Oral evidence: Future Flood Prevention, HC 115

Oral evidence, 29 June 2016.

Witnesses

Peter Simpson, Chief Executive, Anglian Water, Dr Stephen Bird, Managing Director, South West Water, Jo Harrison, Asset Management Director, United Utilities, and Dr Adam Comerford, National Hydrology Manager, Canal & River Trust, gave evidence.

Chair

Right, lady and gentlemen—ladies first—would you like to introduce yourselves, please?

Jo Harrison

I am Jo Harrison. I am the asset management director for United Utilities, which is the water company in the north‑west of England

Dr Bird

I am Stephen Bird. I am the managing director of South West Water. We cover Devon, Cornwall and a little bit of Somerset and Dorset.

Chair

I have a rough idea of where you are.

Peter Simpson

I am Peter Simpson. I am the chief executive of Anglian Water. East Anglia is a funny place to describe in terms of the geography. We go from Scunthorpe in the north down to Tilbury, and right the way across to Milton Keynes and Daventry in the west.

Chair

With a lot of hills in between.

Dr Comerford

I am Adam Comerford. I am the national hydrology manager for the Canal & River Trust.

Chair

Thank you very much and thank you very much for waiting. It is great to see you here this afternoon. I will start off with the first question, on infrastructure resilience and capacity.

Peter Simpson

How do we increase the resilience of our infrastructure? How do we increase capacity?

Chair

The question, in a way, is: can you increase your infrastructure and your capacity? Then that also gives us resilience. Can we incorporate all of it?

Peter Simpson

Okay. The first thing to say is that the more surface water we can get out from entering foul systems and combined systems, the more resilient our systems inherently become. A good example for us in Anglian is Milton Keynes. Milton Keynes is a new town. It was designed with separate foul and surface flows. When it rains heavily in Milton Keynes, the flows are managed very well through balancing lakes around the town. When the water comes in from Newport Pagnell, which is a combined system also on the same overall system, it is a very different story. There is definitely something in the idea of how we, as organisations, promote the idea of keeping surface water out of combined and foul systems. How can we use systems above the ground, like sustainable urban draining systems, to better manage that? That helps. That is going to give more resilience; that is going to give more capacity. As a business, we have about 7,500 above-ground assets, which would be water‑treatment works, water-recycling plants, pumping stations on water and water recycling. We assess all of those in terms of risk of pluvial, fluvial or coastal flooding. Of course, we have a very long coastline and that is something acutely in our mind with such a low-lying area. We asses those and we flood defend those assets that we see as the most critical and most important. That links into another point, which is about how you think about flood risk. We work very closely with some very good lead local flood authorities on assessing risks overall in the areas where we operate. It is no good us thinking about purely our assets and what happens with assets that we have flood protected if, for example, the local power distribution company has transformers which are flooded and the power goes down. It is really important that we join together. There are dependencies between all of our various assets in thinking about what the risk is overall. The lead local flood authorities play a really important role in that.

Chair

Do other speakers here have anything to add? I am interested in where capacity could take out water that potentially could flood, either with reservoirs or holding it in the land source. Stephen, I do not know whether you have a project in Exmoor that may fit that bill.

Dr Bird

Indeed, Neil. I will build on what Peter has started with. On releasing capacity from sewers by taking out surface water, we are definitely into that. I will come to that later, because we are taking the principles that we use in the upper part of the catchments, our upstream thinking process, where we work with partners in the head areas of catchments on natural engineering solutions—in other words, dampening and reducing the flows. It would be true to say that upstream thinking, when we first brought it into our planning 10 years ago, was much more focusing on improving the quality of the water that was entering the rivers because we were abstracting that water further down the river. That gave us the treatability benefit and, therefore, you could justify investing customers’ money on land and assets we did not own, because customers would see the benefit of a reduced treatment cost. As we started to do the research with universities like Exeter University on quantifying the benefits of that, it was also clear that, as we were reinstating peatland, moorland bogs and common grasslands, apart from delivering improved water quality, we were delivering significant attenuation or a sponge‑like effect in the upper part of the catchment. If you take the work we have done on Exmoor—I know we have taken a number of visitors there in the past—we have five years’ worth of data now where we have grown the Mires peatbog area on Exmoor, with 200 monitoring sites and endless analysis every which way. We have raised the water table by about 2 cm. That does not sound very much, but, in terms of the volume of water that will hold, it is about 6,630 Olympic‑sized swimming pools. As a scale of natural management and attenuation of flow—

Chair

That would be a fairly large reservoir.

