by the applicant or by the Environment Agency. The guiding principle should be that licence applications need to be brought to the attention of those who may possibly be affected. Because of the remote location of some abstractions, site notices are not an appropriate method to use. Direct notification, media publicity/statutory notices and a public register (with Internet access) are the only sure methods. Experience in Town and Country Planning with similar procedures identified problems in relying solely on action by applicants and in 1992 the onus was placed fully on local authorities. This experience suggests that Clause seven of the draft Bill should be amended to ensure that the Agency has total responsibility for publicity and consultation. However if such a system is intended to be self financing through increased licence fees, it will be difficult to avoid putting up costs to the consumer.


  4.  Similarly, if the scheme for compensating licensees for the loss of long term rights is to be paid for out of licence fees it will either increase costs or act as an unfortunate influence on the Agency's capability to act. It is likely that the water industry and others could see fee increases as a direct "tax" on abstractors. If such revenue was to be the main source of compensation, justified on community and environmental grounds which go beyond the facts of individual cases, it could legitimately be argued that part of the burden should be borne by taxpayers generally.


  5.  The principle of strengthening the ability of the Environment Agency to encourage water companies to enter into bulk transfer arrangements is welcome. While this may have particular application in the drier south and east of England, it remains a topical subject in the north-east because of the potential of the Kielder Reservoir. In the past the County Council has identified a link between this potential and the case for variation/renewal of major river abstraction licences held by Yorkshire Water. The proposals in the draft Bill are weak and rely too heavily on voluntary co-operation. The Agency will lack "teeth" if a water company declines to enter into a bulk transfer agreement. Public confidence is not best served by knowing that the Agency may simply "have regard" to any such refusal when determining a future abstraction licence application. A stronger regulatory power would provide a greater incentive to voluntary co-operation and demonstrate that, where appropriate, this type of sustainable solution could readily be achieved.


  6.  The Government intends to replace the current Customer Services Committees with a new Consumer Council for Water. Although this is likely to have a regional structure it is impossible to comment properly without knowing more about their intended constitution and terms of reference. Principles need to be clarified in the final Bill. Although it is proposed that the Secretary of State will have the power to direct OFWAT to take environmental and social factors into account, this is a high level mechanism. There remains a concern that the advancement of the consumer interest in the environment through the new Consumer Council may be weak or non-existent. The final Bill should be more explicit in placing an obligation on the new Council to take environmental considerations into account and to receive appropriate advice at national and regional levels when performing its duties.


  7.  The proposal to increase the size of RFDCs is presented as "minor and uncontentious". The consultation paper contains no details but indicates that these will appear in the final Bill. Because of the importance of the local authority levy as a source of funding it is considered that any changed arrangements should ensure a continued local authority member majority on statutory RFDCs.


  8.  There are some notable omissions from the draft Bill which make it read, in part, more like a White Paper.

  9.  Despite the Competition Act and extensive consultation in early 2000 on how the water industry could operate more competitively, the Government has specifically excluded this aspect from the draft legislation. It is appreciated that the Government is keen to ensure that increased competition does not put water quality at risk and that there is a fear that consumers may lack certainty in any new management structures but it is now about two years since the Government stated an intention to bring forward water specific legislation on competition. Publication of the draft Bill for comment is thus an opportunity missed which cannot be fully compensated if proposals for competition are to appear only in the final Bill.

  10.  There is limited information on the application procedures for water abstraction licences. While the detail will properly be left for separate regulations it is difficult to make full representations on the draft Bill without being clearer on any changes to the procedures for advertisement/notification, consultation, making objections, public inquiry and the role of third parties. Publication of the draft Bill is premature without further details on these points.

January 2001

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