Press Release - Environment Agency: Efficiency in water
resource management
17 June 2005
Sir John Bourn, head of the National Audit Office, reported
today that while the Environment Agency provides well-managed and
professional water resource management services there is scope to
improve efficiency and realise net savings of some £450,000 a year
on its activities in England, with a further potential saving of
between £1 million to £2 million as a result of internal cost
reallocation.
The Agency currently spends around £114 million a year in
England and Wales to ensure that sufficient water is available to
meet the needs of people and the environment. To do this it
collects and monitors data from a network of 14,300 sites across
England and regulates the use of water through a system of water
abstraction licences, enforcing licence conditions where necessary.
The cost of the Agency's activities is met by charges to two-thirds
of the 47,600 licence holders.
The identified gains fall within four main areas.
Of the 14,300 monitoring sites the Agency operates in England a
number are used for both water resource management and flood
defence functions. The cost of these joint sites is not allocated
appropriately between the two functions, and in most regions water
resource management effectively subsidises flood defence. The NAO
estimates that water abstraction licence holders are paying between
£650,000 and £1.7 million a year in excess charges because of this.
Better cost allocation would allow licence fees to be reduced by
this amount – although the flood defence function would still need
to be funded.
The Agency needs to examine more critically the growth and
expansion of its network of monitoring sites. Over the last three
years 1,500 new sites have been added in England, a growth of 12
per cent in the network, but no one group within the Agency is
responsible for control of the network as a whole. This situation
increases the risk that there are an excess number of sites.
Clearer responsibility for planning the network could allow a
reduction in the number of sites; the NAO found that up to a 5 per
cent reduction, if realistic, would result in additional annual
savings of up to £261,000 to water resources and £174,000 to other
functions in the Agency.
The Agency relies on its Operations Delivery Workforce to
maintain many of its sites. While Workforce staff are paid the same
rate regardless of region, the internal charging rate used varies
from region to region – from a low of £13 an hour in the North East
to a high of £27 an hour in the Thames Region. If all regions
consistently applied the lower internal charging rate, costs
totalling £330,000 a year to Agency’s water abstraction function
could be transferred elsewhere in the Agency.
The Agency also needs to prioritise visits to water monitoring
sites more consistently. Some 150,000 visits are made each year to
sites, an average of 13 visits per site. But visits are not
prioritised consistently according to risk, importance of the site,
or the Agency's own good practice. The Agency is not able to
provide data about the cost of these visits but the NAO
conservatively estimates that £190,000 in annual savings could be
achieved.
The Agency also needs to assess the potential for savings
through the use of new technology. The Agency has introduced
continuous electronic data recording at about 35 per cent of its
sites where it felt the technology would be cost-effective. There
is limited information on the costs of this technology or possible
alternatives and on the scope for wider use of technology. The
Agency recently established a Technology Evaluation Group to
consider these issues.
Sir John Bourn said:
"It may not always seem like it but some parts of
England are extremely dry, with less water available per person
than in places like Spain and Portugal. With daily demand of
32 billion litres a day the Environment Agency has a
challenging role managing limited resources efficiently. It has
done this task well but there is scope for the Agency to make
further efficiency gains without adversely affecting the service it
provides."
Notes for Editors
- The Environment Agency is responsible for water resource
management in Wales as well as England. As it reports to the
National Assembly for Wales on its work in Wales, this NAO report
only looks at the Agency's activities in England.
- The Gershon review of public sector efficiency set a target for
the Environment Agency to achieve efficiency gains of £73 million
by 2007-08, out of a total estimated annual spend of £850
million.
- Press notices and reports are available from the date of
publication on the NAO website at www.nao.org.uk. Hard copies can
be obtained from The Stationery Office on 0845 702 3474.
- The Comptroller and Auditor General, Sir John Bourn, is the
head of the National Audit Office which employs some 800 staff. He
and the NAO are totally independent of Government. He certifies the
accounts of all Government departments and a wide range of other
public sector bodies; and he has statutory authority to report to
Parliament on the economy, efficiency and effectiveness with which
departments and other bodies have used their resources.
Press Notice 41/05
All enquiries to Bill Schaper, NAO Press Office: Tel: 020 7798
7335
Mobile: 07795 120838