Dr Bird

It would, indeed. The important thing to remember is it suits the particular circumstances of the south‑west because we have very flashy rivers. Our challenge is a rapid flood that rises and falls. We are trying to take the top off the peak of the hydrograph. You have to bring soft engineering to bear as well as hard engineering. As Peter said, we work very closely with the lead flood authorities, Exeter City Council and Devon County Council, down in Exeter. At the same time as we are delivering upstream thinking, we are also engaged in financing part of the Exeter flood defence scheme, which has been upgraded, given the experience of the floods back in 2012. We are also engineering parts of defending our strategic assets.

Chair

When you say you are involved in the scheme in Exeter, are you involved with that through direct funding?

Dr Bird

Both. We are partly financing. One of the challenges following the Pitt recommendations was to get a closer alignment of investment cycles in relation to lead flood authorities, highway authorities, the Environment Agency and water companies. We have tried to align our capital programme so that we can put money into a capital solution so that we get better value for money. Sometimes we will lead on delivering that. We delivered a scheme in Plymouth recently, with Plymouth City Council and the EA, where we built the scheme and they gave us their money, for Colebrook. That was very successful in terms of the situation of surface water drainage in Colebrook. In Exeter, the EA is leading. We are partly financing some of that significant investment. We are also engineering some of the solutions around sheet piles to protect our strategic infrastructure at the head of the Exe estuary. It can be a mixed economy of delivery, but in my experience soft engineering and working with partners in the catchments is as important in a situation where you are facing flash floods as is the harder engineering.

Chair

Thank you. I do not know whether Jo or Adam want to add more to that question or whether it has largely been covered.

Jo Harrison

It has largely been covered. Like Stephen, we spent the last 10 years delivering sustainable catchment solutions across the Lake District and the Pennines. We have seen huge improvements in terms of the attenuation of water, primarily to actually improve drinking water quality. That focus on soft engineering solutions is something that has been established and thought through. Potentially a bit differently, in the north‑west we have a significantly larger amount of combined sewers than other areas. One of the things we are really trying to focus on is how we manage that combined sewer system that takes surface and foul water to enable that capacity to be realised. We are undertaking a very major scheme in Blackpool to basically take out as much of the surface water as possible and introduce sustainable schemes all around Blackpool, to try to better manage that situation, reducing spills from the sewers and the flooding associated with that

Dr Comerford

Our situation is quite different from the water companies’. The Canal & River Trust is first and foremost a navigation authority. We are a charity that looks after 2,000 miles of canal and river navigation across England and Wales. About 10% of our waterways are in Wales, and about 90% are in England. First and foremost we are there to manage water levels for navigation purposes. The question around infrastructure, resilience and capacity is a slightly different one for us.

Chair

Sorry for interrupting. Would your canals not be sources of water as well, for the water companies to abstract from?

Dr Comerford

They are, in that we have specific transfers in a couple of locations where the water is deliberately taken in, perhaps from one river, routed along the canal and then is abstracted later on for water companies. There is a link there. Generally, the purpose in terms of the way the canals were designed 200 years ago was to try to avoid the surface water inflows coming through in the first place during flood events. The canal engineers—my predecessors—very clearly understood this and designed structures to try to avoid the inflows taking place.

David Simpson

You are very welcome. Is sufficient data available to you to manage water management systems effectively? If not, what could be done to improve that? The previous witnesses talked about collaboration among different agencies. Has that been as effective with you or can it be improved as well?

Peter Simpson

It has moved a lot in recent years. Its starting point is information we get about the impact of weather on river flows. We are in a different place from where we were a few years ago, and it is excellent. Particularly the Met Office and the Environment Agency should be commended for some of the work they have done post Pitt review. When you get down into what goes on in a regional area with local flood authorities, we share a lot of information through our GIS systems on the assets we have, the maintenance programmes we are doing, the capital investment we are planning, even down to the hydraulic models that we have in our systems, so we can get one view of what is going on. It is not an endpoint; there is always an opportunity to improve what you have. But in recent years, certainly in our area, we have come an awfully long way. Increasingly we are seeing a more common picture of what the consequences and impacts are and therefore what we need to do in terms of plans moving forward.

Jo Harrison

As Peter describes, the collaboration between local authorities, the Environment Agency and water companies has increased really significantly over the last four or five years. We are still sharing some of our thinking to some extent. One of the great learnings we have had from the Cumbria floods is the need to have a very joined‑up approach to looking at water management in a catchment context and thinking about that from a top-down perspective. What you are looking at is not necessarily the sum of the parts of the individual needs of the different risk‑management authorities, but you are starting to think in a much broader sense, looking at where you can best direct that investment.

David Simpson

It is a better partnership. Is that what you are trying to say?

