Water Ways

Whether there’s too much or not enough, water management is never simple. Make sure you know your water rights following the recently passed Water Act 2014.

Extremes in weather conditions, which were once the preserve of less temperate climes, are now all too familiar in the UK. Who could forget last winter, when Britain was hit by 12 winter storms in a month and the subsequent flooding, such as on the Somerset Levels? Or 2012, when a dry winter and a wet summer also produced severe floods?

The government’s Committee on Climate Change believes that more intense bursts of winter rainfall and a pattern of droughts, is here to stay.

“There can be no doubt that managing water as a resource will become increasingly important not just to landowners and producers but for the whole of society,” says Peter Bennett of Savills Agribusiness.

The government has responded by legislating to improve water management and reduce waste and environmental damage. The Water Act 2014, passed in May, has brought about a series of changes; another Act is planned to implement major abstraction reforms. So, what are the main areas that will affect farmers and landowners?

 

Reforms in abstraction licences

Irrigation licensing is facing its biggest overhaul for 50 years with the reform of the abstraction regime. The official process has only just begun and implementation is 10 years away, says Paul Hammett, NFU national water resources specialist.

“The government is committed – with its Water White Paper – to introducing a reformed water abstraction management system able to ‘promote resilient economic growth while protecting the environment’,” says Paul. “Since farmers and landowners own around two-thirds of all abstraction licences in England and Wales (while abstracting less than 1 per cent of water), we should be in a strong position to shape changes.”

Peter says it was clear from the public consultation earlier this year that a significant “fear of change factor” existed. In the consultation, Defra offered two options: “current system plus” or “water shares” (the details of which were still under discussion). The majority of respondents favoured the former.

“What is likely to happen is that no new summer licences will be granted in most rivers and, for those looking to renew unused licences in over-extracted rivers, they will have to prove their need,” says Peter. “Winter abstraction licences will also face a more stringent process; a typical licence today might read 500 litres per second on the flow; one applied for in the future might say 1,200 litres per second,” says Peter.

The Environment Agency has announced that new “renewal” procedures will apply to all time-limited licences that are due to expire in 2015 and beyond. Assessments will be made to ensure they comply with new regulations and replacement licences may not be issued on the same terms as the expired licence.

“Devising solutions to water scarcity during dry conditions and drought must be a key part of the abstraction reform process,” says Paul. “In particular we believe that if the government is serious in its commitment to equality amongst all users then it must abolish ‘section 57 restrictions’ [whereby the Environment Agency can restrict licensed abstraction if there’s a drought, with little warning, just at the time when crops need irrigation the most].”

 

Selling your excess water to suppliers

While the Water Act 2014 has little relevance for landowners and farmers licensed to abstract their own water, those who are business customers of mains water companies may prick up their ears. From 2017, businesses, charities and public sector customers will have the freedom to switch supplier, and this may prove an opportunity for some landowners in the years ahead.

Clause 12 of the Water Act 2014 will allow alternative suppliers, such as landowners with spare water, to input water into any part of the network in order to supply their own customers, other licensees or their own premises under a self-supply licence.

Peter says that while this new provision is to be welcomed, it is unlikely on its own to incentivise landowners to build reservoirs.

“Expecting someone to make a £1 million investment in the hope that they might find someone willing to buy that water is unrealistic. There are very clear barriers to reservoir construction, including finance and planning.”

There may be others though who benefit from the new provisions.

“Landowners who used to use water and have an existing reservoir may have an opportunity. For example, there are growers in Essex who moved away from potato production but still have reservoirs. Should trading be introduced, this would allow these landowners to put water into the river to be abstracted by water companies downstream,” says Peter, adding that this avenue might also see public sector bodies seeking out joint agreements on reservoirs with landowners.

 

Sustainable abstraction of water

Although abstraction reforms are on-going, the government is committed to tackling the issue of sustainable abstraction now. Water minister Dan Rogerson, introducing the reform consultation, said the current system did not “help abstractors to trade water effectively [nor] provide an incentive for abstractors to manage water efficiently.”

Concerns over unsustainable abstractions have prompted the Environment Agency to vary some licences already. Powers in the Water Act 2003, allow for certain licences to be changed without compensation payments to prevent serious damage to the environment.

Trevor Bishop, deputy director of water resources at the Environment Agency, says many rivers and groundwaters in England suffer because too much water is abstracted from them. However, he adds that the agency “recognises the importance of water security to the agricultural sector and will take this into account when deciding on the extent and time-scale for making changes to time limited licences.”

Richard Reynolds, senior agronomy adviser at Anglian Water, adds that the focus is also very much on water quality. “We’re working much more closely with landowners on the quality of water, whether it’s leaving their businesses, or being retained. It’s important they take a broader view of issues such as metaldehyde [a pesticide often found in water]; particularly if they’re looking to sell into the water supply.”

Felix Carter of Savills Agribusiness warns that landowners and producers must also be very clear about the cost and value of water and the margins of crops dependent upon it.

“For those such as large-scale vegetable growers, addedvalue crops may justify the investment in reservoirs for winter storage. Summer abstraction licences from rivers can be 10 times the cost of winter-stored water; in these situations, co-operation with a neighbouring landowner to build a reservoir can be a viable option.”

 

Sustainable Drainage Systems (SuDS)

The Water Act 2014 encourages the use of sustainable drainage systems. Developers and landowners need to work with the sewerage undertaker on any new drainage system, to make sure it is SuDS compliant.

“For landowners, SuDS offer an opportunity to work with developers to capture floodwater for agricultural use,” says Felix, who adds that they may also be of value for landowners looking to enhance environmental value by building SuDS that run off into a pond or wetland.

Read the full magazine online.

 

 
 

Key contacts

Peter Bennett

Peter Bennett

Director
Food & Farming

Savills Cambridge

+44 (0) 1223 347 221

+44 (0) 1223 347 221

 
 

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