Having a much greater proportion of the sewer network in the management of the water and sewerage companies is intended to alleviate a range of private sewer and lateral drain problems faced by householders both in terms of physical condition and in terms of often unclear responsibility and shared liability.
Now the legislation is in place this introduces a significant additional requirement in terms of effective management of customer interfaces. This is of particular importance due to the potential impact on Service Incentive Mechanism scores.
What are the challenges?
For the water industry, this means significant changes in responsibilities and new approaches to managing the new assets.
As well as operational issues around meeting anticipated demand for maintenance and repair, companies are also striving to understand the likely expenditure implications. The interface between water and sewerage companies (WaSCs) and local authorities has been important in this respect.
The water and sewerage industry has come a long way since privatisation in 1989 – with around £70 billion of capital investment by 2010, better standards of service, increased environmental and drinking water compliance, and greater efficiency. However the sewerage network has suffered from a lack of integrated management.
The expectation is that WaSCs will now be able to operate the entire network more cost effectively, planning maintenance and resolving problems more easily and comprehensively. Environmental stewardship is also expected to be improved in the hands of the WaSCs.
How about consumers?
From a consumer perspective, the transfer will provide greater clarity on ownership and responsibilities, resulting in fewer disputes.
The downside is that someone must fund the necessary future improvement and maintenance. Water industry regulator Ofwat has said that an increase in bills for customers is inevitable and they estimate increases of between £3 and £14 per annum.
There have been suggestions that lower home insurance premiums should offset some of this sum, but it’s unclear if this will actually happen.
How will the WaSCs fare?
In most areas there is considerable uncertainty over the extent and the condition of private sewers. In many cases the industry is inheriting some degree of historic neglect on the part of customers.
This adds to an already stretched responsibility: sewerage is generally considered the least invested-in aspect of the utilities. Uncertainty over what exactly their new assets constitute will make it difficult for some WaSCs to calculate required levels of funding in future price determinations. Mapping, surveying and assessing the network is likely to be a priority.