Water & Floods

Climate change increases the likelihood of flooding. UK cities, towns and villages must adapt and improve their resilience to its impacts: currently, about five million homes are at risk.

A new long term funding strategy delivering a national standard for resilience to flooding is needed to better prepare and protect all parts of the country.

The National Infrastructure Assessment set out the case for this nationwide standard of resilience to flooding, with catchment based plans. These plans should evaluate the full range of options including traditional flood defences, ‘green infrastructure’, individual property measures and spatial planning.

In October 2021, the Commission was asked by the government to undertake a study into the risks associated with surface water flooding in England. This will form part of the work leading up to the second National Infrastructure Assessment, to be published in 2023. It is part of the strategic programme of work set out in the Baseline Report for the second Assessment, linked to the theme of climate resilience and protecting the environment.

Climate change and population growth puts increasing pressure on England’s water: there is a one in four chance of a serious drought before 2050. Boosting resilience, the Commission showed, is almost half as expensive as relying on emergency measures in times of drought (saving up to £20 billion over the next 30 years).

A twin-track approach of managing demand and enhancing supply is needed to deliver by 2050 an extra 4,000 million litres of water every day to reduce the risk of drought. This can be achieved by the government, regulators and water companies working together to deliver a national water transfer network and additional supply by the 2030s, halving leakage by 2050 and better managing demand.

The Commission welcomed draft plans announced in January 2022 by five regional water resources groups in England for water companies to collaborate in order to improve the management of the country’s water resources, in line with an approach recommended by the Commission in the first National Infrastructure Assessment.

The nation’s energy, water, digital, and transport systems are vulnerable to shocks and stresses such as those caused by heatwaves, accidents, surges in demand or flooding. Many risks are exacerbated by climate change.

With infrastructure systems increasingly interconnected, the knock-on effects of any failure can have major impacts on the economy and people’s lives. Our resilience study and its final report Anticipate, React, Recover: Resilient infrastructure systems, explored how the country needs to prepare better for the future and manage for uncertainty.

This means government setting clear resilience standards every five years, and infrastructure operators stress testing their systems to demonstrate they can meet resilience standards and address vulnerabilities. Infrastructure operators should maintain long term resilience strategies, and regulators should account for these when making their price determinations.

Government, regulators, and operators all have a role to play. The resilience framework the Commission recommends seeks to improve how infrastructure systems anticipate, resist, absorb, and recover from shocks and stresses, while valuing resilience properly and driving adaptation and transformation to meet the needs of the future.

In its work leading up to the second National Infrastructure Assessment in 2023, under the theme of climate resilience and the environment the Commission will be undertaking a project on asset management and resilience, considering how asset management can support resilience, barriers to investment. The Commission will also be examining how the wider use of data and technology can improve the way existing infrastructure assets are maintained, in order to improve their resilience to shocks.

Climate change, growing demand and increased digitalisation is putting more pressure on the country’s infrastructure systems, and strategic, long term investment across water, energy and telecoms is needed to enable them to adapt.

The Commission recommended in its report Strategic investment and public confidence that the government sets out a long term vision with strategic priorities for each of these sectors and give regulators new powers. This will enable companies to invest in sustainable infrastructure to reduce emissions, ensure reliable digital connectivity and build resilience to floods and drought, while still protecting consumers’ interests.

The high levels of investment will come from the private sector, but is ultimately funded by consumers, so they need to have confidence that their money is being spent on the right things and that they are not being exploited. Investors benefit from a regulatory system that is trusted by the public and government, so the Commission recommends that an updated regulatory system should more fairly balance the risk and reward between investors and consumers and work for all groups of consumers. The Commission also recommended a move away from monopoly providers to a greater use of competition, where appropriate, in the design and build of infrastructure service networks

The Commission recommends that government should set out a strategy to deliver a nationwide standard of resilience to flooding with an annual likelihood of 0.5 per cent by 2050 where this is feasible. A higher standard of 0.1 per cent should be provided for densely populated areas where the costs per household are lower. To deliver the strategy:

• By the end of 2019, government should put in place a rolling 6 year funding programme in line with the funding profile set out by the Commission. This should enable efficient planning and delivery of projects and address the risks from all sources of flooding.
• The Environment Agency should update plans for all catchments and coastal cells in England before the end of 2023. These should identify how risk can be managed most effectively using a combination of measures including green and grey infrastructure, spatial planning and property level measures.
• Water companies and local authorities should work together to publish joint plans to manage surface water flood risk by 2022.
• The Ministry of Housing, Communities and Local Government and planning authorities should ensure that from 2019 all new development is resilient to flooding with an annual likelihood of 0.5 per cent for its lifetime and does not increase risk elsewhere.

The Commission recommends that government should ensure that plans are in place to deliver additional supply and demand reduction of at least 4,000 Ml/day. Action to deliver this twin-track approach should start immediately:

• Ofwat should launch a competitive process by the end of 2019, complementing the Price Review, so that at least 1,300 Ml/day is provided through (i) a national water network and (ii) additional supply infrastructure by the 2030s.
• The Department for Environment, Food and Rural Affairs should set an objective for the water industry to halve leakage by 2050, with Ofwat agreeing 5 year commitments for each company (as part of the regulatory cycle) and reporting on progress.
• The Department for Environment, Food and Rural Affairs should enable companies to implement compulsory metering by the 2030s beyond water stressed areas, by amending regulations before the end of 2019 and requiring all companies to consider systematic roll out of smart meters as a first step in a concerted campaign to improve water efficiency.

Ofwat should launch a competitive process by the end of 2019, complementing the Price Review, so that at least 1,300 Ml/day is provided through (i) a national water network and (ii) additional supply infrastructure by the 2030s.

The Department for Environment, Food and Rural Affairs should set an objective for the water industry to halve leakage by 2050, with Ofwat agreeing 5 year commitments for each company (as part of the regulatory cycle) and reporting on progress.

The Department for Environment, Food and Rural Affairs should enable companies to implement compulsory metering beyond water stressed areas by the 2030s, by amending
regulations before the end of 2019 and requiring all companies to consider systematic roll out of smart meters as a first step in a concerted campaign to improve water efficiency.