Fair, fast and feasible
Flood risk and drainage expert Richard Bettridge shares his thoughts on the new Ofwat rules.
From April 2018 a new set of rules, published by Ofwat, will apply when determining how to charge developers for providing new connection services for water mains and public sewers.
Water utility companies have historically complained about the difficulties of reconciling the costs of complying with their obligations in the planning process, with the revenue recoverable. Once consent is awarded, a raft of secondary legislation designed to service approved development starts to bite. Costs can only really be recovered through the regulatory process, which is strictly governed by infrastructure legislation, including the Water Act. There is very little opportunity for the water utility company to recover actual costs.
What we currently have in practice is a destructive combination. Water utility companies are unable to recover costs incurred in providing pre-planning advice, except with regard to chargeable data issues. Costs have to be recovered through rechargeable means like infrastructure costs for work required of the water utility company, including capacity checks, requisitions or S106 diversions or replacements.
If the water utility company can charge for advice, such as pre-planning, connection points, outfalls, and capacity, this may remove the logjam at the pre-planning stage. It could be a positive move provided that the charges are reasonable and reflect Ofwat’s principles.
These new guidelines may help developers to properly plan the infrastructure for their applications. They could also help to provide clarity and reduce the difficulties which are experienced post planning, as they shake up the common practice of plans being submitted with sketchy information. There is also the potential for the new rules to speed up the entire planning process if everyone buys in to the new approach. The slightly higher pre-planning charges could ultimately result in reducing post-planning readjustments and their associated costs.
I am a firm believer in fairness, and these new proposals appear to be a positive change to help address a prevalent problem.