Water – Brexit – An Irish Guide

Part 5: Water

Section 78: Water resources management plans, drought plans and joint proposals

Subsection (1) provides that the following subsections will amend Chapter 1 of Part 3 of the Water Industry Act 1991.
Subsection (2) makes a number of changes to section 37A of the Act. Subsection (2)(a) amends the heading of section 37A to remove the words “preparation and review”. The procedure for the preparation and review of water resources management plans will now be set out in regulations and directions made under new sections 39F and 39G of the Act. Subsection (2)(b) removes from primary legislation the reference to water undertakers taking account of water introduced into their area of appointment by water supply licensees. This requirement will instead be addressed in secondary legislation. Subsections (2)(c) to (f) make some amendments in light of the fact that the procedure for preparing and publishing water resources management plans will be set out in secondary legislation. Cross-references to section 37B are also removed, as this section will be replaced by the new powers to make secondary legislation as to procedure.
Subsection (3) omits section 37B of the Act, which contains the current requirements for the publication of a draft and final water resources management plan and the handling of consultation responses on the draft plan, and section 37C, which contains the current requirements for water supply licensees to provide information to water These provisions will be replaced by the provisions in regulations and directions made under new sections 39F and 39G.
Subsection (4) makes amendments to section 37D to remove references to section 37B and section 37C, since those sections have been omitted by subsection (3).
Subsection (5) makes amendments to section 39B, which relates to the procedure for preparing and revising drought plans, to change those provisions that rely on and refer to the water resources management plan provisions amended in the previous subsections.
Subsection (6) omits section 39C, which relates to information sharing in the context of drought plan preparation, since regulations made under new section 39F will provide for the process of information sharing in relation to drought plans.
Subsection (7) inserts new sections 39E, 39F, 39G and 39H into the Water Industry Act

New section 39E Joint proposals

Subsection (1) introduces a new power for the Secretary of State or Welsh Ministers to direct water undertakers to prepare and publish joint proposals.
Subsection (2) provides that a joint proposal is a proposal identifying measures that may be taken jointly by the undertakers for the purpose of improving the management and development of water resources. Such proposals are currently being developed on a voluntary basis by water undertakers working together in regional groups. Such directions can require those joint proposals to include measures to support the achievement of relevant environmental
Subsection (3) clarifies that a water undertaker must not prepare a joint proposal that includes measures that prevent water undertakers meeting their obligations under Part 3 of the Water Industry Act 1991. Part 3 includes, in particular, water undertakers’ water supply duties.
Subsection (4) provides that the Minister may specify the form that the joint proposals must take, any specified matter they must address, a particular area they should cover, any specific criteria they should address, and any planning assumptions they must be based upon. The directions are likely to require matters that change over time and location are addressed, for example, population, climate change or drought projections.
Subsection (5) provides that any directions must be set out in This is consistent with the approach to other powers in the Water Industry Act 1991 under which the relevant Minister may direct water undertakers as to certain matters.
Subsection (6) provides that each undertaker to whom a direction applies must comply with the
Subsection (7) provides that a direction under this subsection would be enforceable by the Minister under Section 18 of the Water Industry Act This is consistent with the current approach to water resources management plan and drought plan directions.
Subsection (8) provides that the power to make directions under new section 39E is conferred on the Secretary of State for water undertakers whose areas are wholly or mainly in England and Welsh Ministers in relation to water undertakers whose areas are wholly or mainly in
Subsection (9) provides that, where new section 39E refers to matters “specified”, this means specified in a direction under that section.

New section 39F Plans and joint proposals: regulations about procedure

Subsection (1) provides powers under which the Secretary of State or Welsh Ministers may make regulations setting the procedure for preparing and publishing joint proposals, water resources management plans and drought plans. It is likely that the regulations will largely cover similar requirements as the existing regulations for water resources planning (the Water Resources Management Plan Regulations 2007) and drought planning (the Drought Plan Regulations 2005). The existing regulations set out publication requirements and how responses to the consultations should be considered, as well as procedural requirements for inquires or hearings. It is also likely that the new regulations may also include provisions that permit the use of modern consultation platforms and improve the existing requirements for the sharing of information and the handling of confidential information.

Subsection (2) provides that the regulations may include requirements for the sharing of information, including requirements that water supply licensees must share with water undertakers such information as the water undertaker may reasonably request.
Subsection (3) provides that the regulations may include requirements on how water undertakers should consult with other bodies, who they should consult, the timing of any consultation and the publication of statements relating to any consultation.
Subsection (4) provides that the regulations may include the procedures for preparing and circulating drafts, including provision for the Minister to require changes to a draft plan or
Subsection (5) provides that the regulations may include requirements to ensure that people likely to be affected by the plan or proposal have a reasonable opportunity to make representations to the Minister.
Subsection (6) provides that the regulations may include requirements about how water undertakers should handle the responses they receive and that the Secretary of State or Welsh Ministers may cause a public local inquiry or other hearing to be held in connection with a water resources management plan or drought plan.
Subsection (7) provides that the regulations may include requirements about how water undertakers should handle commercially confidential information.
Subsection (8) provides that references to the Minister in that section, including the power to make regulations, is conferred on the Secretary of State for water undertakers whose areas are wholly or mainly in England and Welsh Ministers in relation to water undertakers whose areas are wholly or mainly in Wales.

New section 39G Regulations under section 39F: directions

Subsection (1) provides that regulations made under new section 39F may also confer on the Secretary of State or Welsh Ministers a power to make directions. This power is required because some administrative requirements – for example, around the timetables for preparation, revision and publication – are likely to change from planning round to planning round. The Secretary of State or Welsh Ministers may also need to be able to direct specific water undertakers on when and how water resources management plans, drought plans and joint proposals should be prepared and Under the existing legislation relating to water resources management plans and drought plans, the Secretary of State can give such directions to water undertakers and those directions are not subject to parliamentary procedure.
Subsection (2) provides that the directions must be set out in
Subsection (3) provides that a direction could apply generally to all water undertakers or to one or more undertakers.
Subsection (4) provides that each water undertaker must comply with a
Subsection (5) provides that the directions would be enforceable by the Secretary of State or Welsh Ministers under the section 18 of the Water Industry Act 1991.
Subsection (6) provides that “Minister” has the same meaning as in new section 39F, with the effect that the power to make directions under new section 39G is conferred on the Secretary of State for water undertakers whose areas are wholly or mainly in England, and Welsh Ministers in relation to water undertakers whose areas are wholly or mainly in Wales.