Jo Harrison

It is going beyond partnership to really collaborative working and a top‑down approach to water management within the catchment context.

Dr Bird

To build on that, I would agree that, since the Pitt recommendations and the floods Act, working with lead flood authorities has improved our sharing of information. If there is a weak area, I would say that some lead local flood authorities do not have huge amounts of data, analysis and real‑time information about their highways and highways drainage. Given the impermeable nature of highways and the extent of it, that is a bit of a gap in terms of the models, to my mind. More could be done on the part of the lead flood authorities to increase the nature of their real‑time understanding of floods. Throughout our sewerage systems we have sensors, monitors, eventuation monitors and flow monitors, and we can largely see that in real time. Therefore, we can potentially use real‑time control to optimise the storage in sewerage systems, where we have big tunnel systems, as in Plymouth, for example. We can manage our flows to some extent, but there is not that nature of technology developed on highway drainage; it just turns up in some circumstances. There is a bit of a gap.

David Simpson

Improvement could be made there.

Dr Comerford

To add to what Stephen said in terms of monitoring our canal system, we have over 600 water‑level monitors around the network. We share that data with the Environment Agency and Natural Resources Wales in real time. It is a live data exchange. In return, we receive water‑level data from rivers and rain gauges back from those organisations. That helps us to make more informed decisions about water‑level management on our canal system.

Peter Simpson

One thing that comes out of this is a much better understanding of where investment needs to be made. I think about what is happening in one of the areas that are more progressive in our region, which is Lincolnshire. With the Lincolnshire lead local flood authority, we now have an annual programme of work so every partner understands exactly what they need to do, what contribution they are making, what impact it will actually have, based on a much better understanding. Notwithstanding the point Stephen made that it is not perfect, it is a much, much better basis for investment than we have ever had before. That is terribly important.

Chair

Do you think that is a really good step forward? Do you need to build on it?

Peter Simpson

Yes. Of course, now, because Defra allows partnership funding opportunities, in the next few years we are investing £8.4 million into other people’s schemes for joint benefit. That is a really positive development.

Chair

We would be very keen to have your money here. There is no doubt about that.

Peter Simpson

We all benefit. You get a bigger bang for your buck. That is the point. That is the benefit. We all benefit.

Dr Bird

Jo touched on the work we are all doing on voluntary SuDS: the removal of surface water from existing assets in order to free them up to take foul sewage rather than surface water. We have taken the upstream thinking principles into downstream. We are looking at the retrofit of SuDS, which is not as easy as it sounds, depending upon where the development is. If we are looking at redeveloping contaminated land etc, that presents different problems for developers than if we are redeveloping land that is fairly benign. The introduction of green infrastructure to slow flows down in urban areas and reintroduce that permeability that you talked about earlier is part of our toolbox. We are spending the equivalent on downstream thinking—about £10 million over the next five years—that we are spending on upstream thinking, because, again, in our patch all the people tend to live at the end of the rivers, in the estuary, on the coast. Therefore, it is important to give protection in an urban environment, as well as addressing the issues in headwaters.

Rebecca Pow

This links to some of the things you have mentioned already. It does swiftly go on; I am not going to waffle over all the information that a lot of you have already sent in, but I will look particularly at the role of water companies and how you might work better with the planning process, in order to potentially reduce the amount of water you ultimately have to treat, which ultimately costs you money. That might save you money, and might also help the planet and the environment. Rather than going over all the information I have here, how about if you each suggest what you would like? What would be good? What would help this? Would you like to work better with the planning system or would you like to take over some controls or powers?

Jo Harrison

The important thing is to remove the automatic right to connect surface water to sewers, because we have very little control around what comes into the sewers and therefore, when we see the impacts of new developments, that is really the primary impact that we see. A better focus and management around that would be one of the particular issues that I am focusing on.

Rebecca Pow

Does everyone agree with that?

Peter Simpson

Yes.

Dr Bird

Yes.

Rebecca Pow

Okay. We are talking especially about SuDS.

Chair

Playing devil’s advocate, all you are doing is making sure that you do not have to fund that, and yet you are already being funded, to some degree.

Dr Bird

In terms of removal of the right to connect surface water, it is very much about surface water; it is not about foul water. That will continue. We have that duty and we will continue to discharge that duty. It is about being able to refuse surface water. It may be that sometimes the connection is the only answer, but giving us the right to refuse engages developers in thinking creatively about alternatives to that.

Rebecca Pow

When we spoke to the Housing Federation, a lot of them assured us that they had put in lots of SuDS and, in fact, they had done a lot of this work. What is your view?

