Water abstraction ability to be linked to water availability under Government proposals

Out-Law News | 19 Dec 2013 | 10:37 am | 3 min. read

The amount of untreated water that individuals and businesses can extract from rivers and the ground would be linked much more closely with the amount of water available, under reforms to the current system proposed by the Government.

Water abstraction is currently controlled by a system of licences set up in the 1960s when water supplies were not considered to be as limited as they are now. The consultation, which runs until 28 March, sets out proposals for a modernised system that the Department for Environment, Food and Rural Affairs (Defra) intends to be more flexible than the current arrangements. The Environment Agency in England and Natural Resources Wales would retain overall regulatory responsibility for the regime.

"The old abstraction system is no longer flexible enough to deal with the challenges of climate change and a growing population," said Environment Minister Dan Rogerson. "That is why it is crucial we introduce these new reforms to safeguard our environment in the future and allow the economy to grow."

"This is really important to get right, so I want to encourage everyone who has an interest, including farmers, businesses and water companies, to tell us their views," he said.

Under the current system, abstractors tend to be granted  a licence to abstract a fixed amount of water regardless of availability, according to the consultation document. This means that much of the water that is licensed is not actually used, but cannot be made available to those who need it. There is also little incentive to trade or use what has been abstracted efficiently. Defra's proposals would instead link access to water availability, and incentivise those that use the system to manage water efficiently by making it easier for them to trade supplies.

The consultation sets out two main options for reform, developed by Defra in conjunction with an Abstraction Reform Advisory Group made up of major trade associations and environmental groups. The 'Current System Plus' proposal would retain and build on the current licensing system; whilst the  'Water Shares' proposal would give abstractors a share in the overall water resource instead of using a licence to specify the absolute amount of water that they can abstract.

'Current System Plus' would allow the regulators to continue to use the tools included in some licences to reduce or stop abstraction when supplies are low. However, these tools would be improved to strengthen the link between water availability and abstraction to allow more water to be taken when resources are available, allowing abstractors to build up supplies to insure them against seasonal variations. Abstractors would be given annual and daily limits in the same way as currently, and temporary low risk trades between abstractors would be pre-approved.

The more radical 'Water Shares' proposal would give abstractors a share in available water resources, rather than access to a fixed amount. This would encourage them to share responsibility for the supplies in their own 'catchment'. The regulator would give each abstractor a water allocation for a fixed period based on the available resource at that time and the reliability and size of their share.

Regardless of which approach is implemented, Defra proposes to remove time limits from licences that currently include them and instead introduce a new transparent, risk-based process allowing the regulator to review catchment conditions and change permissions within each catchment, with notice, where this needs to be done to protect the environment. Any new system would be implemented in an "evolutionary and proportionate" way, with the full package of reforms only being introduced in those catchment areas where there are "clear economic and environmental benefits" for doing so, according to the consultation.

Planning and environmental law expert Gordon McCreath of Pinsent Masons, the law firm behind Out-Law.com, said that although progress on abstraction licensing reform was "very much to be welcomed", the timetable for change remained slow "given the pressures on water resources across the country".

"The glacial speed of change being applied is designed to give existing holders of water rights and their investors time to plan for change, but it looks like the 'Water Shares' proposal could itself lead to a lack of the certainty that business needs," he said. "Existing abstractors will need to look very carefully at how that proposal allows you to predict what amounts of water you will be entitled to and when."

Any reforms are expected to be implemented in the early 2020s, according to the consultation, and could include separate approaches for England and for Wales. In the meantime, Defra said that it would continue its work on tackling unsustainable abstraction with Ofwat and the Environment Agency. It cited the creation of the Restoring Sustainable Abstraction programme in the River Itchen in Hampshire as evidence of its success.