Tens of billions of pounds of private finance is guaranteed to be spent over the next five years to build new sewage overflows, reservoirs and major pipe upgrades, the Environment Secretary has said.
Steve Reed said the “biggest ever investment” in the water industry, amounting to around £88bn in private cash, will allow the Government to “fix the foundations” of the water sector and bring an end to the sewage crisis.
Clean water campaigners have criticised the fact that bill payers will be forced to pay for the clean up of the country’s waterways, with average bills expected to rise by around £19 a year between 2025-2030.
But officials have insisted that under the Government’s reforms, every penny of cash raised will be invested into major infrastructure upgrades, rather than being syphoned off in dividends to investors.
New plans being introduced will mean water firms that fail to spend the money raised from customers on infrastructure upgrades will be refunded to bill payers.
The spending is due to be finalised by Ofwat in December when it sets out its final determination for bill rises. Its initial recommendation, published over the summer, was for £88bn to be raised through customer bills, despite the water industry asking for £105bn.
Delivering a speech at Labour’s annual conference in Liverpool on Monday, Mr Reed will say: “The work to fix our broken sewage system starts immediately with tens of billions of pounds of private-sector investment that will create good, well-paid jobs in every part of the country.
“That’s the biggest-ever investment in our water sector and the second biggest in any part of the economy during the lifetime of this government.”
Environment Secretary Steve Reed will give a speech to Labour conference on Monday (Photo by Carl Court/Getty Images)
Under the plans, around £10bn will be invested in storm overflow upgrades, £4bn to boost the country’s water supply, including building the first new reservoirs for more than a generation, and £6bn in tackling nutrient pollution, caused largely by the agriculture sector. The Government hopes that building more reservoirs will increase the UK’s water resillience and support its plans to build more new homes.
Mr Reed will add: “The Conservatives stood back and watched as raw sewage polluted our rivers and customers’ money was funnelled into multimillion pound bonuses and dividend payments while our sewage system crumbled.
“I’m calling time on all that today. This government of service will fix the foundations and clean up our waterways.”
As well as protecting investment in water infrastructure, the Government earlier this month published legislation to toughen up the laws that will see water bosses face jail time if they are found to be covering up illegal sewage dumping.
The Water (Special Measures) Bill, will also give the regulator the power to ban the payment of bonuses to water executives if they are found to be failing customers.
Regulator, the Environment Agency (EA), will also see its staffing numbers increased, while all investigations into water firms will be paid for by the sector, significantly boosting resources for the body.
A major review into Britain’s water system, including its future resilience and the impact of agricultural sector on the waterways has also been commissioned and is due to report next year, when more legislation is expected to be published.
The £4.5bn Thames Tideway Tunnel, known as London’s new “super sewer”, is due to open next year and has been delivered by private finance that will see Thames Water customers’ bills rise.
How Labour’s policies compare with i‘s manifesto
i‘s Save Britain’s Rivers campaign has been calling on the Government to sign up to a manifesto of five pledges in order to help the country’s rivers recover from decades of pollution.
It urges ministers to overhaul Ofwat and provide more funding for the Environment Agency to allow it to do its job properly.
Some of Labour’s pledges to date align with i‘s manifesto, including plans to introduce tougher penalties and restrict bonuses. However, the Government is yet to meet all i‘s demands, including increased funding for the regulator and farmers.
1. RIVER HEALTH: 77% rivers in good health by 2027
What i says: Within its first six months in power, the Government must publish a roadmap on how the UK is going to achieve its legal target of 77 per cent of rivers being in good ecological health by 2027. This must include increased funding for the Environment Agency.
What Labour says: Under the new legislation, water companies will have to cover the costs for any investigation into them, which will significantly improve resourcing for the Environment Agency. Officials have refused to put a timeline on bringing the waterways back into health, but have said it will take years to improve.
2. SEWAGE: Sewage spills will not damage high-priority areas – including bathing spots and nature sites – by 2030
What i says: Untreated sewage should not be causing damage to high-priority sites (bathing spots, protected nature sites, National Parks and chalk streams) by 2030. Water companies who fail to meet this target will be prosecuted.
What Labour says: While there is no specific target relating to high-priority sites, the Government has announced plans to imprison water executives if they persistently obstruct investigations into sewage spills, which is a dramatic strengthening of regulators’ powers.
3. WATCHDOG: Regulators will stop water companies destroying the environment in pursuit of profit
What i says: The Government must publish a plan to reform the regulation of water companies, including tougher powers for Ofwat to restrict dividends and bonuses for underperforming water companies. A “green duty” will be placed on Ofwat, which will force the regulator to place greater emphasis on the environment when making decisions over companies’ business plans.
What Labour says: It has set out plans under its new Water (Special Measures) Bill that will hand the Environment Agency and the Drinking Water Inspectorate powers to bring criminal charges, which could lead to two years in jail for water bosses. It will also impose automatic and severe fines for wrongdoing. Ofwat has already been asked to ensure customers are refunded if infrastructure money is not spent, so that it cannot be diverted to pay for bonuses or dividends. Labour has not committed to a “green duty” for Ofwat.
4. BATHING: Create 100 clean bathing spots in rivers by 2030
What i says: 100 clean bathing spots must be created in England by the end of the parliament, and the Environment Agency must start monitoring water quality throughout the year at these sites.
What Labour says: The Government has not mentioned bathing spots specifically, but there are further plans to look at water regulation at a more localised level.
5. FARMING: Farmers must be funded to improve water quality, and face enforcement action if they damage the environment
What i says: Within its first year in power, the Government should strengthen its Environmental Land Management scheme so farmers are given more grants, support and advice to undertake activities that will improve water quality.
What Labour says: It says it will ensure “environment land management schemes work for farmers and nature”, but is yet to provide more detail on what that will entail. Environment Secretary Steve Reed will set out plans to further legislation that will seek to deal with agricultural run off into the waterways.
