The below contain our full reflections, but a shorter synopsis was published by Environment Analyst. You can read the published news article on EnvironmentAnalyst here (note this requires registration).
If you are potentially affected by the changes contained in the review, please get in touch with Sophie McCabe (Water Management) and Rebecca Wells (Policy and Economics).
EnvironmentAnalyst: “What are Logika’s views on the recommendations and do you see these recommendations helping water governance align with other environmental targets in relation to land and nature? Or does more work need to be done?”
The Commission has issued 88 recommendations in a 464-page report, addressing how the sector should operate commercially, how it is regulated, and what those regulations seek to achieve. In this sense, it is genuinely a “reset”. The breadth of its scope highlights both the scale of the problem and the magnitude of the challenge. Absorbing and reflecting on the report takes time, and the reforms it sets out will be neither easy, cheap, or quick. The lag between policy decisions and visible policy outcomes is long-term, a reality often overlooked by the layperson.
The recommendations and overall approach, as reflected in Sir John Cunliffe’s announcement speech are thoughtful, thorough, and sensible. He emphasised that implementation would require sustained effort and focus. In short, the report contains many useful and well-founded proposals, but we are still at an early stage. The chapter on “implementation” comes at the very end of its 464 pages, yet the entire report is ultimately, about implementation.
The recommendations fit into several themes including strategic direction, planning, and legislation and regulation:
Strategic direction: The framing of the analysis in this section is welcome. It highlights several underlying issues, demands, competing priorities, and trade-offs. All of which are central to understanding both what has happened in the water sector and why.
We welcome the suggestion that strategy documents, as well as policy choices, should be subject to cost-benefit assessment. Both involve choices and trade-offs, and such evaluation is essential for transparency and accountability.
The key recommendation: to develop a 25-year Water Strategy, renewed every five years, is not a new concept. The Government’s 25 Year Environment Plan (and its subsequent Environmental Improvement Plan) already recognises the importance of a systems-thinking approach to environmental governance, by considering environmental themes in an integrated way.
In summary, the review’s analysis underlines just how difficult it is to translate such wide-ranging policies and strategies into effective implementation.
Planning: This section contains a great detail to consider. We support the emphasis on viewing water as part of a complex system, requiring a cross-sectoral approach with both long-term and interim targets within a “systems planning” and “holistic” framework. However, water is only one, albeit very important, element of the wider environmental system.
Whilst the review appears to recognise this, a key question remains: how will regional water plans and planners interact with other environmental compartments; air, soil, climate - as well as other pressures affecting water, such as chemicals, industrial processes, and objectives for the built environment? One possible approach could be to link this process with the Environmental Improvement Plan (EIP), but the practicalities of achieving such integration require further careful consideration.
Legislation and regulation: This section similarly provides detailed analysis across three chapters. We note and welcome reference not only on regulation, but also on implementation and enforcement, the latter, particularly, is often overlooked. We also recognise the attention given to challenges such as contaminants like PFAS, discussion of the Water Framework Directive (WFD), and suggestions for greater use of Sustainable Drainage Systems (SuDS) and nature-based solutions. These are all areas of relevance to Logika Group’s work.
The proposal for greater use of “constrained discretion” for regulators is understandable and sensible, but will be very difficult to implement, a challenge the review itself acknowledges. This concept will require extensive further consideration by Government.
The central conclusion - that a single new water regulator is needed for England and Wales respectively - represents a major step that the Government appears determined to pursue. However, it raises important questions that demand much deeper analysis: how precisely such a regulator would be established, and what the associated costs, risks, and trade-offs might be.
It is welcome that the review makes explicit the need for sustained investment in infrastructure, IT, staff, and skills to deliver its ambitions. Equally important is the recognition of the need for consumer redress, advocacy, and support.
The final two sections of the report focus on the related issues of commercial governance, infrastructure, and asset health. Any sustainable solution has vital components;
- Consideration of the sector’s “investability,” and competition,
- the resilience of both assets and the wider sector,
- the availability of appropriate data to monitor performance (of assets, investment and environmental outcomes),
- the capacity of supply chains to deliver essential infrastructure.
It is also welcome that the review highlights the security of water assets, including cyber security, and recommends greater integration between water companies and planning policy/development consent regimes for major developments.
“How do you see the Commission's recommendations affecting your work as consultants? Do you think it will change how you work with clients in the water sector? If so, in what ways?”
The full implications for policy, regulatory infrastructure, and the environment will not be clear for some time. It is important to remember that these are recommendations to government, and challenging ones to implement. Moreover, they apply only to England and Wales and differ in important respects between the two. Delivering them will require significant time, effort, and funding. However it is already apparent that significant change in afoot.
Logika Group provides support across the policy lifecycle (from policy design, options analysis, impact assessment and evaluation as well as work within regulated industries from permitting, environmental assessment and infrastructure. Logika Group undertake Environmental Impact Assessments (EIA) via the Town and Country Planning Act (TCPA), and Development Consent Order (DCO) process. The review has the potential for all these areas to be affected.
We look forward to seeing how these recommendations manifest into practical application and what this will mean for the consultancy sector and Logika Group, and most importantly, for the environment.
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