New section 39H Regulations under section 39F: supplementary

Subsection (1) provides that regulations under new section 39F are to be made by statutory
Subsection (2) provides that regulations are subject to the negative resolution procedure subject to annulment by either House of Parliament, in relation to regulations made by the Secretary of State, or Senedd Cymru, in the case of regulations made by the Welsh Ministers.
Subsections (3) and (4) provide that, where regulations are made by both the Secretary of State and Welsh Ministers and either legislature votes to annul those regulations, the regulations will have no further effect.
Subsection (5) provides that section 213(2) to (2B) of the Water Industry Act 1991 applies to regulations made by Welsh Ministers under new section 39F as they would apply the Secretary of State under new section 39F. This means that regulations made by Welsh Ministers may, for example, include provision for the determination of questions of fact and law which may arise in giving effect to the regulations or provision as to awarding costs or expenses of proceedings in any determination, among other things.

Section 79: Drainage and sewerage management plans

Section 79 inserts five new sections into the Water Industry Act

New section 94A Drainage and sewerage management plans: preparation and review

New section 94A introduces a new duty on sewerage undertakers in England and Wales regarding drainage and sewerage management plans.
Subsection (1) sets out the requirement for each sewerage undertaker to prepare, publish and maintain a plan.
Subsection (2) defines the plan with reference to Part 4 of the Water Industry Act This Part includes section 94 of the Water Industry Act 1991, which is the duty on the sewerage undertakers to provide, maintain and extend a system of public sewers to ensure that their area of operation is and continues to be “effectually drained”. The production of the plan will demonstrate how a sewerage company will meet its duties under Part 4 of the Water Industry Act 1991 including section 94.
Subsection (3) sets out the specific matters the plan must address, namely an assessment of the sewerage undertaker’s drainage and sewerage system capacity, current and future demand, and resilience. The sewerage undertaker is required to set out in the plan what it intends to do to maintain an effective system of sewerage and drainage, and when those actions are likely to be Any relevant risks to the environment and mitigation measures should be recorded in the plan. Relevant environmental risks will include storm overflows and their impact on water quality. Should other factors become relevant, the Minister (defined in subsection (10) as the Secretary of State or Welsh Ministers) may make directions specifying additional matters that must be addressed by the plan.
Subsection (4) points to section 94C, which makes provision for the preparation and publication of a plan.
Subsection (5) sets out that the sewerage undertaker must review its plan on an annual basis and share the conclusions of that review with the Minister.
Subsection (6) specifies the circumstances in which a sewerage undertaker must produce a revised plan. This must occur within 5 years of publication of the last plan, or earlier if an annual review indicated a material change of circumstances or if the Minister gives directions that a revised plan is needed.
Subsection (7) sets out that the Minister can give directions to sewerage companies regarding the form of, or the time period covered by, the The intention is that the planning period is long-term, in the region of around 25 years.
Subsection (8) refers to enforcement powers at section 18 of the Water Industry Act
Subsection (9) defines “drainage system” and “sewerage system” as used in the preceding subsections. Section 114A of the Water Industry Act 1991 defines a “drainage system” as a structure designed to receive rainwater and other surface water, other than a natural watercourse. Section 17BA of the Water Industry Act 1991 defines the “sewerage system” of a sewerage undertaker as the system comprising (a) the system of public sewers, the facilities for emptying public sewers and the sewage disposal works and other facilities for dealing effectually with the contents of public sewers that the undertaker is required to provide by section 94 of the Water Industry Act 1991, and (b) the lateral drains that the undertaker is required to maintain by section 94 of the Water Industry Act 1991. A sewerage system is defined in the Water Industry Act 1991 in a way that covers all relevant aspects of wastewater, including facilities to empty public sewers, wastewater treatment works and pumping Therefore, a Drainage and Sewerage Management Plan must cover all relevant aspects of wastewater, including public sewers and wastewater treatment works.
Subsection (10) defines “Minister”, as used in the preceding subsections, as meaning the Secretary of State or Welsh Ministers in relation to English and Welsh sewerage undertakers

New section 94B Drainage and sewerage management plans: power to amend period

New section 94B sets out the powers available to the Minister to amend the five-year time period specified at new section 94A(6)(c).
Subsection (1) sets out that the time period must be amended by statutory
Subsection (2) defines “Minister” as used in this section with the same meaning as new section 94A(10).
Subsection (3) sets out that statutory instruments made under this section are subject to negative resolution procedure.
Subsection (4) sets out that subsection (5) applies to orders made by both the Secretary of State and Welsh Ministers.
Subsection (5) describes how the negative resolution procedure can lead to revocation of the statutory instrument.

New section 94C Drainage and sewerage management plans: regulations about procedure

Subsection (1) allows the Minister to make regulations that set out how a plan should be prepared and published.
Subsection (2) sets out that the regulations made under this section can describe how information should be shared in the development of a plan, including requiring sewerage licensees to provide information to sewerage undertakers.
Subsection (3) sets out that the regulations made under this section can set out how a sewerage undertaker should consult on their plans, including who should be consulted, the frequency and timing of consultation and the publication of consultation results.
Subsection (4) sets out that the regulations made under this section can make provision for how plans are prepared and circulated.
Subsection (5) sets out that the regulation made under this section can be used to make sure that appropriate representations are made in the preparation of the plan.
Subsection (6) sets out how representations made under subsection (5) are dealt
Subsection (7) sets out that the regulation made under this section can provide details on handling of commercially confidential information.
Subsection (8) sets out that the regulation made under this section can be used to give the Secretary of State/Welsh Ministers direction making powers.
Subsection (9) defines “Minister” as used in this section with the same meaning as new section 94A(10).

New section 94D Regulations under section 94C: supplementary

Subsection (1) sets out that regulations made under new section 94C are made by statutory
Subsection (2) sets out that regulations made under new section 94C are subject to negative resolution procedure.
Subsection (3) sets out that subsection (4) applies to regulations made under new section 94C by both the Secretary of State and Welsh Ministers.
Subsection (4) describes how the negative resolution procedure can lead to revocation of regulations made under new section 94C.
Subsection (5) defines how other sections apply to regulations made under new section 94C by the Secretary of State and Welsh Ministers.

