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Modernising the regulation of water resources


The Environment Agency of England & Wales issues abstraction licences to individuals and organisations, which authorise the abstraction of a given volume of water, with conditions aimed at protecting the environment and other abstractors’ needs. This legislative framework dates back to the 1960s.

Drought during the mid-nineties resulted in the 1997 Water Summit, producing a 10-point plan on improving water management. The review led to the publication in 1999 of ‘Taking Water Responsibly’. This signalled important changes including:

The Water Act was the final element of the Government’s strategy to modernise the regulatory framework in England & Wales. The Act heralded a new era in the management and regulation of water resources. It aimed to provide a modern, efficient and robust legislative framework to facilitate both sustainable water resources management and economic growth through the new provisions it contains.

The Environment Agency is the leading public agency for protection and improvement of the air, land and water environment in England and Wales. Within this broad remit they are responsible for strategic water resources planning and the management of water resources through the abstraction licensing system. The Agency has been responsible for implementing many of the provisions of the Act.

Key Features of the Water Act affecting Groundwater

  • All small abstractions, under 20 m³/d, are licence exempt.
  • Dewatering of mines, quarries and engineering works, use of water for trickle irrigation and abstractions in areas currently exempt will need a licence. The transfer of water for navigation will also need a licence.
  • Three licence categories - full, transfer and temporary (replacing the single licence used previously).
  • The licence application process has been simplified, with the Environment Agency taking on more of the responsibility.
  • All abstractors have responsibility not to let their abstraction cause damage to others. Damaging licences can be amended or revoked without compensation after 2012. Unused licences may be revoked without compensation.
  • Water companies and the public sector have a duty to promote water conservation. The Government will monitor performance.
  • Water Companies are required by law to develop, consult upon and publish water resource management and drought plans.
  • The Act opens up the market for supplying water to industrial/commercial customers with water supplies of greater than 50 Ml/a.
  • The Act places the pollution control function of The Coal Authority on a statutory basis and provides them with a number of statutory powers in pursuing these functions

Implementation of the Water Act

The Act introduces many varied and complex provisions. As with most modern statutes, these provisions do not all come into effect immediately. Commencement Orders are required, which will be promoted by the Department for Environment Food and Rural Affairs (DEFRA) at an appropriate time to ensure an orderly introduction of the new measures. Different commencement dates were applied to the different provisions outlined above, which have been progressively implemented, and continue to be implemented, since 2003. Some of these are explained here.

Deregulation of small abstractions

Small abstractions of less than 20 cubic m3/day were removed from water resource regulation as of 1 April 2005 and do not require an abstraction licence. As part of this change in legislation the Environment Agency estimates that 23,000 licences have been deregulated, equivalent to a 48% reduction in the number of licences issued. Those persons who held a licence to abstract less than 20 m3/day at the time of the deregulation, retained their protected right status until such time as the licence was revoked or a new abstractor succeeded to the licence.

Introduction of licence categories

In addition to full licence abstractions, the Water Act introduced temporary licences and transfer licences. Temporary licences may be obtained for abstractions covering 28 days or less. Transfer licences may be issued for activities where water is transferred from one source to another, or within the same source, without intervening use, in this way dewatering activities are likely to be covered by a transfer licence rather than a full licence. Neither temporary licences nor transfer licences will be provided with protected right status.

Water company water resource management plans

Prior to the Water Act the submission of water company Water Resource Management Plans (WRMP) for review was voluntary. However since The Water Resources Management Plan Regulations came into effect on 1 April 2007, water companies are now required to prepare, consult, publish and maintain a WRMP. The plans will cover the 25 year period from 2010 to 2035 and will outline how public water is to be supplied, taking into account population changes, climate change and environmental protection measures. The carbon footprint of current and future water supply options are also included in the plans.

Water companies in England and most of those in Wales have published draft plans which were open to consultation between April and June 2008. After the consultation period water companies were required to provide a ‘statement of response’ explaining how consultee recommendations had been taken into account. As the government advisor for water company plans in England, the Environment Agency reviewed the water company WRMPs and statements of response. The results of the Environment Agency review are available on their website. In particular the Environment Agency required water companies to adopt a twin track approach to ensure a balance between demand management, such as leakage control and metering, and the development of new resources such as reservoirs.

The final WRMPs are expected to be published late 2009 or early 2010 upon direction from DEFRA and the Welsh Assembly Group (WAG).

Water company drought plans

Water companies are also required to prepare a publicly available drought plan as introduced by the Water Act. The plans should outline how the water company will continue to provide an adequate supply of water during a drought period with drought orders (i.e. restrictions on water usage) and drought permits being used only when completely necessary.

In 2005 the Environment Agency produced guidance for the water companies, outlining the process they should adopt and the timetable they should follow. Subsequent to this guidance the water companies prepared draft plans for consultation early in 2006. Following the consultation period and direction from DEFRA/WAG most final water company drought plans were published in 2007.

The draft Floods and Water Bill also includes provisions for drought measures. The draft Bill extends Water Company hose pipe ban powers to include bans on a wider range of non-essential water usage e.g. the filling of swimming pools. Increasing water company powers in this way would allow more water to be conserved in the early stages of a drought.

More information about water resource management during a drought can be found on the DEFRA website.

To learn more about the impact of drought on groundwater supplies please read our ‘Groundwater drought in the UK’ groundwater article.

Removal of exempt activities

One of the final stages in the implementation of the Water Act involves the removal of currently exempt activities such as: the dewatering of mines, quarries and engineering works; the use of water for trickle irrigation; and abstraction of water from land owned by the Crown e.g. military bases. DEFRA’s target date for the removal of these exemptions is October 2009 after which time these activities will require an abstraction licence. The Environment Agency estimate that up to 10,000 new licences will need to be issued as a result of this change in legislation. To accommodate these additional licences over an agreeable timetable, DEFRA and the WAG have drafted transitional arrangements, which were open to public consultation until July 2009. The draft transitional arrangements specify that abstractors will have one year, once the exemption is removed, during which to apply for the abstraction licence and the Environment Agency will have up to 5 years to determine the licence applications.

The mining industry may be greatly affected by the removal of exempt activities under the Water Act as most mines and quarries are dewatered to allow for the safe and economical recovery of the mineral resource. Recognising the potential impact, DEFRA and the Mineral Industry Research Organisation (MIRO) commissioned a report of Abstraction Licensing Case Studies for Quarry Dewatering, which is being completed by Capita Symonds.

For more detailed information or interpretation, please refer to the Environment Agency’s booklet ‘The Water Act 2003 – Modernising the Regulation of Water Resources’.


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