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“Clearly, water use is of such importance that its value to the economy as a whole is incalculable”. The words of the National Audit Office – an organisation not known for hyperbole – in a report published in 2005 into the work of the Environment Agency. The NAO reached that conclusion by recognising that public health, manufacturing, farming, and office working all need reliable supplies of good quality water if the country is to thrive. A Thames Water report into the impact of water supply failure in the City of London estimated losses of £7-10 billion a month if the taps ran dry. And we can’t be complacent by thinking that the move to home working during the pandemic reduces the risk: secure water supplies to residential areas are just as essential, and just as vulnerable. Failure would bring risks to public health and social cohesion.

In the UK the water companies are the largest abstractors of water from rivers and reservoirs, and from aquifers such as the Chalk that underlies much of southern and eastern England. They take about 15 billion litres of water every day across England and Wales. About three billion litres of this is lost through leakage – a figure that has scarcely changed in 20 years. About the same amount is used in commerce and industry, and the remainder is for household consumption.

The water companies and regulators have acknowledged that the volumes lost through leakage are reputationally damaging, and prejudicial to their efforts to persuade their customers to reduce their consumption. They have now committed to reducing leakage by one half by 2050, but given the pressures on water resources from climate change and increasing demand that commitment may not be fast enough, or ambitious enough.

A recent report by the National Infrastructure Commission (‘Preparing for a Drier Future’, 2018) suggested that, without further action, there is roughly a one in four chance that over the next 30 years large numbers of households would have their water supply cut off for an extended period because of severe drought. In 2020 the NAO report ‘Water Supply and Demand Management’ concluded that ‘Reducing demand is essential to prevent water shortages as water companies are running out of low-cost options for increasing water supply. Defra has left it to water companies to promote the need to reduce household water consumption, and yet it continues to increase. Defra committed to announcing a personal water consumption target by the end of 2018 but has not yet done so’.

New reservoirs and transfers of water will be needed urgently, and the intention is for investigations and appraisal to be fast tracked in the interests of rapid approval. But it could still be 15 years before significant new resources come on stream. So what happens in the meantime? We are seeing climate records broken every year, and ever more extreme events are becoming the norm. The risk in any given year of a prolonged drought which would severely test existing resources and supply systems is very real.

Government policy for the past 20 years has been that in order to ensure water security companies must employ a twin track approach. This means working to reduce demand for water, such as by reducing leakage and helping customers to use less, whilst developing plans as necessary for new resources such as reservoirs.

However, as the NAO reported, the companies’ record on demand management has been indifferent to say the least. Their efforts have been hindered by weak signals from governments over the years about the importance of water efficiency in homes and businesses, and a failure to introduce measures which would support companies’ efforts by helping users to understand the importance and benefits of using water wisely.

Earlier this year (2020) a report from the Environment Agency suggested that over three billion litres of water a day could be saved through cost effective demand management actions. And given that heating water for use in the home is also a major use of energy there’s a double benefit in helping customers to use less, and in so doing to reduce their energy bills as well. But there’s a snag. Despite the fact that water companies’ plans for water security are predicated in part on the success of demand management measures, few householders know how much they are using: 46% think that they use less than 20 litres per person per day, rather than the 143 litres which is the average. They are in blissful ignorance of the fact that water security – or lack of it – will be as much a product of their actions as it is of those of their water company. Barely half of all homes have meters, and of those that do, few have smart meters, so it’s not surprising that awareness of consumption is so poor.

That the messages to use water wisely haven’t got through was demonstrated vividly in the record-breaking very dry and sunny May this year when demand was so high some companies struggled to get enough water through their networks to meet customer demand. That doesn’t augur well for future demand management in hotter drier summers.

For over 20 years some basic measures have been proposed to help manage demand. They are water labelling and standards for fixtures, fittings and white goods, linked to revisions to the Building Regulations. Defra consulted on these measures and more in July 2019, but has yet to publish a response; we learnt in October this year that policy development has been put on hold. In the meantime, customers are using and paying for a third more water than they need to, together with all the energy used in hot water-using appliances and fittings.

We need to remember also that many businesses are large water users. At a focus group session of large water users called by the Major Energy Users Council in October 2020, a number of participants drew on their experience of the energy market to argue that policy and regulation would be needed to set and enforce expectations on water efficiency. At present, they said, it’s not currently a priority and there are many barriers to it becoming one. All this adds up to an urgent need to join up policy thinking and regulation on water, energy and housebuilding. Integrating water performance metrics into the existing Energy Performance Certificate (EPC) would be a good start.

Homes that are water-efficient have the potential to reduce their water use by one third. Most businesses have a similar or even greater potential. Until this happens, water companies are abstracting, pumping and treating increasing volumes, with all the environmental impact that brings. Many rivers, particularly internationally rare Chalk streams that are a unique part of England’s environmental heritage, are being pumped dry. Water supply security is becoming ever more fragile, posing an increasing economic risk from our poor management of an uncertain resource, of incalculable value.

Professor Ian Barker is the Managing Director of Water Policy International. Views expressed in this article are those of the author, not necessarily those of Bright Blue.