New section 94E Drainage and sewerage management plans: direction

New section 94E defines directions with reference to preceding
Subsection (1) defines directions as those given in new section 94A or regulations under new section 94C.
Subsection (2) specifies that directions must be given in
Subsection (3) specifies that directions may be given to all sewerage undertakers or can be specific to one or more sewerage undertaker.
Subsection (4) confirms that sewerage undertakers have a duty to comply with
Subsection (5) sets out that the duties under this section are enforceable under section 18 of the Water Industry Act 1991.
This section forms part of the law of England and Wales and applies to England and

Section 80: Storm overflows

Section 80 inserts a new chapter 4 into Part 4 of the Water Industry Act 1991 (sewerage services).

New Chapter 4: Storm overflows

New chapter 4 puts new duties on the Secretary of State, the Environment Agency, and sewerage undertakers to reduce storm overflows and the harm they can

New section 141A Storm overflow discharge reduction plan

New section 141A establishes the legal requirement for a storm overflow discharge reduction plan for sewerage undertakers wholly or mainly in England.
Subsection (1) requires the Secretary of State to prepare a plan for the purposes

of reducing discharges from storm overflows and reducing their adverse impact for sewerage undertakers wholly or mainly in England.

Subsection (2) explains that for the purposes of the plan, reducing discharges includes reducing the frequency, duration and volume of discharges.
Subsection (3) explains that for the purpose of the plan reducing their adverse impact refers to their adverse impact on the environment and on public health.
Subsection (4) sets out some specific matters on which the plan must put forward proposals such as how to reduce the need for discharges and how to improve sewage treatment.
Subsection (5) sets out that when preparing the plan, the Secretary of State must consult specified statutory consultees, and any other persons that the Secretary of State considers
Subsection (6) sets out the timetable to which the Secretary of State must publish the plan, namely before 1 September 2022.
Subsection (7) enables the Secretary of State to amend the plan and that in doing so they must consult the statutory consultees in subsection 5 on the amended plan.
Subsection (8) requires the plan to be laid in Parliament once

New section 141B Progress reports on storm overflow discharge reduction plan

New section 141B sets out a legal requirement for progress reports on the storm overflow discharge reduction plan.
Subsection (1) places a requirement on the Secretary of State to publish progress
Subsection (2) requires that each progress report sets out the progress made with the plan during the period of the progress report, and the progress made in achieving the aims of the purpose of the plan as set out in new section 141B, namely to reduce discharges from storm overflows and to reduce their harm.
Subsection (3) requires that the first report be made three years after the publication of the storm overflow reduction plan. The first report will be due in 2025.
Subsection (4) requires that subsequent reports deal with the five-year periods from the date of the first report in subsection (3).
Subsection (5) requires the report to be published within 12 weeks of the end of the period to which the report relates. Subsection (6) requires the report to be laid before Parliament once

New section 141C Annual reports from discharges of storm overflows

New section 141C sets out the legal requirement for annual reports by sewerage undertakers wholly or mainly in England on storm overflow activity.
Subsection (1) requires sewerage undertakers wholly or mainly in England to publish a report on their storm overflows.
Subsection (2) sets out the information that sewerage undertakers must provide in the report for each of their storm overflows, such as the location of the overflow.
Subsection (3) requires reports to be for successive calendar years starting with Subsection

(4) requires it published before 1 April in the year after the calendar year to which it relates. The first report will be published in 2022.

Subsection (5) explains that the plan must be published in an accessible
Subsection (6) refers to enforcement powers at section 18 of the Water Industry Act

New section 141D Environment Agency reports

New section 141D sets out the legal requirements for Environment Agency to report annually on storm overflow activity.
Subsection (1) requires the Environment Agency to report annually on the storm overflow activity of sewerage undertakers wholly or mainly in England.
Subsection (2) sets out the information which the Environment Agency must include in the report, including the frequency and duration of discharges from the storm overflows, and, where the information is available, the volume of each discharge.
Subsection (3) requires reports to be for successive calendar years starting with
Subsection (4) requires the Environment Agency to publish the report before 1 April in the year after the calendar year to which it relates, and for it to be published in such a way as which the Environment Agency thinks appropriate.

New section 141E Interpretation of Chapter 4

New section 141E sets out the definition of a storm overflow and discharges from storm
Subsection (1) defines a storm overflow in relation to structures and the apparatus of a sewerage undertaker’s sewerage system.
Subsection (2) defines sewerage discharges which are not defined as storm overflows and are therefore exempt from the requirements of new chapter 4 (storm overflows) of Part 4 of the Water Industry Act 1991. These include discharges which occur because of an asset failure.
Subsection (3) explains that a ‘sewerage system’ as specific in subsection (1) is defined by way of section 17BA(7) of the Water Industry Act 1991 which states the following: “References in this Chapter to the sewerage system of a sewerage undertaker are references to the system comprising (a) the system of public sewers, the facilities for emptying public sewers and the sewage disposal works and other facilities for dealing effectually with the contents of public sewers that the undertaker is required to provide by section 94, and (b) the lateral drains that the undertaker is required to maintain by section 94.”.

Section 81: Reporting on discharges from storm overflows

Section 81 inserts new section 141DA into Chapter 4 of Part 4 of the Water Industry Act 1991 after new section 141D.

New section 141DA Reporting on discharges from storm overflows

New section 141DA establishes the legal requirement for sewerage undertakers wholly or mainly in England to report in near real time on when a discharge starts and stops.
Subsection (1) sets out the specific information a sewerage undertake wholly or mainly in England must publish when a discharge from a storm overflow occurs. This includes its location and when it began.
Subsection (2) requires that the information must be reported within one hour of the discharge starting, and within one hour of it finishing.
Subsection (3) requires the information to be published in a format which must be both easily understandable and easily accessible by the public.
Subsection (4) refers to enforcement powers at section 18 of the Water Industry Act
Subsection (5) allows the Minister to make regulations that set out exemptions to the publication of information (under subsection (1)) and the time limit for doing so (under subsection (2)).
Subsection (6) requires the Minister to consult on the draft regulations with such persons as the Minister considers appropriate.
Subsection (7) sets out that regulations made under new section 141DA are made by statutory instrument under the draft affirmative resolution procedure.