Peter Simpson

In some big developments you see SuDS being used, and they are very effective and work very well. In others, you do not. Picking up the point that Stephen has made, particularly when you are talking about smaller development in already regenerated areas, for example, you sometimes do not have some of the land that you need to create SuDS. Sometimes you end up with hybrid solutions, where you may have some of the traditional engineering solutions, which might be bigger underground tanks, combined with attenuation ditches and swales, to come up with something where you have a little bit of both. You see some of that. You have to be careful about making broad generalisations. The point that Jo made is an important one: it would be good if a starting point was SuDS and you justified coming away from it.

Rebecca Pow

Do you think you should be a consultee on planning developments?

Dr Comerford

In terms of planning developments, we are already a consultee for our canal network and any planning applications that are close to our reservoirs or canal feeders that bring water from the reservoirs to the canal system. We get a chance to comment on those. In terms of rights to connect, there is no formal right to connect to our canal network for surface water, so we get the chance to exercise discretion on whether we want to accept surface water run‑off into our system from a developer or not, and we get to weigh up whether it is mutually beneficial and whether we want to accept that water or not into our system. We do believe that, in terms of the SuDS provisions, the more formal provisions set out in the Flood and Water Management Act 2010 would be good if they were brought in, because that would ultimately provide a better understanding of the flows, better long‑term management, better design of the SuD systems for those that are going to come into our canal network, so we can plan with confidence, knowing the types of flow rates we might expect to receive into the waterways.

Rebecca Pow

What would the other water companies like to recommend?

Dr Bird

I believe that it is appropriate that we are statutory consultees to planning. Currently, we are invariably consulted, and more often than not our advice is heeded, but not always, because each individual planning authority has its particular priorities. In reality, some planning authorities are better equipped to make judgments around the associated flooding risk than others, simply because of a skill shortage or whatever. If we were made statutory consultees, then we could introduce a broader catchment‑based thought process into the planning decision. We could say, “What are we doing at headwaters? Is that likely to give you a benefit in 10, 20 or 30 years? What is possible in urban environments to green up the infrastructure over the next five or 10 years?”, so that any individual planning authorities can make those decisions in a much broader context. Even the EA would not have that whole picture.

Rebecca Pow

I was just bringing in Peter. The Environment Agency is consulted on lots of these projects, but not you. Is that right?

Peter Simpson

Yes, that is right. We are not statutory consultees, but we are engaged in the process. We all try to influence, through lots of different means. For example, lead local flood authorities are also statutory consultees and so they have the ability to influence. If we work with them and inform them, that gives the ability to have our voice heard. Stephen was not saying that we are not heard and do not have influence; we do, but, ultimately, being a statutory consultee is another level of potential influence.

Rebecca Pow

Do you think sometimes you are backtracking? Sometimes, something happens and is put in place, a development gets developed and you have to take the water conditions.

Peter Simpson

That does happen.

Rebecca Pow

Jo, you might find yourself having to backtrack, saying, “This does not work” or “There is too much water coming into the system.”

Jo Harrison

We have found significant benefits since lead local flood authorities have become statutory consultees, and we work very proactively with the planning authorities and the lead local authorities to try to ensure that we get the right outcomes in terms of surface water management. Looking retrospectively at some of the developments over the last five to 10 years, there are significant problems associated with the fact that there was not due consultation associated with a development.

Chair

What is the role of water companies in managing flood risks? Do you have a role? Should you have a role in managing flood risk?

Dr Bird

I believe we should, because we have extensive infrastructure scattered all over catchments. We have something like £8 billion or £9 billion-worth of assets spread across Devon and Cornwall, all of them potentially vulnerable to floods, whether that is coastal, storm surges, tidal influences or fluvial flooding. All of that is essential infrastructure in terms of the protection of public health, in terms of keeping regional economies going, etc—as important as road, rail connections and so forth.

Chair

You have all these assets. Do you think you are as connected into the Environment Agency and the local authorities as you should be, or are there other systems that could be put in place?

Dr Bird

Since the floods Act and the creation of lead flood authorities, as Peter has described, there has been an impetus on all those parties to get together and work much more strategically and coherently than prior to that. My view is that, while it is early days, it is working very well. There are some speculations around other experts. We referred to Dieter Helm’s paper about the potential creation of a catchment operator that would control the activity. There are a whole range of beneficiaries from a catchment—

Chair

Within a catchment area?

