Our role in PR09

The management of water in England and Wales changed in 1989 when the water industry was privatised. The creation of the water and sewerage companies and a new regulatory framework ushered in an era of unprecedented environmental improvements. Water companies are able to get on with their businesses, while the industry’s economic regulator, Ofwat, seeks value for consumers.

We work with Natural England and the Countryside Council for Wales to make sure that the environment is being protected and, where appropriate, improved.

Every five years Ofwat undertakes a price review of the amount of money that water companies can charge their customers for the supply of water and the treatment of sewage. It also determines how much companies can invest in improving their services and the environment – from ensuring there are adequate supplies of water to reducing the number of sewers that overflow into rivers.

We are currently in the middle of the 2009 price review which will set prices for the following five years.

The Environment Agency offers ministers advice on the environmental obligations, policies and priorities that impact on the water industry. For example, the European Urban Waste Water Treatment Directive has had a big impact on how sewage is now treated before it can be discharged into a river or bathing waters.

National Environment Programme - NEP

The Environment Agency produces the National Environment Programme (NEP) after consultation with the water industry, Natural England, Countryside Council for Wales and numerous other organisations. The NEP is a list of environmental improvement schemes that ensure that water companies meet European directives and national targets. The NEP forms part of the final Asset Management Plan (AMP) that determines the overall level of investment that water companies need to make over a five year period based on the new prices set by Ofwat.

We have a monitoring role in ensuring that the five year National Environment Programme is implemented by water companies. We report annually to Ofwat on the environmental performance of the water industry and Ofwat uses our assessments to decide if they should impose financial penalties on the companies.

Water companies have a duty to prepare Water Resource Management Plans that show how they are going to manage the supply and demand for water over a 25 year period. Water companies in England have published their draft plans covering the period 2010 to 2035. These have now undergone public consultation and we have produced our own representations. To find out more visit our water resource management plans page.