Section 82: Monitoring quality of water potentially affected by discharges

New Section 141DB Monitoring quality of water potentially affected by discharges from storm overflows and sewage disposal works

Section 82 inserts new section 141DB into Chapter 4 of Part 4 of the Water Industry Act 1991 after new section 141DA.
New section 141DB establishes the legal requirement for sewerage undertakers wholly or mainly in England to monitor the quality of water affected by storm overflows and sewage treatment works.
Subsection (1) requires and sewerage undertaker to continuously monitor the quality of water upstream and downstream of discharges from storm overflows and sewage disposal works.
Subsection (2) defines the assets for which monitoring is required and that the monitoring is required where the discharge is into a water course.
Subsection (3) sets out the information which the monitoring exercise must collect, including for example levels of dissolved oxygen.
Subsection (4) refers to enforcement powers at section 18 of the Water Industry Act
Subsection (5) allows the Minister to make regulations that set out (a) requirements for the monitoring such as the type of monitor to be used; (b) exemptions to the assets to be monitored; (c) how sewerage undertakers should publish the monitoring information collected.

Subsection (6) requires the Minister to consult on the draft regulations with such persons as the Minister considers appropriate.
Subsection (7) sets out that regulations made under new section 141DB are made by statutory instrument under the draft affirmative resolution procedure.
Section 82 subsection (2) makes consequential amendments to section 213 of the Water Industry Act 1991 to include the new regulation making powers of new sections 141DA and 141DB.

Section 83: Reduction of adverse impacts of storm overflows

Section 83 inserts new section 141DC into Chapter 4 of Part 4 of the Water Industry Act 1991, after section 141DB.
Subsection (1) places a new legal duty on sewerage undertakers wholly or mainly in England to secure progressive reductions in the adverse impacts of discharges from their storm overflows.
Subsection (2) explains that this includes reducing the adverse impacts of storm overflows on the environment and public health. The water quality monitoring required through section 141DB will provide the evidence to illustrate the progressive reduction being achieved for environmental and public health purposes, such as to enable additional inland bathing sites to be established.
Subsection (3) provides for enforcement action through the Water Industry Act 1991 by the Secretary of State or Ofwat, under general authorisation from the Secretary of State.

Section 84: Report on elimination of discharges from storm overflows

Section 84 requires the publication of a report on the elimination of storm overflows of sewerage undertakers wholly or mainly in England.
Subsection (1) requires the Secretary of State to produce a report on the actions which would be needed to eliminate discharges from storm overflows of sewerage undertakers wholly or mainly in England and the cost and benefits of doing so.
Subsection (2) requires the Secretary of State to publish the report before 1 September
Subsection (3) requires that the report be laid before Parliament once

Section 85: Authority’s power to require information

Section 85 inserts new section 27ZA into the Water Industry Act

New Section 27ZA: Power to require information for purpose of monitoring

This new section provides the Water Services Regulation Authority (“Ofwat”) with a strengthened information gathering power when performing its duties under section 27(1) (reviewing water and sewerage company and water supply and sewerage licensees performance of duties) and section 27(2) (collecting information on company and licensees activities under their licences to operate) of that Act.
Subsection (1) enables Ofwat to issue a notice to a water or sewerage undertaker or licensee requesting information in relation to its functions under section 27(1) and section 27(2). Ofwat has duties under the Water Industry Act 1991 to (a) keep under review the manner in which water and sewerage undertakers and licensees carry out their functions and activities (under section 27(1)); and (b) collect information with respect to the manner in which water and sewerage undertakers and licensees carry out their functions and activities, so as to enable Ofwat to become aware of matters relating to its statutory powers or duties (under section 27(2)).
Subsection (2) defines the notice as a notice which requires a person to produce specified documents by a particular time, to a particular location, or to provide specified information in a specific manner and form at a particular time and place.
Subsection (3) provides that the duties in this section are enforceable by Ofwat using the procedure set out under section 18 of the Water Industry Act 1991.
Subsection (4) provides clarification that nothing in this section requires a contravention of the data protection legislation.
Subsection (5) imports the “data protection legislation” definition in section 3(9) of the Data Protection Act 2018. That section currently defines the “data protection legislation” as the UK General Data Protection Regulation (UK GDPR); the Data Protection Act 2018 and regulations made under it, and other key legislation.
This section forms part of the law of England and Wales and applies to England and

Section 86: Water and sewerage undertakers in England: modifying appointments

Subsection (1) amends Part 2 (appointment and regulation of undertakers) of the Water Industry Act 1991, where the current provision for modification of appointment conditions of water and sewerage undertakers by agreement (section 13) is located.
Subsection (2) inserts nine new sections into the Water Industry Act 1991, setting out the new process for modification of appointment conditions.

New section 12A Modification by the Authority

Subsection (1) explains that new sections 12B to 12I apply to water and sewerage undertakers whose areas are wholly or mainly in England. The process for the modification of licence conditions of undertakers whose areas are wholly or mainly in Wales will remain unchanged by this Act.
Subsection (2) of new section 12A contains a power for the Water Services Regulation Authority (“Ofwat”) to make modifications to appointment conditions.
Subsection (3) requires Ofwat to consult on any proposed modifications to appointment conditions. The consultation should set out that Ofwat proposes to make changes to a licence, set out the proposed changes, the effect of the changes, why the changes are being proposed, and when the consultation will close.
Subsection (4) requires that the consultation period under subsection (3) must be at least 42 days in length, starting from the date the notice is published.
Subsection (5) sets out who must be given notice of the consultation. Paragraph (a) requires Ofwat to publish notice in a way that ensures those affected by the modifications will be able to see it; paragraph (b) requires Ofwat to send a copy of the notice to each water or sewerage undertaker whose conditions Ofwat proposes to change, any undertaker or will be affected by the modifications, to the Secretary of State, and to the Consumer Council for Water.
Subsection (6) requires Ofwat to consider any responses received to the consultation within the time limit.
Subsection (7) enables the Secretary of State to direct Ofwat not to make a change or changes, during the period of the consultation.
Subsection (8) explains that subsections (9) to (11) will apply where Ofwat has undertaken the process under subsections (3) to (6) and decides to proceed with the change to the licence following consultation.
Subsection (9) requires Ofwat to publish its decision and proposed changes following consultation, including explaining the effect of the changes, how it considered consultation responses, and how the final decision differs (if at all) from the original proposal.
Subsections (10) and (11) require Ofwat to state the date on which each change will take effect, which must be at least 56 days after publication of the decision to make the change in

New section 12B Modification of conditions of appointment: early effective date

This new section allows for proposed modifications to licence conditions to be made sooner than 56 days if Ofwat considers an earlier date is necessary and has undertaken a consultation explaining its intention to do this. Ofwat’s consultation must have explained the proposed earlier effective date, the reasons for the earlier date, and why an earlier date would not have a material negative impact on undertakers.

