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C H A P T E R 9

PlanningIntroduction9.1. Section 24 of the Water Act (see Appendix 9.1) obliges R W A s toprepare a long-term plan based on an estimate of the fu ture demand forwater over a period of 20 years, and to revise that plan at least once everyseven years. It also obliges them to prepare from time to time, or asMinisters direct, one or more programmes of a general nature for thedischarge of their functions over a period of not more than seven years. Inpreparing these plans they must consult the local authorities in their areaand must have regard to structure plans (for counties) and local plans (forother authori t ies) prepared un der the Town and C ou ntry Planning Act 1971.

9.2. A t present DoE requires each RW A t o make a formal submissionsetting out its planned capital programme over the next five years. Thesubmission to DoE also sets the RWA's performance aims (see paragraph9.3 below). The formal submission is supported by an annual plan whichusual ly includes information on the RWA's general policy objectives andlevel of charges together with a description of its method of determininginvestment priorities. These are all approved by the members of the RW Afollowing consultations with Government, local authorities and otherinterests such as the CBI, the NFU and recreation, fishery and co nservationgroups. The formal submission includes estimates of the effect of variousacross the board reductions or increases in planned capital expenditurespecified by DoE. The RWA's submissions become an inpu t to the PublicExpendi tu re Survey before forming the basis of the capital allocation givento each RW A for the next financial year. The form al submission and annua lplan are both pu bl ished.9.3. Performance aims are financial targets for operating costs based onforward projections by each RW A of its performance for each service. Theyare intended to keep dow n increases in charges throu gh impro ving operatingcost efficiency, and are arrived at after discussions between th e Governmentand the R W A . The a ims are set in terms of total operating costs for eachservice, since it was accepted that the u se of u nit costs wo uld be unsatisfac-tory in a capital-inten sive indu stry. The perform ance aims su bm ission m adeto DoE each year is accompanied by a paper on levels of service. Perform-

ance aims were first agreed, albeit implic itly, for 1982-83.9.4. A s explained in paragraph 8.11, capital allocations are ceilings set byDoE for investment. Some Government guidance is given for medium-terminvestment in the form of commitments to a given proportion of plannedexpendi ture over the next two financial years bu t these do not have the firmstatus of capital allocations.9.5. In this chapter w e look at the most recent formal submissions andannual plans of AW A and N W W A in turn before briefly discussing strategic

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planning for sewerage and other research. T he determinat ion of inves tmentpriorities is described in Chapter 12 and charging m at ters are dealt with inChap te r 13.A W A Annual Plan 19819.6. A W A h a s told u s that i t has recent ly made changes in its p lann ingprocedures. T h e annual p lan will henceforth be produced in Septembereach year, instead of March, a l though a formal submiss ion would s t i l l bemade to DoE in the spring. The new procedure is designed to strengthen thel ink between cap ital and reven u e p lanning . AW A to ld u s tha t the pro-cedures were compat ib le "with the Gov ernment 's wish tha t ann u al p lansshou ld develop in to ful l corporate plans. As the 1982 A nnu al Plan was notavailable at the t i m e of wri t ing, w e consider below the 1981 A nn u a l P lan ,together with the 1982 Plan ning Subm iss ion , m ade to DoE in the spring.

9.7. In its 1981 Plan, A W A 's s tated objective is, given cu r ren t econom icci rcumstances , to m ainta in cu r ren t s tandards for a growing popu la tion . T oth i s end A W A believes that o perating and capi ta l ex pen di tu re shou ld not bereduced.9.8. On i ts performance a im, A W A said tha t it expects sewerage operat-ing costs to r ise by an average of 2-8 per cent per a n n u m o v er four years to10 m il l ion in 1983-84 at 1979-80 prices . A bou t 80 p e r cent of this increaseis needed to meet growing demand and the extra operating costs arising fromthe new sewers and p u m ping s tat ions needed to rel ieve f looding in variousparts of the region. Un it costs per head of eq u iva len t po pu lation increasedby an average of around 8 per cent per a n n u m in real term s from 1977-78 to1981-82. These increases were m ainly caused by increased su rveying ofsewers and direct bi l l ing. It is intended that unit costs should remain steadyfrom 1981-82 to 1983-84 at 1-66 per head of equivalent populat ion in1979-80 prices . T he equ ivalen t pop u lat ion is expected to r ise abou t 1 percent per annum over th i s per iod , the same rate as in previou s years. For