Dr Bird

That is right. That is an interesting model, but my view is that at the moment lead flood authorities are working well and we are learning all the time. We can bring things to the party in terms of working in the headlands, because we have a range of drivers for that, and generally those bodies listen to us. If there is one plea, it is this: it would be beneficial if Defra, in its 25‑year vision and its guidance to Ofwat, could perhaps give a bit of a stronger steer on the water industry’s engagement in the resilience agenda and a view about what it is reasonable for us to invest our customers’ money in. Yes, we need to consult customers; we need to make sure that they are comfortable with the investments that we might make, whether it be in the uplands or in urban areas. We will need to take investors with us in the sense of what is appropriate for water companies—

Chair

You want Defra very much to take that on board.

Dr Bird

Given the long‑term nature of threats around climate change adaptation, the experience of the floods in the north and the extremity of those floods, to my mind, we have to plan more aggressively for those sorts of events. They are so infrequent that they are very difficult to engineer for, but we need to think about how we plan for them. That is not something you can invest in in five years; it will take 25 years and it needs to be part of that vision.

Jo Harrison

Water companies are not risk‑management authorities under the Flood and Water Management Act. We are members of the regional flood and coastal committee. We are active as part of the lead local flood authority organisation. We fully play our part in the whole flood hierarchy that exists. As Stephen said, yes, it is being established, but we are seeing it be really effective. One of the interesting things we have seen in Cumbria is that the Cumbrian floods partnership has been formed, following the flooding in December, and now that is morphing back into the control of the established lead local flood authority mechanism. While there has been an additional hiatus of activity, which is understandable in those circumstances, it is recognised that the existing governance was appropriate.

Chair

It is about keeping up momentum, isn’t it? That is a lot of the trouble with floods in this country. We have a big flood and it is all very hyped up, and then it dries up again and everybody goes back to where they were. It is making sure we keep it going.

Peter Simpson

I agree with everything that has been said. I would just reinforce a point: the lead local flood authorities are terribly important. We should highlight really good practice, try to identify what it is that leads to that good practice and encourage all the lead local flood authorities to reach the higher standards we are setting across the country. Water companies have a key role; we cannot not have a key role, for all the reasons that Stephen said. Resilience is an important word. We focused a bit in the conversation here on how we protect, how we avoid, and that is really important; and that is a key part of how we have been thinking about building a more integrated water supply infrastructure. But we should also remember that resilience is about bounce‑back and recovery. It is really important not to lose sight of the mechanisms that exist around local resilience forums and the response we make on the ground, which is so terribly important, after flooding happens. I just make the point that we should not lose sight of bounce‑back in some of the discussions here. It is not just about how you prevent; it is also about saying, if it does happen, how we respond to that in a joined‑up way.

Dr Bird

Peter makes a really important point. Our experience of Boscastle and its recovery was pretty formative in terms of getting infrastructure back in place. Our experience with the Dawlish seawall collapse and people having to leave their homes means that we are working very effectively with the local resilience fora, but we need to be ready to respond and particularly focus on vulnerable customers in those circumstances. We have a lot to bring to that management of recovery, because we are in touch with every single customer connected to the water and sewerage supply in Devon and Cornwall, so we know where the vulnerable customers are. That will not always be the case for the Environment Agency, the police or whatever.

Ms Ritchie

This is to the Canal & River Trust. How can waterways be managed to ensure maximum capacity over a catchment and minimise flood risk during extreme rainfall events?

Dr Comerford

First and foremost, our network is about 2,000 miles and we cut across many catchments. Our canals interface across catchment watersheds, across catchment boundaries, so they have the potential to take water from vulnerable areas into less vulnerable areas, but also vice versa. The design of the canals principally was set out to avoid the inflows of that water, as I said earlier. There are plenty of examples in recent times where we have accepted run­‑off into our network, where it has provided a benefit to developers because it has enabled them to undertake a development that could have otherwise not happened. We have been able to receive that water and manage it effectively where we have the capacity. On our capacity, it is important to say that what we call the freeboard—the tolerance in our network of accepting water—is quite modest. The ability to take large volumes of floodwater is not always that great, and the canals can then potentially pose a flood risk to others if we do not manage that effectively. Our telemetry and water‑level management systems help us to control that through automated structures that allow us to pass the water to other watercourses safely.

Ms Ritchie

How feasible is the idea of draining canals ahead of floods?

Dr Comerford

It is often put to us, usually straight after a flood event that has affected canals, “Could you not have emptied the canals beforehand, conveniently moved all the boats out of the way? Then the canals would have created this amazing flood‑routing channel.” The practicalities do not really stack up. The canals themselves were never designed to take large flood flows. Their conveyance, the hydraulic capacity, is fairly modest. The impact on customers would be quite considerable and—dare I say it?—the flood and rainfall forecasts are probably not so precise that we could drain down specific sections of canal network to accommodate the flows and then provide a difference in terms of flood risk management. It is worth saying, in the December floods, our canal structures were grossly overwhelmed with the scale of the flooding. In the Calder Valley, through Hebden Bridge, the canal was completely inundated with the flows from the river Calder. There was nothing that we could have done. If we had emptied out the canals beforehand, they would have provided a very modest benefit before they were filled back up and then more again.