New section 12C Modification of conditions under section 12A: supplementary

This new section enables Ofwat to make consequential amendments to other conditions where it is necessary or expedient as a consequence of the original modification. Paragraph 2 of new Schedule 2ZA allows the CMA to direct that, where the modification is appealed, the modification can be suspended from coming into effect, in full or in part, pending the outcome of the appeal, and will not come into effect until the appeal has been determined.

New section 12D Appeal to the CMA

Subsection (1) allows an appeal to be made to the CMA against a decision to modify a condition of an appointment.
Subsection (2) sets out the bodies that can bring an appeal: the affected undertaker; any other undertaker or licensee also affected by the change; the representative body of undertakers and licensees (currently a position held by Water UK); or the Consumer Council for Water.
Subsection (3) provides that the CMA must agree to an appeal being
Subsection (4) enables the CMA to refuse permission to appeal on three specific grounds: where the appeal is brought by an undertaker or licensee whose interests are not materially affected by the decision being appealed; where the interests of undertakers or licensees that are represented (by the industry or consumer body) are not materially affected; or where the appeal is vexatious, is trivial or does not have a reasonable prospect of success.

New section 12E Procedure on appeal to CMA

This new section provides for the legal effect of new Schedule That Schedule sets out the process for appeals to CMA.

New section 12F Determination by CMA of appeal

Subsection (1) sets out that the process in this section applies to all appeals brought under new section 12D.
Subsection (2) requires CMA to have regard to Ofwat’s duties as set out in section 2 of the Water Industry Act 1991 and the strategic priorities set out in any Strategic Policy Statement issued to Ofwat by Defra Secretary of State under section 2A of that Ofwat’s duties undersection 2 include duties to further the consumer objective; secure that the functions of water and sewerage undertakers are properly carried out across Wales and England; secure that undertakers are able to finance the proper carrying out of their functions; secure that the activities authorised by the licence of a licensed water supplier and any statutory functions imposed on it in consequence of the licence are properly carried out; and to further the resilience objective.

Subsection (3) allows the CMA to consider any matter that Ofwat did not consider, provided Ofwat would have been entitled to do so, such as more recent company The CMA must not consider any matter Ofwat would not have been entitled to consider.
Subsection (4) sets out the grounds on which the CMA can allow an appeal: that Ofwat did not take proper account of its duties under the Water Industry Act 1991 or its strategic priorities; that Ofwat’s decision was based on a factual error; that the modifications do not achieve what Ofwat contended they achieve; that Ofwat did not follow the statutory procedure for making modifications; or that the decision was legally wrong.
Subsection (5) sets out that, where the appeal is not allowed, the CMA must confirm Ofwat’soriginal decision.

New section 12G CMA’s powers on allowing an appeal

Subsection (1) allows for the CMA, where it allows an appeal (in full or in part), to quash Ofwat’s licence modification decision and/or send the proposed modification back to Ofwat to reconsider and make a new decision based on any CMA direction.
Subsection (2) allows CMA only to direct Ofwat to do something that it has the power to
Subsection (3) requires Ofwat to comply with a

New section 12H Time limits for CMA to determine an appeal

This new section sets the time limits for the CMA to determine
Subsection (1) sets out that there will be a four-month time limit for the CMA to determine an appeal, running from the date on which it gave permission for the appeal to proceed, unless certain conditions apply.
Subsections (2), (3) and (4) allow the CMA to extend the time limit to five months, if a party to an appeal asks them to and the CMA is satisfied that there are good reasons why the appeal cannot be determined within four If the CMA extends time, it must inform the parties to the appeal, and publish the revised time limit so that it is brought to the attention of any persons that it considers will be affected by the determination.
Subsection (5) provides that the permission date is the date the CMA gave permission to bring the appeal under new section 12D(3).
Subsection (6) explains that the definition for “a party” to an appeal in new sections 12H and 12I is that set out in new Schedule 2ZA: that is, “a party” to an appeal means either the appellant or Ofwat.

New section 12I Determination of appeal by CMA: supplementary

Subsection (1) sets out how the CMA must set out the determination of an appeal (in an order), what should be included in it, when and how it should be published, and whom the CMA must

Subsection (2) allows the CMA not to publish any commercial information that could harm the business interests of an undertaking to which the determination relates, or any information that relates to an individual and could harm their interests.
Subsection (3) requires Ofwat to take any steps needed to comply with an order issued by the
Subsection (4) provides that Ofwat must comply with any order issued by the CMA by the time specified in the order or, if no time is specified, within a reasonable time.
Subsection (5) provides that new section 12C, under which a consequential change to other conditions linked with the original change could be made, applies as it applies where a condition of a licence is modified under new section Under new section 12G, Ofwat may be required to reconsider and redetermine a licence modification decision if an appeal is allowed by the CMA.
Subsection (3) of section 86 inserts a new heading before section 13 of the Water Industry Act 1991 to read “Modification of appointment conditions: Wales”. This clarifies that, following the amendments made by this Act, sections 13 to 16B of the Water Industry Act 1991 will apply solely to undertakers whose appointments areas are wholly or mainly in Wales. The current process for modification of licence conditions by agreement will effectively continue for Wales
Subsection (4) of section 86 inserts a new subsection (A1) into section 13 of the Water Industry Act 1991, clarifying that that sections 13 to 16B apply only to undertakers whose areas of appointment are wholly or mainly in Wales.
Subsection (5) of section 86 inserts a new heading before section 17 of the Water Industry Act 1991 to clarify that section 17 applies to the modification of conditions in both England and
Subsection (6) of section 86 inserts a new Schedule 2ZA into the Water Industry Act 1991, which details the procedure for appeals made under section 12D of the Water Industry Act 1991.
Members of the CMA Panel will consider appeals made to the CMA in respect of water and sewerage undertaker licence modification decisions. Subsection (7) makes a consequential amendment to the CMA Panels provision in Schedule 4 to the Enterprise and Regulatory Reform Act 2013 (paragraph 35(3)), to ensure that appeals to the CMA under new section 12D of the Water Industry Act 1991 will meet the definition of a “specialist utility function” in the Enterprise and Regulatory Reform Act This will ensure that CMA panel experts are able to carry out new section 12D functions.

