PN110107ST

Embargo: 10:00 Thursday 11 January 2007

Contact: Owen Williams 020 7219 8659

LORDS COMMITTEE CRITICISE GOVERNMENT RESPONSE ON WATER MANAGEMENT

The House of Lords Science and Technology Committee have today criticised the Government for a lacklustre response to their report, Water Management, published in June of 2006.

The Committee criticise the Government for failing to engage with their recommendations, saying that the response 'consists largely of a recital of what the Government are already doing' and labelling the response 'unnecessarily defensive'. The Committee do welcome moves from the Government to consult on the issue of compulsory metering in areas of serious water stress. However, they identify several areas where the Government is not doing enough.

In the Committee's response they criticise the Government for remaining complacent about the high level of unpaid water bills. They dismiss as 'dubious' the Government's excuse that this is part of a general growth in consumer debt. The Committee reassert that the problem has been exacerbated by the Government's decision to ban the full or partial disconnection of domestic water. They point out that in Australia the threat of partial disconnection is a powerful incentive for consumers who are able, but refuse to pay their water bills.

Further criticisms are made of the Government's failure to tackle the problems of water affordability for vulnerable groups. The Government's response fails to answer the Committee's criticisms of the excessively narrow eligibility for the Vulnerable Groups Regulations. Indeed, the Government appear to have completely ignored the Committee's analysis of the need for greater help for families unable to pay their water bills. The Committee argue that a new approach of tougher deterrents for those able but unwilling to pay combined with greater support for those in genuine financial need would be fairer for all water users.

The Committee gives a warmer welcome to Ofwat's more thoughtful response, whilst also highlighting the regulator's ongoing problems with transparency and its misinterpretation of the sustainability duty. The Committee also criticise Ofwat's seeming indifference to innovation in the water industry. Ofwat rejected the Committee's recommendation that more funds should be set aside for R&D, claiming that companies may pursue poor value schemes simply to ensure they spend their allocation of money. The Committee dismiss this as 'particularly unconvincing', pointing out that companies would be unlikely to waste their money and that Ofwat could veto unsuitable schemes. The Committee do however praise Ofwat for agreeing to review the concept of an 'economic level of leakage'.

The Committee also received a response from Water UK, the organisation that represents water companies. This is praised for taking on board the Committee's concerns about affordability, and for its enthusiasm for grey-water recycling and increased levels of metering. However, Water UK are criticised for taking an unduly conservative approach to extending competition in the water industry and improving the industry's investment in research and development.

Commenting, Lord Selborne, Chairman of the Science and Technology Sub-Committee which undertook the inquiry, said:

"We are disappointed that the Government have failed to take on board so many of our recommendations. They have completely failed to grasp the importance of dealing with the high levels of non-payment of water bills as well providing greater help for those in genuine financial difficulties. They must reconsider giving water companies the ability to partially disconnect persistent non-payers.

"We welcome Ofwat's decision to review the methodology determining water company leakage targets, but it is a shame Ofwat has not accepted our suggestions to encourage greater research and development in the water industry. If we are to make significant headway in improving water efficiency and reducing the unacceptable level of leaks then Ofwat, as the regulator, should be taking the lead in a transparent and constructive fashion."

Notes to Editors

1. The Science and Technology Committee's original report, Water Management, was published on 6 June 2006 and can be found here: http://www.publications.parliament.uk/pa/ld200506/ldselect/ldsctech/ldsctech.htm

2. The response of the Government, Ofwat and Water UK as well as the Committee's comments on those responses will be available online shortly after publication at 10am on Thursday 11th January. That will be found here: http://www.parliament.uk/parliamentary_committees/lords_s_t_select/stwater.cfm

3. The Members of the committee who conducted the original inquiry were:

Earl of Selborne (Chairman)

Lord Broers

Lord Howie of Troon

Lord Lewis of Newnham

Lord Mitchell

Lord Oxburgh

Lord Patel

Baroness Perry of Southwark

Baroness Platt of Writtle

Baroness Sharp of Guildford

Lord Taverne

For copies of the report or to request an interview with Lord Selborne, please contact Owen Williams, Committee Press Officer, on 020 7219 8659.

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