Ms Ritchie

Have any plans yet come out of the Canal & River Trust’s work with the Environment Agency and, if they have, could you share those with us?

Dr Comerford

Yes. Even though we are not a risk management authority, we certainly work closely with the Environment Agency and we have been having a lot of follow‑up discussions, following the winter floods, to look at locations where the canal and the river catchments are so intertwined that schemes that could benefit the river would also benefit the canal network and vice versa. There are a few examples in the Hebden Bridge area where we are looking at specific flood alleviation schemes that may take the floodwater into the canal safely, rather than it happening in an uncontrolled way, and then route it to a suitable point where it can return back to the river catchment.

Chair

As far as the water companies are concerned, playing devil’s advocate, what would you like to see the canals do, or are they absolutely perfectly run, as far as you are concerned?

Peter Simpson

I recognise the practical limitations of what can physically be done there. The worst thing in these situations is to imagine that these are possibilities and rule them into your thinking. It is better to be clear that they are not and work on other solutions. I recognise the practical constraints there.

Dr Bird

I was drawn by the parallels with the debate that often goes on about reservoirs. “If you can forecast a big event, why can you not empty your reservoir beforehand?” My plea would be that you might replace one resilience challenge with another. Should that forecast rainfall not happen—

Chair

You would have no water.

Dr Bird

—you would be staring a drought in the face, a year or 18 months down the line.

Chair

The weather can turn very quickly. In the first two years of the last Parliament, we talked of nothing but draught and thereafter virtually nothing but flood. It can change quite quickly from having a lot of water to having very little water. I accept that.

Peter Simpson

You have to think about the different geographies as well. In the east of England our reservoirs are generally pump‑storage reservoirs, so they play no part in this at all, even the really big ones. Up in the north‑west, it is a different situation.

Chair

The part of Somerset where I have my farm is very flat and the water just does not flow very fast anyway, so there is no flow on the canals as well as the rivers. It is interesting.

Dr Comerford

I would have said the same. We have 74 reservoirs that are primarily designed for canal supply, and there is only one in the country where we already hold the water levels down to provide some flood attenuation. For the rest, we try to maximise the refill so we can get through the boating season the following summer.

Dr Monaghan

Jo, what investments is United Utilities making in flood‑risk mitigation, including partnership funded flood defence schemes and national catchment management?

Jo Harrison

We spend about £100 million to £120 million every five years specifically on our sewer flooding programme. We have historically, as an industry, been quite focused on sewer flooding as a cause of flooding. It has been an area where we have moved from providing very civil engineering‑focused, tank‑type solutions, in terms of increasing the capacity on our networks, to more recently understanding the much greater benefit we get from improving operational and dynamic control of our sewers. We spend about that much, and we are really focused on making sure we reduce the impacts on our customers. In terms of more general flood defences, we look to make sure that our treatment works are protected from the most extreme floods. A number of our water treatment works over the last five or 10 years have been protected to ensure that we would not have infrastructure impacts. That really followed the instances of flooding in Severn Trent’s experience with their Mythe water treatment works a number of years ago. We also jointly invest in coastal flood defences. We have undertaken some work with Blackpool and Fylde Council to build some coastal defences in the Rossall area on the Fylde coast. Then we are investing, as we have talked about, in the removal of surface water in places like Blackpool, where it is particularly flat so we have continued issues with the management of surface water. We already talked about retrofitting of urban sustainable drainage. We are looking at a number of different schemes, to look at the viability of that, particularly in the Greater Manchester area.

Dr Monaghan

It is around £120 million currently.

Jo Harrison

Yes.

Dr Monaghan

Could it be more?

Jo Harrison

We have to balance the level of expenditure with customers’ priorities. We could spend more looking at the problems from sewer flooding, but the expenditure of that much enables us to reduce the level and frequency of flooding in our area over the next five years by about 50%, which is a significant reduction. We would continue to plan for that level of improvement going forward.

Dr Monaghan

Stephen, what about South West Water?