Section 87: Electronic service of documents

Section 87 inserts new subsections into section 216 (service of documents) of the Water Industry Act 1991, enabling the electronic service of documents served under that Act.
Subsection (4A) allows any document required or permitted to be served under the Water Industry Act 1991 to be served by electronic means.
Subsection (4B) provides that where the document is to be served on a consumer, it can only be served electronically where (a) a person has consented in writing to receiving documents electronically and has not withdrawn that consent, and (b) the document is sent electronically to the electronic address that the consumer has most recently provided to the sender.
Subsection (4C) defines the meaning of “consumer”, as a person liable to pay charges in respect of (a) the supply of water any premises, or (b) the provision of sewerage services in respect of any premises, excluding any water or sewerage undertaker, water supply or sewerage licensee, or Ofwat (the Authority).
This section forms part of the law of England and Wales and applies to England and

Section 88: Water abstraction: no compensation for certain licence modifications

Section 88 inserts new sections 61ZA and 61ZB into the Water Resources Act 1991, and makes consequential modifications to section 27 of the Water Act 2003 and Schedule 8 to the Water Act 2014. The purpose of the two new sections is to allow permanent licences in England to be varied or revoked without the payment of compensation on or after 1 January 2028 where the change is necessary to protect the environment or to remove excess headroom.
Subsection (1) inserts two new sections 61ZA and 61ZB after section 61 of the Water Resources Act 1991.

New section 61ZA No compensation where modification to protect environment: England

New section 61ZA provides that permanent abstraction licences in England only can be varied or revoked on or after 1 January 2028 without the payment of compensation if the Secretary of State is satisfied that the revocation or variation is necessary having regard to a relevant environmental objective; or to otherwise protect the water environment from damage. This section extends the circumstances in which a permanent abstraction licence can be varied or revoked without the payment of compensation to protect the environment. Section 27 of the Water Act 2003 permits the revocation or variation of a licence without the payment of compensation in order to protect from “serious damage” to the water environment.
Subsection (1) sets out the circumstances where the section applies. Paragraph (a) sets out that the section applies to licences that are revoked or varied on or after 1 January 2028 pursuant to a direction made by the Secretary of State following a licence change proposal by the Environment Agency (section 54) or the owner of a fishing right affected by the licence (section 56). This date will allow time for the catchment-based approach to water resources to embed and produce solutions. (Defra proposed a stronger catchment focus following the catchment based approach in its Water Abstraction Plan, which involves working with abstractors and other local stakeholders to develop solutions to abstraction issues at a catchment level.) Paragraph (b) sets out the environmental reasons why a licence may be varied or revoked without paying compensation. These are that the Secretary of State is satisfied the change is needed in relation to “a relevant environmental objective” or “to otherwise protect the water environment from damage”. The reference to ‘damage’ includes damage caused by low flow levels in a river due to unsustainable abstraction. Low flow levels could be a factor taken into account in a decision to revoke or vary an abstraction (Subsections (2), (4) and (5) define the terms “relevant licence”, “water environment” and “relevant environmental objective” respectively.)
Subsection (2) defines the term “relevant licence” used in subsection (1)(a). A relevant licence is a licence (a) that allows abstraction in England only, and (b) that does not have a time-limit – that is, one that would remain in force indefinitely unless revoked, commonly known as a permanent As a result, licences that allow abstraction in Wales and licences with a time- limit are not affected by the provisions.
Subsection (3) provides that, where a licence is changed under this section, no compensation is payable under section 61 to the licence holder.
Subsection (4) defines the term “water environment” used in subsection (1)(b)(ii). The water environment is any inland waters (including lakes, ponds, rivers or other watercourses with dry bottoms, channels or beds); any water contained in rocks underground (commonly known as groundwater); and the underground rocks themselves (commonly known as aquifers). It includes both natural and man-made features. It also refers to the plants and animals that are dependent on any of this water or these physical features.
Subsection (5) defines the term “relevant environmental objective” used in subsection (1)(b)(i). A relevant environmental objective is an environmental objective as defined in the regulations that implemented the Water Framework Directive in England. In England, environmental objectives are set in relation to each water body in a river basin district by the Environment Agency, after public consultation, and approved by the Secretary of State. Environmental objectives include achieving compliance with protected area objectives, preventing any deterioration in the status of water bodies; and protecting, enhancing or restoring water bodies with the aim of achieving “good status”. There are three pieces of secondary legislation that implemented the Water Framework Directive in There are separate regulations for the Solway Tweed River Basin District and the Northumbria River Basin District, which both span England and Scotland, and a further statutory instrument for all other River Basin Districts in England and Wales.

New section 61ZB No compensation where variation to remove excess headroom: England

New section 61ZB provides that permanent abstraction licences in England can be varied on or after 1 January 2028 without the payment of compensation where at least 25% of the licence volume remains unused for at least 12 years before the date the Environment Agency makes a proposal to vary the licence, as long as the Secretary of State is satisfied that the variation does not reduce the quantity of water the licence holder is authorised to abstract to a level below that which the holder reasonably requires.
Subsection (1) sets out that the section only applies to relevant licences that are varied on or after 1 January 2028 pursuant to a direction made by the Secretary of State under section 54, following a licence change proposal by the Environment Agency.
Subsection (2) defines the term “relevant licence” used in subsection (1). A relevant licence is a licence (a) that allows abstraction in England only, and (b) that does not have a time-limit – that is, one that would remain in force indefinitely unless revoked, commonly known as a permanent As a result, licences that allow abstraction in Wales and licences with a time- limit are not affected by the provisions.
Subsection (3) provides that no compensation is payable under section 61 to the licence holder, if (a) the licence holder has abstracted 75% or less of the annual licensed volume in each of the 12 years preceding the relevant date, and (b) the Secretary of State is satisfied that the variation would not reduce the quantity of water the licence holder is authorised to abstract to a level below that which the holder reasonably requires.
Subsection (4) defines the term “relevant date” used in subsection (3). The relevant date is the date when the Environment Agency serves notice on the licence holder that it proposes to change the licence. It is the end of the 12-year period used to calculate under-use.
Subsection (2) of section 88 amends section 27 of the Water Act 2003 so that on or after 1 January 2028 it will only apply to licences that fall within the definition of a relevant licence as defined in new section 61ZA(2) of the Water Resources Act 1991 – that is, permanent licences that authorise abstraction in England. Section 27 will not apply to relevant licences on or after 1 January 2028, but will continue to apply to relevant licences up to and including 31 December 2027.

