Select Committee on Delegated Powers and Regulatory Reform Twelfth Report



Memorandum by the Department for Environment, Food and Rural Affairs


The Water Bill will be introduced to the House of Lords. This Memorandum -

  • summarises the main provisions of the Bill,
  • identifies the delegated powers in the Bill, and describes the purpose and proposed use of those powers,
  • explains why the matters have been dealt with by creating delegated powers, and
  • explains the degree of Parliamentary control on the exercise of those powers.


The Bill in the main amends the provisions of the Water Industry Act (c.56) ("WIA") and the Water Resources Act 1991 (c.57) ("WRA"). These are highly technical statutes that contain provisions dealing with economic regulation of the water industry and the maintenance of drinking water quality and regulation of water resources within diverse and unpredictable local and regional contexts. Both Acts already contain a range of delegated powers to allow them to cope with the detail required to regulate these areas and the flexibility to respond to the many and varied problems which are comprised in them. The powers we are taking in this Bill are to ensure that we are able to continue to address these issues while implementing our new policy proposals.

The Water Bill contains 97 clauses and 9 Schedules, in 4 Parts. The main purposes of the Bill are as follows:

  • Part 1 reforms the abstraction licensing system to improve water resource management and promote greater water conservation by water companies;
  • Part 2 introduces provisions for better operation and regulation of the water industry including clauses establishing a new Consumer Council for Water and a regulatory Authority to replace the existing Director General of Water Services;
  • Part 2 also extends the opportunity for competition, by allowing new entrants to supply non-household customers who consume large volumes of water;
  • Part 3 introduces a number of provisions designed to strengthen the Environment Agency's ability to manage water resources and to introduces a range of measures aimed at contributing to the Government's priorities relating to water; and
  • Part 4 introduces supplementary provisions.
  • Schedules 1 and 2 set out the detailed administrative provisions for the membership and constitution of the Water Services Regulation Authority and the Consumer Council for Water;
  • Schedule 3 sets out further provisions for the transfer of functions and property from the Director General of Water Services to the new Authority or the Consumer Council for Water;
  • Schedule 4 establishes the system of the licensing of water suppliers;
  • Schedules 5 and 6 amend the Coal Industry Act 1994 and establish provisions with respect to powers of entry and the modification of compensation provisions;
  • Schedules 7 and 8 amend a number of enactments in consequence of the Bill; and
  • Schedule 9 repeals a number of enactments in consequence of the Bill.


Part 1 - Abstraction and Impounding


This Part provides the Environment Agency with additional tools for managing water resources and stronger powers to take action against abstractions causing environmental damage; enabling abstractors to plan ahead in an environmentally responsible manner and increase the flexibility, accountability and administrative efficiency of the system, increasing the ease of access to sustainable water resources.


3 Existing impounding works

Clause 3(5)

Power conferred on:    Secretary of State/NAW

Power exercisable by:    Statutory Instrument

Parliamentary procedure:    Negative Resolution

The preceding clause in the Bill, clause 2, amends the restrictions on impounding works so that there is an ongoing requirement to hold a licence once works are built. This clause 3 deals with existing unlicensed impounding works, so that they only need a licence if the Environment Agency serves notice requiring them to obtain a licence. There is an appeal process initiated by clause 3(4) if the person is aggrieved by the requirement to obtain a licence. Under clause 3(5), the appropriate authority (the Secretary of State or NAW) may by regulations make provision with regard to the grounds of appeal, the manner and period under which notices may be served, and appeal procedure. It is submitted that these details are appropriately dealt with by regulations, and that negative procedure is adequate for such matters.

4 Existing impounding works: works notices

Clause 4(3)

This clause gives the Environment Agency power to serve works notices in relation to existing unlicensed impounding works. This will allow a level of control which otherwise would not exist, and by clause 4(5) the process incorporates provisions which govern enforcement notices for licensed impounding works. These include regulation and direction making powers which either already exist or are dealt with elsewhere in the bill. It is submitted that it is appropriate for there to be consistency in this regard.

6 Rights to abstract small quantities

New section 27A (1) wra

Power conferred on:    Secretary of State

Power exercisable by:    Statutory Instrument - order

Parliamentary procedure:    Negative Resolution

The normal threshold above which licences are required to abstract water is 20m3 in any period of 24 hours. The availability of water resources varies, of course, in different parts of the country and this clause enables the Environment Agency to apply to the Secretary of State (or he may direct it to apply) for an order setting a different threshold in a specified area, a particular class of inland waters or underground strata, or a class of such waters or strata within a specified area. This would therefore enable the Agency to set licensing thresholds according to the local water resource situation. Orders would deal with technical details of localised thresholds which differ from the norm and it is therefore submitted that a delegated power is appropriate and that it should be subject to the negative resolution procedure.

Under 27A(2) such an order is only made on application to the Secretary of State by the Environment Agency, but the Secretary of State can direct the Agency to make such an application.

8 Amendments relating to section 7

New Section 199a (6) WRA - Appeals against Conservation Notices under S.199

Power conferred on:    Secretary of State

Power exercisable by:    Statutory Instrument - regulations

Parliamentary procedure:    Negative Resolution

This clause makes consequential amendments to the Water Resources Act 1991 as a result of the repeal of sections 30 and 31. In particular it adds provisions following section 199 of the Water Resources Act (which provides that where a person serves notice on the Environment Agency that he proposes to search for or extract minerals, the Agency may serve a "conservation notice" on the person concerned requiring him to take reasonable measures for conserving water). Regulations under the new section 199A may prescribe the manner in which notices of appeal against conservation notices are to be made, the timescale within which appeal has to be made and the manner in which appeals are to be dealt with. It is submitted that a delegated power to specify the procedural details of the treatment of appeals is appropriate and that this should be subject to negative resolution procedure.

9 Power to provide for further exemptions

New Section 33A (1) WRA

Power conferred on:    Secretary of State

Power exercisable by:    Statutory Instrument - regulations

Parliamentary procedure:    Negative Resolution

This clause, introducing a new section into the Water Resources Act 1991, gives the Secretary of State a power to make regulations exempting specified abstractions and impounding works from the need for a licence. This would be used, for example, where local circumstances mean that there is no need for the restrictions to apply. This might encompass quite large volumes of water which are nevertheless returned near to the point of abstraction substantially undiminished in quantity or quality. Regulations will ensure that an exemption must satisfy any prescribed conditions that may be attached to it. Any exemption may apply generally or relate to a geographical area or particular source of supply or prescribed inland waters. Regulations made under this power might need to be revised to take account of new circumstances where an exemption is justified. It is submitted that technical details of such exemptions should be the subject of delegated legislation, rather than being included in the Bill itself, and that the negative resolution procedure is appropriate.

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