Government urged to give water watchdog more teeth

MPs will today call on Defra to undertake a review of the UK's water regulations and enforcement practices in order to ensure that the policy framework is keeping pace with the challenge presented by worsening water shortages.

The Environment, Food and Rural Affairs Select Committee will today issue a report on water regulator Ofwat's recent price review that is expected to call on the industry watchdog to better balance the need to deliver sustainable water supplies while ensuring water bills remain affordable for households and businesses.

Earlier this year, Ofwat approved above inflation increases in average water bills of 4.1 per cent for 2009/10. It is also widely expected to green light further above inflation price hikes for the five-year period from 2010 after water companies submitted draft spending plans that require a significant increase in infrastructure investment to cope with rising demand and worsening water shortages.

However, the committee ruled Ofwat needed to step up efforts to address water shortages while ensuring increases in bills are kept to a minimum.

"Consumer bodies and water companies recognise that more customers are struggling to pay their water bills," said EFRA Committee Chairman, Michael Jack MP. "This trend could increase unless Ofwat's remit is strengthened so that it can establish the scope and size of the problem and so that it can pursue innovative solutions."

The report recommended that the government undertake a review of Ofwat's entire remit and develop a new "water efficiency obligation" to provide a clear incentive for businesses and households to install water-saving measures.

It suggests that plans to roll out water meters should be expanded to include new incentive schemes that reward those customers who preserve water. "Metering is no substitute for a robust approach to promoting water efficiency," said Jack.

Similarly, the report argues that those customers who install their own sustainable drainage systems should be eligible for lower water tariffs.

It also recommends that the government intervene to ensure that the cost of modifying water infrastructure to cope with the effects of climate change is more evenly spread throughout the country. Currently, investment programmes designed to improve water quality have a disproportionate impact in those areas that are sparsely populated.