Subsection (3) of section 88 omits paragraph 30(4) of Schedule 8 to the Water Act 2014, so that the legislative changes introduced in this Act can be incorporated into the new Environmental Permitting Regulations regime. In future, it is intended that the water abstraction licensing regime will be moved into the Environmental Permitting Regulations regime under the Environmental Permitting (England and Wales) Regulations Making this change should ensure that the abstraction licensing regime is consistent with the regulation of other activities affecting the environment. The powers under which the regulations will be made include Schedule 8 to the Water Act 2014.

Section 89: Water quality: powers of Secretary of State

Subsection (1) provides a regulation–making power for the Secretary of State to make provision about the substances to be taken into account in assessing the chemical status of surface water or groundwater, and to specify standards for those substances, or in relation to the chemical status of water bodies. This will enable updates to the substances and standards currently used in that process, for example those set out in the list of priority substances and priority hazardous substances for surface waters in water quality legislation. The power can only be used to amend or modify the existing water quality legislation relevant to chemical status, listed in subsection (2).
Subsection (1)(a) would allow an entirely new substance to be included in the legislation, or the removal of an existing substance. Subsection (1)(b) allows the environmental quality standard (EQS) to be set for a substance, or for an existing EQS to be modified.
Subsection (3) enables additional provision that may need to be introduced as a result of exercising the powers under subsection (1). This may include, for example, specifying a date by which a standard for a specific substance must be achieved, changes to monitoring regimes to cover newly specified substances, or new measures to be introduced into river basin management plans in respect of such substances.
Subsection (4) establishes that the Secretary of State can only exercise the powers in this section to make provision that could be made by the Welsh Ministers or Northern Ireland Department of Agriculture, Environment and Rural Affairs under their own powers in sections 90 and 91 respectively with their consent.
Subsection (5) establishes that the Secretary of State cannot exercise the powers in this section to make provisions which would fall within the Scottish Parliament’s devolved competency, given effect by powers under an Act of that Parliament, with the exception of parts of the cross border river basin districts lying in Scotland, where the Secretary of State could exercise the powers to make provisions but only with Scottish Ministers’ consent.
Subsection (6) establishes the consultation requirements attached to the exercise of the Paragraph (a) requires the Secretary of State, regarding regulations applying to England, to consult with the Environment Agency, which provides expert scientific opinion. Paragraph (b) requires the Secretary of State to consult with Welsh Ministers when making regulations applying to an England and Wales cross-border River Basin District (RBD) that lies in England, and when the Welsh Ministers’ consent is not required under subsection (4). This would mean consultation is only required if the provision being made is only for the English part and does not apply to the part in Wales. Paragraph (c) places the same consultation requirements on the Secretary of State in relation to the cross-border RBDs shared with Scotland.

Section 90: Water quality: powers of Welsh Ministers

Section 90 confers a regulation, broadly comparable to that in section 89, on the Welsh Ministers in relation to Wales. Subsection (4) requires consultation with the Natural Resources Body for Wales, other interested persons or bodies, and with the Secretary of State when exercising the power in relation to the Welsh part of a cross-border RBD.

Section 91: Water quality: powers of Northern Ireland department

Section 91 confers the same power on the Department of Agriculture, Environment and Rural Affairs in relation to Northern Ireland.

Section 92: Solway Tweed river basin district: power to transfer functions

Section 92 confers a power to be exercised by the Secretary of State to amend the Water Environment (Water Framework Directive) (Solway Tweed River Basin District) Regulations 2004 (“the Solway Tweed Regulations”) to allow future changes to the exercise of functions in the Solway Tweed River Basin District.
Subsection (3) enables regulations to be made that provide for functions under the Solway Tweed Regulations to be exercised in a different For example, it would enable changes to functions that are currently joint between the Secretary of State and Scottish Ministers for the whole of the river basin district.
Subsection (4) would allow amendments to the functions of the Environment Agency and Scottish Environment Protection Agency. These could be split to enable, for example, monitoring of English water bodies by the Environment Agency alone.
Subsection (5) allows for changes to the geographical area in which the functions can be exercised. For example, the functions could be amended so that in future they are exercised by the Secretary of State alone in relation to the English part, and the Scottish Ministers alone in the Scottish part.
Subsection (6) would enable requirements to be imposed on such functions so that they are exercisable with the consent of the Secretary of State or the Scottish Ministers, or after
Subsection (7) requires the consent of the Scottish Ministers for any regulations under this
Subsection (8) states that regulations made under this section are subject to the negative
Subsection (9) provides a
This section forms part of the law of England and Wales and Scotland, and applies to the area of the Solway Tweed river basin district which is partly in England and partly in Scotland.

Section 93: Water quality: interpretation

This section contains definitions used in the sections on water

Section 94: Valuation of other land in drainage district: England

Section 94 amends section 37 of the Land Drainage Act 1991 (“the LDA”), enabling the Secretary of State to make regulations, by the affirmative procedure, that establish the valuation calculation for the value of other land in an internal drainage district in England. Subsection (3) makes the main changes by inserting new subsections (5ZA) to (5ZH) into the LDA.
Setting out the valuation calculation in regulations is appropriate and proportionate, because these provisions deal with details of a subsidiary and technical matter and, accordingly, it is anticipated that these details will need to be updated again in By enabling the technical implementation of this policy to be set out in secondary legislation, future governments will be better able to make any future necessary updates in a timely manner.
New subsection (5ZA) provides the power for the Secretary of State to make such
New subsection (5ZB) sets out the provisions that the regulations may include when setting out the new valuation calculation. Paragraphs (a) to (g) detail the different components of calculations for the different types of land that comprise other land under the LDA, ensuring that the Secretary of State has the necessary powers to stipulate a comprehensive valuation calculation in secondary legislation.
New subsection (5ZC) sets out which internal drainage boards (IDBs) the Secretary of State can decide to apply the regulations Linked to this, new subsection (5ZD) enables the regulations to allow for an IDB to elect that the regulations apply to them, and for the regulations to specify a procedure for that election. These provisions mean that, where an issue associated with the existing valuation calculation only affects certain IDBs in England, the Secretary of State may provide an alternative calculation that other IDBs may elect to make use of, if they so choose.This is currently necessary because certain data referred to within existing subsection (5) is either missing or incomplete in some areas. However, the provisions also reflect the fact that, in future, the calculation may need to be updated for all IDBs (were an issue within the calculation to affect all IDBs). New subsection (5ZC) therefore enables a calculation stipulated in secondary legislation to be applied to all English IDBs in such cases.