water services as a w hole, m anpo w er has been redu ced by about 7 per centbetween 1974 and 1980 compared w i th an increase in popula t ion of abou t 5per cent. Some fu tu re factors , including charging by meter , will tend toincrease m anp ow er levels w hi le others , such as increased au tom at ion ortelemetry, should increase productivity.9.9. Capital expenditure on sewerage is expected to total around 140mil l ion over five years but to fall from 31-3 mil l ion in 1981-82 to 23-5mil l ion in 1985-86 (all figures at 1980 su rvey prices). This is m ainly because

of less first-t ime sewerage in urban and rural areas, new town expendituregoing down from 8 mil l ion to 4-5 m il l ion. AW A state th at a 10 per centincrease in the total capi tal programme would enable it to accelerate theremoval of publ ic nuisances , caused mainly by flooding from foul andsurface water sewers. A 10 per cent cut would delay 31 higher priori typrojects, inclu ding some sewerage schemes.9.10. Sewerage capital schemes are required primari ly because off looding, poor structural condit ion and first- t ime sewerage. To alleviateflooding in kno w n trou ble spots, 34 m illion w as allocated over five years,

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around 24 per cent of the sewerage capital program m e. It is AWA's in ten-tion that the proportion of premises affected by foul water flooding(currently 0-01 per cent) shou ld not increase over the next three years.9 .11 . In some cases f looding problems are caused by structural decay inold sewers and pumping stat ions, for the removal or rep lacement of whichA W A has allocated another 32 m ill ion over five years. In A W A ' s view thisis insufficient to prevent an increase in the rate of sewer collapses and burstson pumping mains .9 .12 . Al though new housing starts fell nationally by 17 per cent in1979-80 and had been forecast to fall by nearly 23 per cent in 1980-81, laterestimates were less pessimistic. A W A thinks that housing starts (andindust r ial activity) are likely to be suffering less in its region tha n in the rest

of the country . The 1-722 mill ion sewer connections as at March 1980represented a 2 per cent increase on the previous year. However, newconnections for 1980-81 were expected to fall to 36,000 compared with37,000 in the previous year. The five year capital programme includes 20million for section 16 first-time sewerage schem es.AW A Planning Submission 19829.13. The 1982 Planning Submission does not contain much addit ionalinformation on sewerage. On its performance aim, AWA says that odourcontrol in sewerage is one area where increased expenditure is needed toraise stand ards from an u nacceptable level. Ope rating costs fo r sewerage areforecast to increase (at 1979-80 prices) from 9-7 million in 1981-82 to10-0 m ill ion in 1982-83 and 10-2 m illion in 1983-84.

9.14. Average annual capital expenditure on sewerage over five years isgiven as 32 mill ion at November 1980 prices, around 35-5 per cent of totalcapital exp end iture, com pared with 36-0 per cent in the 1981 A n n u a l Plan.N W W A formal submission and Report on Planning 1982

9.15. NWWA pub l i shed its annual Repor t on Planning in March 1982,accompanied by its formal submission to DoE. The documents emphasisethe poor p hysical con dition and low capacity of a large part of the region'ssewerage system.9.16. The performance aim for all water services in 1982-83 is 107million (at 1979-80 prices), a 1-5 per cent increase in real terms on thepreviou s year. The comparable f igu re for sewerage is 16-4 mil l ion , up 9 percent on the previous year . Manpower accounts for around 39 per cent of

total operating costs. The Authority 's manpower review will be imple-mented from 1982-83, involving organisational re-structuring andimplementat ion of WIPPS. On other operating costs, fu r ther at tempts willbe made to reduce spending on electricity, transport and plant, in accord-ance w ith proposals form u lated jointly by N W W A and consultants to DoE.Against these economies, NWWA says there are a number of areas ofu navoidab le or essential grow th, notably sewer m aintenance.9.17. At the Government's suggestion, in 1983-84 a 2 per cent realreduction on the 1982-83 performance aim for all water services is plann ed.

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However, it is intended that the performance aim for sewerage shouldremain constant in order to prevent the u necono m ically early replacementof assets and deterioration in service to the customer which, NWWAbelieves, would follow a reduction in spending on sewer maintenance.9.18. Unit costs for sewerage are projected to rise to 1-76 per head ofequivalent population in 1982-83 (at 1979-80 prices), around 7 per centmore in real terms th an in the previou s year, before falling to 1 -7 2 (at sameprices) in 1984-85. The equ ivalent popu lation is expected to rise at a rate ofabout 1 per cent per annum over the next two years, as the result of arecovery in indu strial activity.9.19. The proportion of sewerage operating costs incurred under section15 arrangements is expected to be around 83 per cent fo r 1982-83 and forthe next two years. The formal submission to DoE contains the followingstatement, in relation to the emergency response to reports of sewerageproblems:

As the A u thority's agent district cou ncils have a w ide range of functionsnot directly related to sewerage they are in a position to employ con-siderable flexibility in the u se of their m anpo w er resources within theircompact geographical areas. Although no quantitative information isavailable on response capabilities experience indicates that districtcou ncils emergency response to sewerage problems is satisfactory.NW W A has, how ever, told u s that the flexibility described relies to a signifi-cant extent on the operation by D Cs of the highways agency, th e fu tu re ofwhich is, it says, in do u bt in pa rts of the region.