Dr Bird

It is a similar range of things to those that Jo touched on. I touched on the investment in the upstream thinking catchment management initiative; that is about £10 million over five years. We are investing a similar amount in downstream thinking, SuDS and retrofitting SuDS; that is another £10 million. In terms of the sewerage assets, we are investing in both upsizing them to accommodate growth and housebuilding, and additional storage, in this instance to protect bathing waters and shellfish waters in the south‑west. They are quite a driver, because that gives us additional capacity in the winter, as a by‑product of protecting those bathing waters in the summer from frequency of overflows. That will be of the order of £100 million over five years around those sorts of areas. Again, like Jo, we make bespoke investments in what we would consider to be vulnerable assets. If we take the Exeter flood back in 2012 and the flooding of the railway in Cowley Bridge a few years before, we had invested in a flood defence scheme for Pynes water treatment works, which in the same valley—virtually the same location. That was a £4 million investment to protect that strategic supply for Exeter against—sorry to use the parlance—a one‑in‑100‑year storm. The advantage of that particular investment in that infrastructure is that we can add to it. You could raise the level further if, when you look at climate change adaption, the need is to protect, say, against a one‑in‑1,000‑year event. It has that sort of flexibility in terms of its structure. In addition, as part of our local resilience forum responsibilities, and in the light of the Letwin review that is going on at the moment, we are reviewing investment in temporary flood defences—i.e. rather than building physical structures, having defences available so that you can deploy to protect a water pumping station that might be vulnerable or, indeed, work with power companies to protect power substations that might be critical to keeping our infrastructure going. It is that sort of mixture. It is that scale of investment in each five year cycle.

Dr Monaghan

£20 million to £25 million—something like that.

Dr Bird

It is of that order: £25 million to £30 million a year, if you add all those components together. It is £150 million to £200 million every five years.

Dr Monaghan

What do you think would encourage South West Water to have a greater involvement and private investment in all these mitigation schemes?

Dr Bird

One of the big challenges from our upstream thinking work is the inability to value some of the benefits that you get from managing the natural environment. As I said earlier, the prime value from upstream thinking for us was in terms of reducing the treatability cost for water that we abstract down at Pynes. That allowed us to ask our customers whether they were willing to pay a certain amount to invest in upstream thinking. There is no value currently derived from delivering resilience services in terms of reduced flooding; there is no market in that. We are doing it and we are delivering a benefit, but there is not a value to that. Carbon sequestration comes from peat reinstatement and so on. Through the development of a market and a payment‑for‑ecosystem‑services process involving beneficiaries of the activity in the catchment—that could be the lead flood authority as a beneficiary; it could be a water company; it could be a local business that might not be flooded because of that work, through business rates or whatever—if we can put a value on those services and monetise that, then clearly a number of different incentives would appear to our investors and therefore we could do more. Unless we value what we do in those catchments in a way that society can recognise, it is very difficult to justify to our customers, on just the treatability measure, to do much more than we are doing already.

Dr Monaghan

Have you any idea about how that value could be established?

Dr Bird

There is a lot of research on the part of the Natural Capital Committee, the body that is supporting the Treasury, chaired by Dieter Helm, to look at how we can quantify that. Exeter University and others are employing experts in their Land, Environment, Economics and Policy Institute to try to bring environmental value, economics and willingness‑to‑pay research together, so that you can create new markets and farmers can be paid for reducing an urban area’s flooding risk, a water company’s treatability cost or a business’s insurance cost, because they happen to be located on a floodplain. We are very supportive of that work. We are working very closely with that university and that particular group, and the hope is that Treasury and Defra will give that guidance when Defra comes to give the next level of strategic guidance to Ofwat in its price review process, which will trigger post‑2020, so it would come in 2018‑2019.

Peter Simpson

Shall I keep it brief? If we think about the pot that is associated with the sewerage system, it is £86 million over the next few years. That includes investment in sustainability urban drainage systems, where they are appropriate; it includes upgrading existing infrastructure. Within that, £8.4 million is this partnership funding that I referenced earlier on, where we get a much bigger bang for our buck. Within that, for example, we have £3 million towards a £33 million scheme to protect Clacton‑on‑Sea—coastal flood defence. Over the last few years, in the last AMP period, we spent something like £14 million on protecting those specific assets that I referred to right at the beginning. We looked across our asset base, identified those where felt there was the greatest risk and the greatest consequence of flooding and invested in flood protection around those. There is a programme that we have—

Dr Monaghan

The question is not so much about your assets; it is more about partnership‑funded flood defence schemes and national catchment‑management issues.

Peter Simpson

The £8.4 million is a contribution to partnership funding for other bigger schemes, which benefit our assets—obviously, our customers are the same—but have other benefits as well. That has been a really positive development—Defra making that available—because we all get a bigger bang for our buck. Rather than us flood‑defending a particular point asset in that area, we take the money we would have put into that and contribute it to a bigger scheme and, lo and behold, as UK plc, we get a bigger benefit.

Dr Monaghan

It is £8.4 million for the year.

