Defra work on Costs and Benefits to Water Utilities resulting from the proposed Flood and Water Management Bill
The Flood and Water Management Bill will require Water and Sewerage Companies (WaSCs) to co-operate and provide information to the local authorities and the Environment Agency (EA) so that they can fulfil their roles for local flood risk management. There will be additional costs as well as potential benefits to individual WaSCs associated with these requirements.
WRc has completed a study for Defra to investigate these potential new costs and benefits to WaSCs. This research involved dialogue with local authorities, the EA, WaSCs and their representing bodies – Ofwat and Water UK. A cost/benefit scenario testing tool was developed which provides a guide to the potential financial benefits and costs a WaSC may experience depending on variables unique to that WaSC.
The requirement to co-operate and provide information to local authorities and the EA will involve partnering and collaboration between these organisations. This study also investigated and recommended ways in which local authorities and WaSCs can seek to apply good practice and efficient means of sharing information, through for example, efficient organisational and partnering arrangements.
The output of this work provided a framework to understand how WaSCs in England differ in aspects such as size, number of local authorities, organisational arrangements and how these different characteristics relate to the level of costs and benefits they may incur.
This study was well received by Defra and their partners including the EA and OFWAT. Defra commented “This is a good clear report. The economic estimates and the development of the Cost Benefit Model make interesting reading.”
Outcomes from this work will be communicated by Defra in due course. For any further information please contact John Cima.