Written Ministerial Statement by Elliot Morley, Minister of State for Climate Change and Environment on Folkestone and Dover Water Services’ application to be designated an area of water scarcity - 1 March 2006
Mr Morley
My Rt Hon Friend, the Secretary of State, on the application of Folkestone and Dover Water Services under the Water Industry (Prescribed Conditions) Regulations 1999, has today designated the company’s area to be an area of water scarcity for ten years with effect from 1 April 2006.
In many parts of the country water is a precious resource which we can no longer simply take for granted. Today’s decision is a considered response to the specific long term challenges facing Folkestone and Dover water company; it is not a reaction to the short term problem of low rainfall in the south east of England.
This designation widens the company’s powers to use water meters to charge customers in its area according to the quantity of water that they use. It sets aside in that area the right of customers to remain on an unmeasured basis of water charging in their current homes while using water only for normal household purposes.
The right to remain on an unmeasured charge was introduced by the Government in the Water Industry Act 1999 as a valuable reassurance to those households who preferred their existing unmeasured water charging. Since 1999 metering has increased to 26% of households in England and Wales as a result of the voluntary take up of meters and of water companies’ use of the limited powers they have to impose metering, such as on change of occupier and in new housing. Metering has gained more familiarity and acceptance as a normal method of charging, indeed, the UK is now almost alone in western Europe in not charging for water on a mainly volumetric basis. I believe that metering is a fair charging system, under which people will not pay for what they do not use.
While there are no plans to change current policy on compulsory water meters, the Government recognised at the time of the 1999 Act that, especially where water resources were scarce, the right to remain on an unmeasured charge needed to be balanced against the desirability of conserving water. That is why the legislation makes provision for a company to make a local case for compulsory metering for water conservation reasons.
The company has established the case that, in its area over the next ten years, it will face great difficulty in assuring that limited supplies will cover increasing demands for water. No single measure will address this. The company needs to adopt a range of measures both on supply and demand, with due regard to cost and the effects on the environment. These measures must include exploring new sources, minimising leakage and encouraging water efficiency. The Government welcomes the efforts made by the company in those directions and urges it to continue to do more.
The potential contribution that water metering can make to demand management cannot be ignored. The Government has long recognised that metering, with appropriate tariffs, has a role to play alongside other measures in managing demand. In the circumstances which have been shown to exist in the area of appointment of Folkestone and Dover Water Services, metering is needed alongside other measures available to the company, to manage demand. My Rt Hon Friend has concluded that waiting for the voluntary effect on demand of customers taking up the free meter option and on the company’s existing metering powers is too long and uncertain. My Rt Hon Friend is satisfied that the company needs to be empowered to adopt a programme of compulsory household metering to realise the full water savings from metering over the next ten years.
My Rt Hon Friend has therefore agreed to the company’s application.
I will be paying particular attention to the sensitive introduction of meters to households and to the effects on customer bills, especially of those least able to pay. The vulnerable groups scheme already in place will provide protection from high metered bills for customers with large families or certain medical conditions who are in receipt of certain benefits. I am encouraged by work done by the company which suggests that at least 70% of the customers to be metered will pay the same or less with a metered supply
This decision and the ten-year programme of metering that the company will then follow, is a medium to long-term measure to deal with a long-term problem. It will not show its full water-saving benefits for some years. The view of the Environment Agency is that metering could provide about half of the margin of supply over demand that the company needs by 2015.
Today’s decision is a further indication of the Government’s determination to work with water companies, regulators and customer representatives to tackle the long-term challenge of water saving in the south-east. In October last year I gave effect to the Government’s Rural Manifesto commitment to put in place a water saving body by setting up the Water Saving Group under my chairmanship to work together on a number of different but complementary workstreams. Compulsory metering is part of the toolkit for demand management, but it is not a blanket solution. It is for other companies with long term water supply concerns similar to those presented by Folkestone and Dover Water Services to consider making their own applications for water scarcity status under the provisions introduced by the 1999 Act. It is up to each company in the first instance to judge what is necessary and, if it is appropriate to do so, include the case for compulsory metering as part of a long-term plan.
Page last modified: 2 March 2006
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published: 2 March 2006