Peter Simpson

It is £8.4 million over the five years, and we are already working on the next tranche for the next price review.

Dr Monaghan

That is one point something million this year that you are investing into schemes.

Peter Simpson

We built the schemes in the last AMP period. We identified the opportunities for those investments with all our partners.

Dr Monaghan

It is a fairly direct question, I think. We are trying to understand the scale of Anglian Water’s investment. From what you are saying, we have got to a figure of somewhere under £2 million for the year, which does not seem to be particularly significant. You may want to be clearer about what it is that you are doing.

Peter Simpson

The first figure I said was £86 million.

Dr Monaghan

What is over what period?

Peter Simpson

Over the five years of this AMP period. That covers the investment we are making in upgrading current assets; it includes some of the things we have referred to before in terms of introducing—

Dr Monaghan

Sorry, I am going to take you back again. It is not about your assets; it is about partnership working, flood defence schemes and catchment areas—your contribution to that bigger picture—not so much about your assets in particular.

Peter Simpson

Of the £86 million, our contribution to those partnership funds is £8.4 million, like the scheme I talked about in Clacton‑on‑Sea. We get a much bigger benefit. If you take Clacton‑on‑Sea, for example, that is a £33 million scheme. Our contribution to that is £3 million. That is £3 million that we would have probably spent trying to defend point assets around there; we would defend some of our individual assets from flood risk, but, by contributing to this bigger scheme, we get a bigger benefit and so does everybody else.

Dr Monaghan

You have said that already. What is it that you are contributing overall, on an annual basis, towards private‑public partnerships?

Peter Simpson

The contribution to those broad schemes is £8.4 million over the five years, which is committed to schemes over this five‑year period.

Dr Monaghan

That does not seem to be particularly significant. What would encourage Anglian Water to start investing more and having a greater involvement in private investment?

Peter Simpson

To be fair, the opportunity to identify schemes in which we could co‑invest was something we were right at the forefront of. The £8.4 million is very much the start of what we hope will be a much bigger opportunity as we go into subsequent funding periods. If you went into the east of England and talked to the lead local flood authorities and the local authorities we work with, they regard this sort of investment as very positive. With them, we developed the opportunities across multiple schemes to make those investments, very much at the start of what we thought the opportunity was for the future. It is a very positive step.

Dr Monaghan

I am not disputing that. The question is much more about what would encourage Anglian Water to do more.

Peter Simpson

To demonstrate with our partners the success of the approach that we have taken.

Dr Monaghan

How would we go about doing that?

Peter Simpson

Show the schemes; show the value for money that has come out of the schemes. Have the schemes delivered, because I am talking about schemes that we are jointly seeing delivered at the moment. See them delivered and show the benefits that we all get as a result of them. That is the best. The proof of the pudding is in the eating.

Dr Monaghan

Similar issues to the ones that Stephen highlighted.

Dr Bird

Our downstream thinking initiative has only just started, whereas upstream thinking has been going 10 years. We are doing pilots to prove the benefits, because, when you talk to customers about their willingness to pay, you have to be able to quantify why it is appropriate for your water and sewerage bill to finance that.

Dr Monaghan

You were very clear on that earlier. Adam, it is not really your area, but do you have a comment that you want to make?

Dr Comerford

From our perspective, we have not had direct involvement with any partnership funding, but there are a number of locations where flood alleviation schemes have gone ahead that are funded by others, where our assets are being changed, such as the Leeds flood alleviation scheme in the city centre. A number of our structures are being changed, funded by Leeds through that partnership‑funding route, which will reduce the overall flood risk to the city of Leeds. We are involved with that, if not making major financial contributions.

Dr Monaghan

Is there scope for further activity, do you think?

Dr Comerford

Potentially. Our funding mechanisms are very different to the water companies’. As a charity, we get a government contract, but that goes into a general pot of investment, whether that be on reservoirs, locks, weirs, sluices, embankments or bridges. We have to pick and choose where our investment goes. We are not a risk management authority, as I said earlier, so undertaking a flood-risk management function is a very modest part of our responsibility. We are, first and foremost, looking out for and investing in our own assets that could reduce flood-risk liabilities to ourselves and risks to others—for example embankments and making sure our reservoirs are safe in terms of the reservoir legislation.

Chair

Thank you. Paul gave you a good grilling there on your funding, so well done, Paul. Can I thank Jo from United Utilities, Stephen from South West Water, Peter from Anglian Water and Adam from the Canal & River Trust? It has been some very good evidence. Thank you very much for coming along this afternoon. Can I also thank Margaret and Paul particularly for staying on here to the very end? That is most appreciated. Oral evidence: Animal Welfare: Future Flood Prevention, HC 115