9.20. NWWA wishes to increase capital expenditure on sewerage to46-9 million in 1984-85 from 35-7 million in 1981-82 and almost todouble the 1981-82 figure in 1986-87 (all figures at 1980-81 prices). A 10per cent cut in NWWA's capital programme would result in a constantexpendi ture some 8 million below current levels and 22 million belowthat planned for 1985-86.

9.21. A lthoug h the dilapidated condition of its sewers is NW W A's m ajorconcern, it has allocated 9 per cent of its sewerage capital programme toprovide for new developments in 1982-83, rising to 12 per cent by 1984-85.Strategic plans9.22. Our consultants, Coopers & Lybrand (CL) recognised the majorproblems inheri ted by AWA and NWWA in terms of poor sewer recordsand were concerned at the lack of strategic planning for sewerage withinthe Authorities and by their agents. By strategic planning we mean, in thiscontext, the preparation of a plan for the longer term development ofsewerage systems u sing either a catchment or local authority area approach ,incorporating detailed information relating for example to flooding orpublic health risks. The Authorities have told us that some seweragesystems, particularly in AWA, are so small that there is no need for astrategic plan. CL acknowledged that some of the projects reviewed by itwere free standing and related to very localised problems. But others had

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more far reaching consequences and a strategic plan could have improvedthe long run quality of service in so far as current projects could be madeconsistent with longer term needs. W ith a nu m ber of exceptions CL couldnot relate these projects to a strategic plan. NWWA has told u s that it hashowever made a start in th is area by selecting six river catchments for whichit is developing investment strategies for improving r iver water quanti ty .These strategies concentrate on the improvement of effluent from sewagetreatm ent works but also cover sewerage. Both A u thorities are aware of theneed for m ore strategic plan nin g and are im prov ing their data bases throu ghsewer su rveys, bu t b oth also expressed concern at the lack of pow er availableto them to requ ire agents to prepare or contribute to strategic plans.Other research

9.23. Section 24(10) requires each RWA to make arrangements for thecarrying ou t of research an d related activities in respect of m atters affectingits functions.9.24. In respect of miscellaneous research for sewerage, NWWA has co-operated with the Hydraulic Research Station in developing a model for theanalysis and design of storm water systems, including th e determination ofoptimal sewer sizes. Another technique has been developed to forecastdemand in relation to fou l sewage, although this is of more assistance in

planning sewage treatm ent plants th an in determ ining sewer sizes, since dryweather sewage flows account on average for less than 2 per cent of thecapacity of N W W A ' s com bined sewers.Issues andconclusions9.25. W e note that both A u thorities devote considerable attention to theirdu ty to produce annual plans and to make annual planning submissions toDoE. The results seem to us to be good. The plans il lustrate clearly thedifferent conditions in each region in relation to sewerage. For N W W A theproblem is that of maintaining and renewing a dilapidated network; whilefor AWA the question is how to meet r ising demand without increasingexpendi ture , and how to tackle flooding in low-lying areas:

9.26. From the planning process the Authori t ies hav e derived a clear ideaof the problems they face in relation to sewerage, and of the ways in whichthese problems can best be tackled within th e limited resources available.Given the circumstances of each Au thori ty , the allocation of resources the yplan for sewerage, in respect both of revenue and of capital account , appearsto be appropriate.9.27. W e would, however, like to see both Authorities devote more atten-tion to strategic planning for sewerage and we recommend accordingly. Wenote, however, that some sewerage systems are small, and for these strategicp lanning would often be inappropriate. However, where there are largersystems, and where these are associated with important river systems,strategic planning could be a useful aid in obtaining maximum value fromthe capital investment programme. W e note, however, that the Authori t ieshave indicated that they lack the power to require their agents to prepare or

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contribute to strategic plans for sewerage. This relates, of course, to thegeneral issue of the effectiveness of section 15 ar rangements , which w ediscuss in Chap te r 14.9.28. W e no te w i th app rova l NWWA's well directed research, m ent ion edin paragraph 9.24.

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