Subsection (5ZE)(b) enables the Secretary of State to make changes, as a consequence of these new provisions being added to the LDA. This includes amending, repealing or revoking provisions in the LDA (pursuant to new subsection (5ZF)).
New subsection (5ZG) places a duty on the Secretary of State to consult such persons (if any) as are considered appropriate, taking into account the extent to which the regulations are likely to affect the valuation of other land.

Section 95: Valuation of other land in drainage district: Wales

Section 95 of the Environment (Wales) Act 2016 conferred powers on Welsh Ministers to make regulations which establish a valuation calculation for other land in respect of internal drainage districts in Wales. These powers are similar to those conferred on the Secretary of State in England under section 94 above.
Section 95 makes minor amendments to section 83 of that Act, with one key substantive amendment set out below.
Subsection (2)(b)(iii) inserts new subsection (5D) into section 37 of the Land Drainage Act 1991, which places a new duty on Welsh Ministers to consult such persons (if any) as are considered appropriate, taking into account the extent to which the regulations are likely to affect the valuation of other land. The existing subsection (5D) is renumbered as new subsection (5E).

Section 96 Valuation of agricultural land in drainage district: England and Wales

Section 96 inserts new section 41A into the Land Drainage Act 1991 (“the LDA”), which enables the appropriate national authorities (the Secretary of State in respect of internal drainage districts in England, and Welsh Ministers in respect of internal drainage districts in Wales) to make regulations that establish the valuation calculation for the value of chargeable property (agricultural land and buildings) in an internal drainage district.

New section 41A Alternative method of calculating annual value of agricultural land and buildings

Subsection (1) provides the power for the appropriate national authorities to make such
Subsections (3) and (4) set out the provisions the regulations may include when setting out the new valuation These provisions detail the different components of the calculation to assess the value of “chargeable property” under the LDA. This ensures that the appropriate national authority has the necessary powers to stipulate a comprehensive valuation calculation in secondary legislation in respect of the territories of England and Wales.
Subsections (7) and (8) set out which internal drainage boards (IDBs) the appropriate national authority can decide to apply the regulations to. Linked to this, subsection (9) enables the regulations to allow for an IDB to elect that the regulations apply to them, and for the regulations to specify a procedure for that election. These provisions mean that, where an issue associated with the existing valuation calculation only affects certain IDBs, the appropriate national authority may provide an alternative calculation which other IDBs may elect to make use of, if they so choose. However, the provisions also reflect the fact that, in the future, the calculation may need to be updated for all IDBs (were an issue within the calculation to affect all IDBs). Subsections (7) and (8) therefore enable the appropriate national authority to stipulate in secondary legislation that a calculation can be applied to all IDBs in such cases.
Subsection (10)(b) enables the appropriate national authority to make changes, as a consequence of these new provisions being added to the LDA. This includes amending, repealing or revoking provisions in the LDA (pursuant to subsection (11)).
Subsection (12) places a duty on the appropriate national authority to consult such persons (if any) as are considered appropriate, taking into account the extent to which the regulations are likely to affect the valuation of any chargeable properties.

Section 97: Disclosure of Revenue and Customs information

Section 97 inserts new sections 37A to 37C into the Land Drainage Act 1991 (“the LDA”).

New section 37A Disclosure of Revenue and Customs information

New section 37A deals with the disclosure of revenue and customs
Subsection (1) provides a power to the Valuation Office Agency (VOA) to disclose Revenue and Customs information to certain “qualifying persons” for a “qualifying purpose”. Internal drainage boards (IDBs) will require certain data to enable them to discharge their statutory duties and complete the valuation calculations referred to above. The data it is envisaged qualifying persons will need is the council tax valuation list and the non-domestic rating list, both of which are compiled and maintained by the VOA and are not otherwise publicly
Subsection (3) lists the qualifying persons. These are the bodies that will need access to the certain VOA data as they are involved in completing the valuation calculations for other land or chargeable property referred to above. The list includes IDBs, the Environment Agency and the Natural Resources Body for Wales. Paragraph (h) enables the appropriate national authority, via regulations, to name any other person as a qualifying person.
Subsection (4) lists the qualifying purposes: mainly to carry out any functions under Chapter 1 or 2 of the LDA, or section 75 of the Local Government Finance Act 1988. This definition captures the key purpose of the statutory gateway, being that qualifying persons are able to carry out the valuations calculations referred to above.
Subsection (5) stipulates that regulations, under subsection (3)(h), can only be made with the consent of the Commissioners for Her Majesty’s Revenue and Customs.

New section 37B Restrictions on onward disclosure of Revenue and Customs information

New section 37B deals with the restrictions on the onward disclosure of Revenue and Customs
Subsection (1) sets out when the onward disclosure of information may be permitted. This will enable one qualifying person to share the data with another qualifying person (such as those under new section 37A(3)(d) and (e)) for a qualifying purpose, to enable one person to complete the valuation calculation on behalf of another.
Subsection (2) requires, in certain circumstances, the consent of the Commissioners for Her

Majesty’s Revenue and Customs before the onward disclosure of information is allowed.

Subsection (4) makes it an offence to disclose Revenue and Customs information relating to a person whose identity is specified in the disclosure or can be deduced from it; subsection (5) provides a defence, in certain circumstances, if a person is charged; and subsection (6) sets out the criminal sanctions if such a person is found guilty.

New section 37C Further provisions about disclosure under section 37A or 37B

New section 37C includes provisions stipulating how the disclosure of information permissible under new sections 37A and 37B relate to certain existing legislation. In particular, subsections(4) and (5) confirm that certain information disclosed under new sections 37A and 37B is exempt from disclosure under the Freedom of Information Act 2000.

Share this article

Important Notice- See the Disclaimer Below Brexit Legal, McMahon Legal and Paul McMahon have no liability arising from reliance on anything contained in this article nor on this website

Contact McMahon Legal