Defra environmental targets consultation: Environment Agency response

In 2020, the Department for Environment, Food and Rural Affairs (Defra), the Environment Agency and Ofwat led a review of the water industry national environment programme (WINEP) ahead of the next price review (PR24). They wanted to ensure the next round of WINEP actions achieves greater environmental benefits for every pound invested by water companies by using a more outcomes-based approach.

A dedicated WINEP taskforce undertook the review and co-developed a series of proposed solutions for redesigning the WINEP. The review of the water industry national environment programme consultation document (Environment Agency, Defra, Ofwat (July 2021)) asked for comments on the proposed solutions. The consultation document also set out a longer-term roadmap for developing the WINEP including actions:

  • for the next price review in 2024
  • to consider in future price reviews (2029 and beyond)

The WINEP roadmap has been updated to reflect the consultation responses.

The WINEP taskforce will continue to work with water companies to achieve the following actions.

Action 1: Introduce a tiered approach for including schemes in the WINEP

We will start to use the 3-tiered approach to develop the WINEP for PR24. We will use it fully in future price review periods. For PR24, a list of tier 1 outcomes will be linked to improving river water quality, biodiversity net gain and surface water management.

Water companies can choose how their obligations in these areas are reflected in the WINEP; either as tier 2 goals, or tier 3 outputs. Every tier 2 goal or tier 3 output will be linked to a tier 1 outcome.

Actions for PR24 WINEP

The actions are as follows:

  • the WINEP methodology will set out the tiered approach government and regulators expect to be used by PR24
  • the WINEP will clearly link all proposed tier 3 outputs and tier 2 goals to tier 1 outcomes
  • regulators will set delivery requirements at an outcome level rather than at an output level, as appropriate
  • the guidance for options development and for options assessment will specify how water companies should produce a high quality, evidence based WINEP programme of best value options – allowing water companies to meet their regulatory obligations and customers’ needs, whilst restoring and increasing natural assets to realise environmental net gains

Action for future WINEPs

Government and regulators will review the policy and change the regulatory framework to further enable a more outcomes-based approach.

Action 2: Better incorporate long-term planning in the development of the WINEP

Actions for PR24 WINEP

The actions are as follows:

  • make sure the environmental actions that water companies propose consider the long term
  • companies should plan to a 25-year time horizon to enable options with a longer lead-in time to be included in future programmes of work

The WINEP will include:

  • 5 years of clear actions that align with the next price review period (financial years 2025 to 2030)
  • there will be a set of ‘indicative’ actions for the following 5 years (financial years 2030 to 2035)
  • any actions that are working towards the environmental outcomes identified within longer-term plans (up to 25 years) where there is sufficient evidence to support them

Actions for future WINEPs

Government and regulators will review how to best achieve the objectives of the existing strategic planning frameworks such as:

  • river basin management plans
  • drainage and wastewater management plans
  • water resources management plans
  • flood risk management plans

Government and regulators will consider how future WINEPs can incorporate long term planning.

Action 3: Clearly establish dependencies between the WINEP and other statutory planning frameworks

Actions for PR24 WINEP

Government and regulators will use the WINEP methodology to show how the WINEP can achieve outcomes from other statutory planning frameworks.

Water companies will work at a catchment level. They will draw together the long-term goals from other statutory planning frameworks to understand catchment objectives for the next 25 years. This will inform their WINEP proposals and business plans.

Water companies will include actions from other planning frameworks in the WINEP where appropriate to make sure they align with PR24’s long term strategies and adaptive planning approach.

Action for future WINEPs

Water companies will make sure WINEPs are aligned to actions in other planning frameworks.

Action 4: Increase the use of catchment and nature-based solutions

Actions for PR24 WINEP

Water companies, the Environment Agency and, where appropriate, Natural England will define the problems to be addressed through the WINEP with water companies at an appropriate scale, to achieve the WINEP requirements.

Water companies should consider catchment and nature-based solutions wherever they are feasible and appropriate. They should use them where they present the best value option for the environment.

Regulators will consider new approaches to support greater innovation and use of catchment and nature-based solutions where they are the right solution.

Regulators will consider changing how they regulate catchment and nature-based solutions. They will be in line with relevant position statements or framework documents and supported by the price review framework.

Actions for future WINEPs

The actions are as follows:

  • a natural capital approach will become further integrated into water company decision making
  • government will consider changing legislation to encourage using catchment and nature-based solutions – they will aim to move away from less desirable traditional solutions

Action 5: Take account of wider environmental outcomes when deciding on solutions in the WINEP

Actions for PR24 WINEP

The actions are as follows:

  • water companies will develop options to contribute to the WINEP wider environmental outcomes
  • water companies will use natural capital metrics (as specified in the WINEP options development guidance) to understand changes to asset quantity and condition, and impacts on the ecosystem services they provide, when developing options and proposing solutions
  • regulators will assess evidence identified to support achieving wider environmental outcomes
  • regulators will consider evidence of customer support and costs. This will include evidence on how customers are protected if co-funding does not materialise where included in the proposals

Action for future WINEPs

Government and regulators will evaluate whether changes made to the WINEP methodology have supported wider environmental outcomes. They will adapt the WINEP methodology or legislative framework accordingly.

Action 6: Increase water company involvement in the WINEP development process

Actions for PR24 WINEP

The actions are as follows:

  • water companies will be expected to follow the options development guidance and driver guidance, including co-design, when developing options for the WINEP
  • water companies should work with others and, where appropriate, lead on the development of WINEP options to address the impact of their activities
  • WINEP methodology makes it clear how all parties can use the existing framework to enable a more adaptable approach to the WINEP

Action for future WINEPs

Water companies should take greater ownership in developing the WINEP.

Action 7: Increase involvement of other organisations and external funding in the WINEP development process

Actions for PR24 WINEP

The actions are as follows:

  • consider how to involve catchment partnerships and others in developing the WINEP
  • target at least 20% co-funding of non-statutory actions and seek further co-funding beyond this level at their discretion

Action for future WINEPs

Government and regulators to further embed co-design, co-delivery, and co-funding in the WINEP framework.

Leave a Reply

Your email address will not be published.